Bitcoin Forum

All it takes is a couple of countries to realize this for bitcoin to really take off.  Yeah it might be hard to tax now, but you'll eventually get some of it taxed and there will be a trickle down effect on the economy.

You mean a trickle down effect for Government employees.

Oh no the 'trickle down' economists have arrived.

that or they could end up losing a lot of money. it's high risk and high reward.. you forgot to mention the other side of the coin.

Denmark seems to have embraced it!

i was actually thinking of a day that a ruined country like idk syria makes bitcoin their official currency. that would get things crazy :)

the only prob is that everyone will need a pc for that .. maybe some other way... ???

That's why is makes sense for a resource-rich country like UAE or Qatar to do this, because they will always be wealthy from oil no matter what happens to bitcoin. Or a country which is already in dire fiscal straits, like Greece, which really has nothing to lose.

He has a point though first country to use will have its citizens stock up on bitcoin.

Take this case.
Rich country A buys $2 Billion in Bitcoin (Or how every much).  Gives $1 Billion to poor small country B.
Country B announces that Bitcoin is it's official currency.
This $1 Billion is now 10 to $100 Billion because of the news.

Rich County A who kept the $1 Billion in bitcoin just did some legal insider trading and made a ton of money.

Then poor country B is bankrupt because they won't be able to afford to pay for their obligations that will have skyrocketed in real terms compared to the country's GDP and therefore tax revenue.

What obligations?  They just got $100 billion.

u mean Germany ?  ::)

Makes you wonder when the first serious bitcoin bank will start publishing notes? Before you jump all over me, thats not as crazy as it sounds, a bitcoin equivalent of the gold standard,
and bearer notes like UK pound note,still has the words 'I promise to pay the bearer...' So could work in practice.

That would solve one of the main achillees heals of BTC, the need for elecronic transfer. Of course common currency without fiscal/monetary union = disaster aka EU.

Yes, that's how small poor country could do it.  The government would exchange the paper bill for a bitcoin amount.  That would stop out of control inflation.

Of course that would mean the 'poor country' would need to have some foreign exchange with which to buy BTC to issue on notes. This is very similar to Greece, showing the difficulties when you run out of that buying power.

Also worth noting that money supply is only one of the contributers to inflation, so switching to BTC only helps, does not 'cure' runaway inflation.

This can all be figured out, but the country can back it's paper money with bitcoin.  One would bring the paper money up to a government office with key and the government would then transfer a bitcoin amount to the address.  As for what the country will buy with.  They will have the initial $100 billion they bought worth of bitcoins.  Back the money with that 100 billion.  They can't print more money unless they buy more bitcoins first.

I don't like the trickle down effect; it's too nice sounding.  We should use a more accurate name; let's call it, scraps from the table effect.

Imagine what US government can do with crypto. No one ever said crypto cannot be co opted one way or another.

As many wannabe-revolutionaries say, 'there is no absolute'. Same applies to so-called silver bullet against central bank that is crypto.


In the end, political and personal power rules in conjunction with influence and financial backing. You need three things to become a king of sorts: Power of influence so that one may persuade, lead, and take charge of another with strength of personal character; Power of material wealth and finance so that the potential king has something solid to offer to those who are under his protection; and ultimately, the power of VIOLENCE, and the will to exert such vicious force that overshadows all others with absolute strength.

Crypto is but an attempted jab at one corner of that triad: Finance. It cannot stand alone for long without being co-opted by others who have control of all three, at least relative to crypto in general.


If bitcoin and crypto is to survive, constantly chanting naive and frankly pathetic anti-government (especially anti-US government, which is amusing since it was the chinese government who delivered the first ridiculous and heavy handed strike against crypto, but everything is supposedly America's fault) rhetoric is counter productive.

Should you trade your not-so-solid and naive 'revolutionary ideals' for greater crypto stability and eventual co-opting by the government? Or will you internet commandos get off your asses and try to achieve parity with US government and other national establishments in terms of influence, wealth, and military power?

Do you get the picture now? This will make certain countries who are already invested into crypto rich in the future. America is definitely there on the front line with this.

A country's official currency is the unit of measure for its obligations (government debt, salaries and pensions, etc. etc.). If the value of these obligations increases 100fold relative to its revenue, the country is bankrupt. If you are country B (or country A for that matter) is keep the BTC as reserves (or assets in a sovereign wealth fund), but NOT, UNDER ANY CIRCUMSTANCES, surrender monetary sovereignty and peg your obligations in a deflationary currency.

Countries are not in the habit of engaging in foreign currency speculation.
Especially because it doesn't involve any wealth creation, only shuffling between those who bet poorly and those who bet well.


"Trickle down economics" aka "Voodoo Economics" were both terms invented and used by the Bush senior smear campaign when he ran against Reagan.

Well this isn't speculation.  If a small country made bitcoin it's official currency and backed some paper made bills with it, the price of bitcoins would skyrocket.  The 10 billion Market Cap of bitcoin might go up to a trillion on that news.
This could be enough of an incentive for a country (Or a group of rich people) to do this.

As for the poor countries obligations, if they can't pay people, they can't pay people.  What good is printing more useless money anyway.

The "good" is that it allows them to confiscate funds from the populace via inflation (which is really really bad; but they keep on doing it)

You really need to understand the difference between assets and liabilities. A country's official currency is the unit of its liabilities. No country would ever want a hard deflationary asset as the unit of its liabilities. Ever heard of currency wars? The aim on these is to have the cheapest currency, not the most expensive.

Works the same (or similar) way for companies.
Let's say you are a company that makes software. You hire someone to develop a new app. If you agreed to pay them in bitcoins when the price was $10 and you have them a salary of 5000BTC, thinking that you would have $200k in revenue, and by the time you had to pay them BTC went to $1000, your company is bankrupt despite making your sales target.

Yes, but then no one will keep their money in that currency anyway.  People in these poor countries will keep their money in usd, euros or whatever.
By being the 1st country to do this, there's a good chance the bitcoin price will keep going up and they can even pay their workers less money as time goes on.
If they pay their government workers in their own currency, they have to keep giving them raises to keep up with inflation.

Yes, they won't control the money supply, but what's the use of printing money that no-one uses.  Their economy would be better off and if all major transactions were done in bitcoin, less fraud, faster transactions...  I'm not saying every small country will want to do this.  It only takes 1.  Or it could be a city that has it's own currency.

Well until 1/2 the world money supply is in bitcoins, it would be the number of btc compared to X amount of dollars or something.  There's a company in poland paying their employees in bitcoins if they want. I'm sure it's done in a similar manner.

Agreed, you'd be paying them presumably at the market rate, convertible afterwards if the employee decided, passing the risk onto them for choosing the Bitcoin salary option. Besides, at this point where adoption was becoming more normal I think it's safe to say the price would not be moving from $10 to $1000 over any short period of time...

What do u mean in a similar manner? I'm sure the pay is not agreed at a fixed amount of BTC, but at a fixed amount of fiat. Otherwise my previous example stands. Employees that signed up a year ago would be too expensive now. Company would be bankrupt. Please provide evidence to the contrary.

A Android phone is enough. Most of people can buy a cheap Android phone

Really dan123 do you think country that accept bitcoins will be richest soon? In my opinion it would be in the dreams only after all it is a digital currency that is facing tough times from world powers. And how come you think so in the light of fact that it is one of the most volatile currency these days

Not the richest in the world, but they would gain a good amount of money from it.  You can trade based on current USD value.

How much do you think btc would go up if a small country announced it would use it as currency and back their dollars by it?  Would it hit $1 trillion market cap then?  Maybe?  Also at 1 Trillion market cap, it wouldn't be as volatile.  What if the leader of that country also invested 1 Million or more in bitcoins?  There are many selfish reasons why this could happen?  News like this would make the currency skyrocket.  What if a country announced it and then a month later said they're not going to do it.

Now what if they used litecoins or another?  Would that currency then overtake bitcoin?