Right now they might be able to buy 90% of the coins that are still accessible (private keys not lost). Well, maybe not 90%, but 75% or so. But then, at some point, the price will most likely skyrocket. What happens then will be interesting, Bitcoin could either become really expensive or worthless because such a big amount is being held by a single entity!
The OP is saying that they would dump all those coins, destroying the price. And yes, they could easily destroy the price if they had that many coins. But they couldn't get them, and they wouldn't dump them if they did.
It doesn't matter if it's the government, or the banks, or both of them working together, because Bitcoin reduces the power of both and gives more of that power back to us.
if they want to have possession of 99.98% of bitcoins they could.
They could not. Even if they did, they could not dump it down to $1, and they wouldn't even want to.
#1, Satoshi still has over 5% of all bitcoins, so the government cannot get more than 95% even if they got everybody else's coins.
#2, there are true believers who got in early and will never sell for any price, like the guy in The Rise and Rise of Bitcoin. They are waiting for Bitcoin to take over the world, and then they will spend some on real goods and services. But they will never sell for fiat, because that goes against everything they believe. So that's another 5%, or 10%, or even more, that the government can never buy on exchanges.
#3, there are people who paid $1000 per
BTC, and they're not selling right now for $230. They're waiting for it to go back up, so they don't lose their life savings. They will not sell to the government for $1, because they would rather keep their 20
BTC instead of selling it for $20.
#4, if the price gets any lower than it is right now, there are a lot of people who will start taking out second mortgages to buy more
BTC. The government can't buy it all if other people are still buying. So if the government did start dumping and destroying the price, people would start buying cheap and holding. They wouldn't buy for $199 and then sell it back to the government for less. So it would create more hoarders, and the government would have an even smaller percentage of total bitcoins available to buy.
#5, the Winklevoss Twins could end up with over $1,000,000,000 worth of bitcoins, depending on the price. That's a billion dollars. But they also have millions of dollars in fiat. So, if their investment started going down the drain, the price dropped, miners stopped mining because it stopped being profitable, then the Winklevosses would spend a few million dollars to set up their own mining farms, keep the difficulty high, and protect Bitcoin. You don't think they'd spend a million to protect a billion?
See, government officials aren't the only ones with money and power (in some countries). That's the entire point of decentralization, and that's the reason why private money and individual freedoms are hated by totalitarians such as communists and socialists. Money is power, so having our own money gives us power we can use to protect ourselves from governments and banks and Hitlers. People who want to take all the money away from private citizens really just want to give all the power to a few people in the government.
So they call rich people evil, because rich people limit the power of government. They say it's unjust for a few hundred families to control a majority of the wealth, but they don't mention what happens when just 1 family controls all the wealth, like in North Korea. I'll tell you what happens when you get rid of all the rich people - the government is free to murder and rape everyone, and people sacrifice their lives trying to escape and go somewhere that still has rich people.
Because it's not really about rich people, it's about personal freedom. There can be no freedom without property rights, and that means a free system doesn't allow the government to take your money against your will, no matter if the excuse is for healthcare or saving the whales or just because you're evil for having money. And if they can take away all the money from a rich person, then they will have no problem taking everything from you too.
Notice that whenever someone is accused of being greedy, it's followed by a demand to take all of that person's money. "You're greedy, I want your money so give it to me." And it's not the government saying it, because there is no such person as "the government". It's just a guy who has acquired the power to take people's money by force and spend it on whatever he wants. Government leeches need us to produce the wealth so that they can take it, so they don't want to destroy Bitcoin. They just want to control it.
And since "the government" is just some guys who want power, they like to make friends with rich non-government guys who have lots of power (assuming they don't get rid of all the rich guys). So if the government bought up 75% of all bitcoins, they would be working with the Winklevoss twins the whole time, or big banks, and probably set up a Federal Bitcoin Bank through which they would lend Bitcoin through an off-blockchain system that would allow them to use fractional reserve banking. That way they could own 10 million
BTC and lend 100 million
BTC, effectively printing as much money as they want.
That's one reason why you shouldn't keep your bitcoin in exchanges. Be your own bank, or you are forced to trust the government and the fiat banks.
This. Also lets not forget all the lost Bitcoins and the ones which have ended to a landfill in someone old computers wallet.
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How do these things keep happening...
And yes, it is okay.
