Will Bitcoin hasten the collapse of the US dollar?

[Brutus I]

Gimpy I agree with you in principle but keep in mind that right now bitcoin is still a drop in the bucket that doesn't present any real threat to the current order. If that changes then it will be attacked. Most seem to be focused on network resiliency. But I don't see that as the attack point. What do you think would happen to the value of BTC if MtGox were to be shut down? And then go after every company within the system that accepts bitcoin? It's value would plummet. I don't see it being eliminated as a black market currency but gov could certainly go a long way toward driving it's use out of the on record business environment and into the black market. I won't make predictions as to how that would play out but I can tell you it wouldn't be as straight forward as the scenario in the OP.

[StephenJH]

bitcoin is still a drop in the bucket that doesn't present any real threat to the current order.

-brutus

I'm not so sure..., The people could adopt it en masse and how is that not a threat? Just because there is a certain low total number of bitcoins to be 'minted' does not mean the economy of the world is not divisible by that number. Each bitcoin would just be worth a helluva lot and people would be buying houses and cars with fractional amounts of btc.

[john_acton]

I do not believe the US dollar will collapse any time soon.

[Mike Christ]

I do not believe the US dollar will collapse any time soon.

But then you gotta explain how you've come to this conclusion

[Brutus I]

bitcoin is still a drop in the bucket that doesn't present any real threat to the current order.

-brutus

I'm not so sure..., The people could adopt it en masse and how is that not a threat? Just because there is a certain low total number of bitcoins to be 'minted' does not mean the economy of the world is not divisible by that number. Each bitcoin would just be worth a helluva lot and people would be buying houses and cars with fractional amounts of btc.

What could be in the future and what is at the present time are not one and the same.

[john_acton]

I do not believe the US dollar will collapse any time soon.

But then you gotta explain how you've come to this conclusion

The global economy would collapse along with the US dollar. China needs US consumers to buy what they are producing. China will keep on buying US treasury bills to make sure that the US can keep borrowing for the foreseeable future and make sure that China keeps growing.

[GimpyPrime]

Gimpy I agree with you in principle but keep in mind that right now bitcoin is still a drop in the bucket that doesn't present any real threat to the current order. If that changes then it will be attacked. Most seem to be focused on network resiliency. But I don't see that as the attack point. What do you think would happen to the value of BTC if MtGox were to be shut down? And then go after every company within the system that accepts bitcoin? It's value would plummet. I don't see it being eliminated as a black market currency but gov could certainly go a long way toward driving it's use out of the on record business environment and into the black market. I won't make predictions as to how that would play out but I can tell you it wouldn't be as straight forward as the scenario in the OP.

Of course there is alot of wishful thinking in the OP, as I said this is hypothetical only.


Here is something to consider though. The majority of Bitcoin transactions are currently to exchange illegal goods/services, most of which are totally untraceable because the websites are only available through the TOR network. A significant number of Bitcoin purchases are done through cash in person, and is actually still a very strong network.

The services which you are concerned the government may attack could only scratch the surface and likely remove the only investors who aren't participating in organized crime(Minus Counterfitting of course, lol). Drug dealers continue business as usual, but now you can't buy DVDs online with Bitcoins. I hope that isn't what qualifies as a win for the US government.

Everytime the government tries to suppress freedom it backfires. Decentralized websites already exist and perhaps that will be the future. They remain forever out of reach from authorities.

The final play the government could make would be shutting down the internet. How likely is that to happen?

[No 1]

the dollar is fucking dead.

[Brutus I]

Gimpy I agree with you in principle but keep in mind that right now bitcoin is still a drop in the bucket that doesn't present any real threat to the current order. If that changes then it will be attacked. Most seem to be focused on network resiliency. But I don't see that as the attack point. What do you think would happen to the value of BTC if MtGox were to be shut down? And then go after every company within the system that accepts bitcoin? It's value would plummet. I don't see it being eliminated as a black market currency but gov could certainly go a long way toward driving it's use out of the on record business environment and into the black market. I won't make predictions as to how that would play out but I can tell you it wouldn't be as straight forward as the scenario in the OP.

Of course there is alot of wishful thinking in the OP, as I said this is hypothetical only.


Here is something to consider though. The majority of Bitcoin transactions are currently to exchange illegal goods/services, most of which are totally untraceable because the websites are only available through the TOR network. A significant number of Bitcoin purchases are done through cash in person, and is actually still a very strong network.

The services which you are concerned the government may attack could only scratch the surface and likely remove the only investors who aren't participating in organized crime(Minus Counterfitting of course, lol). Drug dealers continue business as usual, but now you can't buy DVDs online with Bitcoins. I hope that isn't what qualifies as a win for the US government.

Everytime the government tries to suppress freedom it backfires. Decentralized websites already exist and perhaps that will be the future. They remain forever out of reach from authorities.

The final play the government could make would be shutting down the internet. How likely is that to happen?

I would consider that a win for the powers that be if bitcoin were restricted to being a black market currency and private cash trade. It would mean the vast majority of the economy remains dominated by the currency they dictate and can control. Consider groceries, utility bills, mortgage payments, payroll, petrol, hospital bills, investments in stocks and bonds, etc all still largely being done in dollars while bitcoin is used for Craigslist transactions and buying weed over TOR. Yes, I'd call that a win for .gov if the goal is for bitcoin to supplant the dollar.

[Brutus I]

Anyway I'm not making predictions on how everything will play out because I don't know. It is going to be interesting though. My only point was that the two greatest powers of government are the power to tax and the power to counterfeit. Those in power are not going to see either of those undermined without a fight. Shut down the internet? Nope, I don't see that. There are other options though that I think will at least be tried. Will be interesting to see how the market responds. It is a struggle that is as old as mankind.

[StephenJH]

Point taken.

[GimpyPrime]

I would consider that a win for the powers that be if bitcoin were restricted to being a black market currency and private cash trade. It would mean the vast majority of the economy remains dominated by the currency they dictate and can control. Consider groceries, utility bills, mortgage payments, payroll, petrol, hospital bills, investments in stocks and bonds, etc all still largely being done in dollars while bitcoin is used for Craigslist transactions and buying weed over TOR. Yes, I'd call that a win for .gov if the goal is for bitcoin to supplant the dollar.

We also need to keep in mind that Bitcoin exchanges occur at an international level. So the USA makes it a black market currency, then they need every other country on board. Probably starting with Canada and the UK.

If a single country anywhere decided to adopt Bitcoin as their nations currency that means the USA would need to sanction that country to prevent legal trades from occuring. A sanction is an act of war and currently I can only think of 3 countries who they could do that to... Cuba, Iran and North Korea. In short that basically means Bitcoin needs some countries to sponsor it.

The USA can try all it wants to regulate purchases internally if it goes that far, but they can't shutdown international trade without collapsing themselves.

[StephenJH]

US could always start mining with some 'under the mountain' gear.

[itsunderstood]

US could always start mining with some 'under the mountain' gear.

I've suggested this as well, better to use prison labor.  Also municipalities and gov's have free electricity and tech money (paid for by taxes and bonds and pension stealing) which will defeat common miners I guess.

China could do it even easier, since their employees cost nothing, and they are closer to Taiwan (chips)

What if they have a mining pool of some 1^16 terahashes per second?  Something outrageous?  I suppose once this happens, the blockchain will have correct data as to who and where is operating this 'killer mining force'?

Hmmm, another note here, since it seems that US Marshalls/Homesec/Treasury and local city cops/SWAT are going to eventually combine with the US military and arrest all county sheriffs and deputies in the US (at least the non-gun-grabbing sheriffs that is), maybe some counties will want to start paying their sheriffs and deputies in bitcoin?  Probably society will break down once the sheriffs feel pushed, and they might have to find other ways to be funded if the Treasury shuts down their payment avenues.