Could a nation completely control a cryptocurrency? Good or bad

[merlinsbeard]

In many ways, a blockchain currency is the ideal form of money for a country.

1. Every single transaction is recorded, no matter what. This is a huge advantage over cash.

2. Relatively cost-efficient (e.g. a US penny costs more to make than it's worth). Compared to having to re-design and re-issue anti-forgery bills every decade or so.

3. Safe as long as it requires multiple identification.

4. Could be designed to be instantaneous and only require internet access.

5. Supply/demand/mining power could be tightly regulated and micro-adjustments can be made.

The only cons (for the govt) I can think of is that it requires a deep internet/electricity infrastructure to be widely implemented, and that it might compete with the existing currency, and the older generations would have to be taught. For citizens, the pro's would depend on what design it takes and the con's would be loss of privacy on your finances.

In countries like South Korea (where more than 50% of the pop live in cities) or Singapore, cryptocurrency wouldn't be difficult to implement. Many of these countries already use e-cash for public transport, ect.

I doubt that a nation would adopt an outside currency but probably would be willing to create their own. Could they completely control such a system, would it succeed, and would it be good for the current community?

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[franky1]

at the last count there were 60-ish of the 200 nations that are getting interested in blockchain (by this im talking about blockchain ledgers that will sidechain to hyperledger, not bitcoin)

so they can control their crytocurrency. but they would still be 'mananged' /audited by the IMF (main top ledger of hyperledger pyramid) so it wont be complete control.

and will end up not offering much better 'services' to citizens but would be more cost effective to the nation. and offering more ways for banks back-end to profit

[BillyBobZorton]

The future will be exactly that: A nation state controlled cryptocurrency. Physical cash will be removed, so bitcoin will be the only way to move money outside of the state's tyrannical control. That's why they will attack bitcoin and try to control the network by pushing for big block agendas. Once they centralize the nodes, they will take over the network and tame bitcoin into a non censorship resistant tool.

[franky1]

The future will be exactly that: A nation state controlled cryptocurrency. Physical cash will be removed, so bitcoin will be the only way to move money outside of the state's tyrannical control. That's why they will attack bitcoin and try to control the network by pushing for big block agendas. Once they centralize the nodes, they will take over the network and tame bitcoin into a non censorship resistant tool.

you have no clue

1. NODES decide what is acceptable.  not pools, not devs. its actually the "trust a corporate paid dev" that would lead to failure.

2. if nodes cannot handle certain amounts of data, they would not flag desire for it.. pools seeing nodes cant accept it wont make large data due to risk of their attempts being rejected (meaning worthless them even trying). so nodes wont be cut out the system. nodes dominate the system and its devs/miners that would drop out if pools cannot gain funds from mining. and devs that will drop out if their corporate investments dry up if nodes decide not to change into commercial service nodes to give devs fee's to repay investors

3. bitcoin nodes need to remain diverse to not allow a team (from any brand) to dominate the code and twist it into something of commercial banking interest. bitcoin nodes need to remain diverse to use CONSENSUS to decide what is safe and good.. not devs or pools to decide for the network. more diverse brands/nodes.. not one king leader brand that changes rules without node vote

4. devs and pools are not the leaders and should not be seen as the leaders. devs and pools should only be seen as the workers/employee's of bitcoin.

5. the network should decide for itself what is manageable, and have NATURAL growth that nodes can handle. not based on what devs spoon feed as rules. but as what nodes CAN handle. by the nodes flagging what they can handle

6. stop believing the "gigabytes by midnight" scare stories, stop believing the "bitcoin beat visa 900mill customer by tommorow" scare stories.

7. think rational. we are at 0.026% population now. dont expect "100% one-world currency by midnight" instead expect 5% world utility in 20-30 years, which still will make bitcoin in the top 5 'nations' of the world. and at a natural, realistic, possible way.

8. getting to atleast 5% in 20-30 years is EASY onchain, without asking much from nodes, because technology of the next 20-30 years grows.
   we do not need to surrender into commercial permissioned LN hubs to "be like visa/paypal"..

9. we just need to drop the exaggerated doomsdays of "cant scale by tonight, so need LN's commercial solution forever".. and instead be rational. start allowing real node defining/deciding(dynamic) onchain scaling. where pools only make bigger blocks when nodes have consensus to let pools do so without much/any orphan risk.

be rational. think smart. and do research, dont play the script games of believing something because a paid dev must be good because he wouldnt be paid otherwise.
think about whats best for bitcoin. not the dev's.
think about bitcoins open permissionless no barrier of entry ethos. not the commercial services that look pretty and propose to make everyone rich

[unamis76]

The only cons (for the govt) I can think of is that it requires a deep internet/electricity infrastructure to be widely implemented

The traditional banking system does too, and you see them in every corner of every city. There were multiple times news even saying that the traditional banking system consumes way more electrical resources than the whole Bitcoin network, so that's not really a disadvantage...

This infrastructure is set for many places in the work, it can be "reconverted" for cryptocurrency use...

[franky1]

The only cons (for the govt) I can think of is that it requires a deep internet/electricity infrastructure to be widely implemented

The traditional banking system does too, and you see them in every corner of every city. There were multiple times news even saying that the traditional banking system consumes way more electrical resources than the whole Bitcoin network, so that's not really a disadvantage...

This infrastructure is set for many places in the work, it can be "reconverted" for cryptocurrency use...

there are OVER 90,000 FIAT bank branches in america alone.
imagine each bank branch has 10 pc's..
EG 6 cashier/teller terminals. a couple admin computer terminals, bank manager and such terminals.

thats 900,000 pc's
and im not even counting the ATMS
and im not even counting the banks customer call centre terminals
and im not even counting the banks HQ skycrapers
and im not even counting the banks nasdaq market terminals
and im not even counting the banks auditors terminals
and im not even counting the banks security guards terminals
and im not even counting the banks regulators terminals.

so lets say there are 2million computers linked up just for "the dollar"

.. take some time to let that sink in..

[LeGaulois]

Could even consider the oil/petrol used to transport the funds (it is still an energy used and still needed), SWIFT, CHIPS, RTGS, FedWireand so on..
When I searched for it some months ago I have read first from a researcher in environment it has been calculated that a single bitcoin transaction requires as much electricity as the daily consumption of 1.6 U.S. households , and this number has increased since I finally found the bitcoin network use the same energy as a city of 4 millions citizen

[squatz1]

The whole point of bitcoin and other cryptocurrencies (well most that is!) is for decentralization to occur with the coin and the community. While it would probably be possible for a government like the US to sink enough money into mining to be able to take over bitcoin or any other cryptocurrency.

I'd think that would end the whole idea to bitcoin and would remove everything that Satoshi worked for, so with that I'd like if governments stayed out of cryptocurrencies and still to their fiat money.

[franky1]

Could even consider the oil/petrol used to transport the funds (it is still an energy used and still needed), SWIFT, CHIPS, RTGS, FedWireand so on..
When I searched for it some months ago I have read first from a researcher in environment it has been calculated that a single bitcoin transaction requires as much electricity as the daily consumption of 1.6 U.S. households , and this number has increased since I finally found the bitcoin network use the same energy as a city of 4 millions citizen

in total there is probably around 230,000 asics.(3000 peta)

an asic is 1.3kwh
which is about the same as what an average household uses.

thus roughly 200,000-250,000 households.(~~1million citizens (based on 2parents 2 children per households))

but your other initial 1.6 households per tx cost has merit. i remember myself coming up with a similar figure ages back

though i think that number has changed since
quick maths a block has ~2100 tx and produces 6 blocks an hour = 12600tx an hour
=18 households

but thats based on ALL 20+ pools running.. rather than just the winning pools hashpower of the blocks they win (which would be still around the 1-2 household cost)

[d5000]

I don't see the point for a state to create a crypto-currency. If they want a centrally controlled "digital cash"-type currency, they could implement a Paypal-like system and it probably would work better for them, as it would be much less hassle to control the supply.

With a cryptocurrency with a similar design like Bitcoin (PoW based and open source), there would be the risk for the nation to lose control to an external entity, as everyone could mine it. The way to prevent that is to use a premined cryptocurrency that uses PoS as "consensus" method and the State holding a large proportion of the coins (>50%), or to use a "private" cryptocurrency with only authorized servers (e.g. Nem's Mijin), but there I see no real advantage to a totally centralized system like Paypal, as both have single points of failure.

[deisik]

The future will be exactly that: A nation state controlled cryptocurrency. Physical cash will be removed, so bitcoin will be the only way to move money outside of the state's tyrannical control. That's why they will attack bitcoin and try to control the network by pushing for big block agendas. Once they centralize the nodes, they will take over the network and tame bitcoin into a non censorship resistant tool.

You are overexaggerating it, beyond the "limits of truth", so to speak

First, today's fiat currencies already pretty well cut it as state controlled "cryptocurrencies". Most fiats nowadays are digital anyway, and I don't think that adding the term "crypto" to their title is set to change much in respect to their form and essence. Cash can be removed only after governments efficiently solve the "last mile problem", but this is not going to happen any time soon. Even in most developed but extended countries like the US there are a lot of places where cash is still the king. Further, the irony is that the problem that governments have to tackle before outlawing cash is the same problem that Bitcoin faces, so by removing cash they are simultaneously giving more leeway to Bitcoin

[Yakamoto]

So what you're describing is essentially a digital fiat currency that simply adds mining as a layer to more conventional methods?

Mediocre in my opinion, less benefits compared to the currency system and it makes it substantially easier for most people and easier for governments to do what they want.

[Shady]

Whatever it builds up to would bring the best. There are numerous airports into BTM (Bitcoin Teller Machine.)

Since the beginning multiple people have been developing data farms and cryptocurrency faucets + other investment assets that allow the end users to control what goes into circulation.

After more comes, governments have every interest in shaping the future. But other than for indirect development tap, it appears they are going through with this silently so it stays the way intended.

[LeGaulois]

Could even consider the oil/petrol used to transport the funds (it is still an energy used and still needed), SWIFT, CHIPS, RTGS, FedWireand so on..
When I searched for it some months ago I have read first from a researcher in environment it has been calculated that a single bitcoin transaction requires as much electricity as the daily consumption of 1.6 U.S. households , and this number has increased since I finally found the bitcoin network use the same energy as a city of 4 millions citizen

in total there is probably around 230,000 asics.(3000 peta)

an asic is 1.3kwh
which is about the same as what an average household uses.

thus roughly 200,000-250,000 households.(~~1million citizens (based on 2parents 2 children per households))

but your other initial 1.6 households per tx cost has merit. i remember myself coming up with a similar figure ages back

though i think that number has changed since
quick maths a block has ~2100 tx and produces 6 blocks an hour = 12600tx an hour
=18 households

but thats based on ALL 20+ pools running.. rather than just the winning pools hashpower of the blocks they win (which would be still around the 1-2 household cost)

ok lower than what I thought, thanks. If we take the Bitcoin network in the large sense, this consumption is maybe small compared to existing payments and therefore seems relevant. When we look closely at what this energy is used for, it seems not so efficient still ?
I mean it can be lowered, right ?

[franky1]

ok lower than what I thought, thanks. If we take the Bitcoin network in the large sense, this consumption is maybe small compared to existing payments and therefore seems relevant. When we look closely at what this energy is used for, it seems not so efficient still ?
I mean it can be lowered, right ?

do you know that las vegas alone uses more electric to control and secure. plastic poker chips

do you know that in america there are 90,000 bank branches with an average 10pc's per branch (4kwh / branch(360,000kwh))
equivalent of 277,000 asics
then add on the ATMS, bank call centres, auditors, regulators, security guards, etc
equivalent of about 660,000 asics
and thats before even adding the rest of the financial industry like insurance, market traders, etc

but to answer your question
an asic used to be 1kwh for just 5 gigahash..
now its 1.3kwh for 13terrahash,
im sure the ration of kwh:hash can become more efficient in future

[merlinsbeard]

I don't think electricity would be that big of a problem for a government, especially one with industrial manufacturing sectors. I foresee solar/wind power becoming cheaper and cheaper and IMHO, and we will know if nuclear fusion is feasible around 2050.

I think the most challenging infrastructure aspect would be trying to teach the older generations, and ubiquitous internet access.

I would have a hard time explaining to my grandparents how exactly blockchains, nodes, miners work; you would need a massive campaign to explain benefits/differences in dozens of languages to reach everyone.
And not every restaurant/store/business, especially in poorer urban or rural areas, has internet access. If they do, it is sometimes spotty. There is no cellular service in much of the countryside. To wire up US or Russia to the levels of ubiquitous, cheap, fast internet in Scandinavian countries or Japan/Korea would take decades and billions of dollars.

There would also be need for massive hashing power.

So would this be worth it for a government to create and control a cryptocurrency? I still think it has benefits over a Paypal-like system. This way, every transaction, even outside the system or inside dark pools, will be trackable and taxable [providing tumblers are banned]. You could tell who held the money, where/when, even if they were just a middleman or and outside institution. You can't do that cash or paypal(unless every nation at once adopts paypal).Cash is still king and the cheapest way to get anything in the US precisely because it is un-trackable and un-taxable most of the time.

It would be easier to curb insider trading and hold politicians accountable if every single penny they ever touched could be tracked forever.

[deisik]

I would have a hard time explaining to my grandparents how exactly blockchains, nodes, miners work; you would need a massive campaign to explain benefits/differences in dozens of languages to reach everyone

When money talks no one cares which grammar it uses

As to me, this is not actually required. How many people know how money is being created today? And how, for example, digital payments are processed by banks? Personally, I have a rather vague idea how technically this system works. I mean how data is exchanged between, say, a central and commercial banks. Basically, this knowledge is not required for successful using or earning money. To drive a car you don't need to know gory details about how internal combustion engine works. What folks need from a monetary unit is simplicity of use and stability of value

[KennyR]

A specific country cannot make control of a particular digital currency anytime. If it can be controlled those seems to be not anonymous. It gives the possibility of tracking. Unlike other digital currency such digital currency has a central authority.

[ImHash]

Saying countries using cryptocurrency of their own is like saying people living in virtual reality, have you even considered what happens when merchants trying to import and export goods and items from a country? only way is for all the countries in the world to use crypto. and since it's a centralized system there will be no need for difficulty to increase or no POW nor POS will be implemented rather they'll premine everything from the start and slowly distribute in exchange of cash and valuable items.

[isoneguy]

There's nothing inherently wrong with a country adopting it's own cryptocurrency. In fact if it hasn't already happened then it's inevitable.