How does a country fully adopt Bitcoin?

[jamesc760]

Neither Iceland nor Cyprus. My vote goes to North Korea and Iran. Cuba, Venezuela maybe. What a great way to disrupt the Western banking system around the world and to bolster their own economy at the Western loss and discomfort. Too bad the monkey pygmies running these third world countries don't have the brains.

[1714152119]

1714152119

[1714152119]

1714152119

[shawshankinmate37927]

How does a country fully adopt Bitcoin?

Voluntarily--one person at a time.

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So I don't know if my question was answered. How would a central bank buy a sum of bitcoins with their fiat? What bitcoin market would take a country's currency if it was going to be switched out by bitcoins? Where would bitcoin sellers spend their newly acquired newly worthless kronur? This is basically why I think it will only happen organically, with local people choosing to accept bitcoin over the state alternative and continuing to do so until fiat declines in the value and utility transferred into Bitcoin.

Your question has not been answered, though it's a really neat question.  If i understand it correctly, "What would the actual mechanics of a country converting to bitcoin be?"
For the changeover to happen, bitcoins would have to have 0 value at the time of the exchange, and notes "converted" to bitcoin could be destroyed at the time of conversion -- no different than replacing worn-out notes for freshly-printed ones.  Which pretty much means Bitcoin is out, and altcoin/bitcoin fork is needed. 
This is the problem at it's barest -- excluding technical details like wallets, pos mods, consumer education, yada yada.

[molecular]

Neither Iceland nor Cyprus. My vote goes to North Korea and Iran. Cuba, Venezuela maybe. What a great way to disrupt the Western banking system around the world and to bolster their own economy at the Western loss and discomfort. Too bad the monkey pygmies running these third world countries don't have the brains.

they might have the brains even, but not the knowledge.

[solex]

... bitcoins would have to have 0 value at the time of the exchange, and notes "converted" to bitcoin could be destroyed at the time of conversion -- no different than replacing worn-out notes for freshly-printed ones.  Which pretty much means Bitcoin is out, and altcoin/bitcoin fork is needed...

So, if any country wanted to revert 100% to the gold standard, and replace their paper currency with gold coins, like krugerrands and sovereigns, then it couldn't do this until the gold price first went to zero???

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... bitcoins would have to have 0 value at the time of the exchange, and notes "converted" to bitcoin could be destroyed at the time of conversion -- no different than replacing worn-out notes for freshly-printed ones.  Which pretty much means Bitcoin is out, and altcoin/bitcoin fork is needed...

So, if any country wanted to revert 100% to the gold standard, and replace their paper currency with gold coins, like krugerrands and sovereigns, then it couldn't do this until the gold price first went to zero???

No, it couldn't.  If you're being sarcastic, and think otherwise, please explain the mechanics.

Edit:  It's a bit unnerving that the same people insisting that fiat is worthless *at the very same time* believe that worthless paper can buy a bunch of gold.   Assume for a second that gold has intrinsic value -- why would anyone want to sell it for worthless paper, made *explicitly worthless* since the state which issued the paper is no longer planning to back it (they switched to gold, remember?  The notes are as valuable as yesterday's newspapers)

But if we decide that bitcoin is an otherwise attractive currency, its current value is irrelevant.  A country can start using *an exact copy of bitcoin,* starting with a blank blockchain.  This will provide the necessary zero-value bitcoins, the issuing state can premine as much or as little as it wishes, use whatever algo it wishes, and release the coin into the wild in a controlled fashion.  It will be as conceptually elegant as the bitcoin of today, without the drawback of having to pay anyone *anything.*

I wouldn't want a state-created Bitcoin.  Blockchain, with its "pseudonymity" would turn into the best transaction-tracking software evar.  But that's a different topic.

[solex]

No, it couldn't.  If you're being sarcastic, and think otherwise, please explain the mechanics.

I was trying to make the point more obvious that a country can move from a fiat system to a gold (or bitcoin) system if it chooses, and the target currency does not have be valued at zero. In fact, it is far better if it is worth something already, and gets bought by a CB using its fx reserves. If Greece, for example was to create a "New Drachma" expect it to devalue 50% within a year - as the world, and most Greek citizens, won't trust it.  It would be better for a CB to use Bitcoin than start its own crypto as it would need a massive amount of hashing power to secure it, and it would be a weak golden goose for buccaneer miners all over the world to have a go at getting a 51% stranglehold on it.

Edit:  It's a bit unnerving that the same people insisting that fiat is worthless *at the very same time* believe that worthless paper can buy a bunch of gold.  

No one is saying fiat is worthless, just that it is heading to worthlessness as the years pass. Of course you can buy a gold bar for a bunch of paper currency today. It happens all the time in jewelry and precious metal retail stores!

[vokain]

fiat should be worthless, but we still accept things for it, and that, that is what makes it worth something :p

oh the tragedy

[solex]

fiat should be worthless, but we still accept things for it, and that, that is what makes it worth something :p

oh the tragedy

Agreed. But until 2009 none of us had any other choice (apart from stashing some gold away for emergencies).  Most people still don't know that a paradigm shift is underway. Soon they will all wake up....

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No, it couldn't.  If you're being sarcastic, and think otherwise, please explain the mechanics.

I was trying to make the point more obvious that a country can move from a fiat system to a gold (or bitcoin) system if it chooses, and the target currency does not have be valued at zero. In fact, it is far better if it is worth something already, and gets bought by a CB using its fx reserves.

This is patently absurd.  If Greece was solvent (*had* enough dollars/goodies in FX), it would be ... well, solvent, but it's not, so it isn't.  Greece has this much in its CB, in euros:



But it's not in euros, or in dollars or gold -- it's in SDRs.  Have fun shopping

If Greece, for example was to create a "New Drachma" expect it to devalue 50% within a year - as the world, and most Greek citizens, won't trust it.  It would be better for a CB to use Bitcoin than start its own crypto as it would need a massive amount of hashing power to secure it, and it would be a weak golden goose for buccaneer miners all over the world to have a go at getting a 51% stranglehold on it.

Are you suggesting that  all the bitcoins that exist right now are worth less than all of the mining gear hashing right now?  Otherwise it's clearly cheaper to buy a few ASICs and sling some hash  Or buy just 51% of those ASICs & double-spend into prosperity.  

Edit:  It's a bit unnerving that the same people insisting that fiat is worthless *at the very same time* believe that worthless paper can buy a bunch of gold.  

No one is saying fiat is worthless, just that it is heading to worthlessness as the years pass. Of course you can buy a gold bar for a bunch of paper currency today. It happens all the time in jewelry and precious metal retail stores!

Please understand that the very thing that makes fiat worth less (monetary inflation) also makes more money (monetary inflation).  If a gallon of milk costs me twice as much as it did before, but there's twice as much money to buy it, nothing has changed (other than i now owe exactly half as much as i used to -- PROFIT!).

[painlord2k]

If I would suggest some countries going Bitcoin, I would suggest some little country, with little to lose abandoning the US$ or the €.
Maybe an island like St.Kitt & Nevis, Dominica, Panama, etc.

Panama is an interesting example of a country without a central bank.
They have a local currency pegged to the US$ but they just mint a few coins, no banknotes. They use US$ instead.
No central bank to control capital influx or outflux, if there is too much capital incoming, it will go out as easily as it come in. So it is difficult to have an housing bubble or any other bubble.

They were thinking to introduce € side by side of US$ as legal tender. Nothing prevent them from doing the same with bitcoin; nothing apart the wrath of the US.

[vokain]

Please understand that the very thing that makes fiat worth less (monetary inflation) also makes more money (monetary inflation).  If a gallon of milk costs me twice as much as it did before, but there's twice as much money to buy it, nothing has changed (other than i now owe exactly half as much as i used to -- PROFIT!).

Yeah, you say that until you want to save for a rainy day ie retirement.

[Hailong]

I chatted with a lawyer yesterday about this topic. He told me that if the government (CB) could not issue and endorse the currency, other countries would not accept it as a legal foreign exchange.

But I do not agree, because if lots of people accept bitcoin, we can do our exchange without the government like what we do now. No government endorse the value of gold, but a government can still use gold as its primary currency, so does bitcoin.

[vokain]

I chatted with a lawyer yesterday about this topic. He told me that if the government (CB) could not issue and endorse the currency, other countries would not accept it as a legal foreign exchange.

But I do not agree, because if lots of people accept bitcoin, we can do our exchange without the government like what we do now. No government endorse the value of gold, but a government can still use gold as its primary currency, so does bitcoin.

As in,  a country is forced (legally) to exchange national currencies via forex, but won't be forced to exchange national currency for Bitcoin? makes sense

[Realpra]

Well:

1. Buy some BTC.
2. Announce conversion date 2 yrs in advance.
3. Educate public (no tax breaks for mining wtf does that help??)
4. Give BTC for old currency at a set (favorable) rate.

I think it would be insanely profitable for a country to do this.

[vokain]

Well:

1. Buy some BTC.
2. Announce conversion date 2 yrs in advance.
3. Educate public (no tax breaks for mining wtf does that help??)
4. Give BTC for old currency at a set (favorable) rate.

I think it would be insanely profitable for a country to do this.

But wouldn't that mean that just upon announcement, the value of fiat will instantly plummet? I just don't see the the incentive for bitcoin sellers to this country.  

1. Your scenario's 1 and 2 happens
2. I sell bitcoins for their fiat..
3. I hold the country's fiat that they do not wish to hold, seeing as they want btc
4.
5. broke

[solex]

Well:

1. Buy some BTC.
2. Announce conversion date 2 yrs in advance.
3. Educate public (no tax breaks for mining wtf does that help??)
4. Give BTC for old currency at a set (favorable) rate.

I think it would be insanely profitable for a country to do this.

But wouldn't that mean that just upon announcement, the value of fiat will instantly plummet? I just don't see the the incentive for bitcoin sellers to this country.  

1. Your scenario's 1 and 2 happens
2. I sell bitcoins for their fiat..
3. I hold the country's fiat that they do not wish to hold, seeing as they want btc
4.
5. broke

1. They have to buy some BTC using $$$ or euros or by selling gold. If you sell the CB some BTC you get hard currency back.
2. For their people they guarantee a conversion rate for their old dying fiat. i.e. xxx old fiat for 1 BTC.

 It's do-able. Lots of detail, but doable.

[vokain]

Well:

1. Buy some BTC.
2. Announce conversion date 2 yrs in advance.
3. Educate public (no tax breaks for mining wtf does that help??)
4. Give BTC for old currency at a set (favorable) rate.

I think it would be insanely profitable for a country to do this.

But wouldn't that mean that just upon announcement, the value of fiat will instantly plummet? I just don't see the the incentive for bitcoin sellers to this country.  

1. Your scenario's 1 and 2 happens
2. I sell bitcoins for their fiat..
3. I hold the country's fiat that they do not wish to hold, seeing as they want btc
4.
5. broke

1. They have to buy some BTC using $$$ or euros or by selling gold. If you sell the CB some BTC you get hard currency back.
2. For their people they guarantee a conversion rate for their old dying fiat. i.e. xxx old fiat for 1 BTC.

 It's do-able. Lots of detail, but doable.

oh, that makes a bit more sense to me. i could see there being quite the slippage though. also, for foreign holders of the native currency, do they get a guaranteed conversion rate too?

[solex]

oh, that makes a bit more sense to me. i could see there being quite the slippage though. also, for foreign holders of the native currency, do they get a guaranteed conversion rate too?

Yes., indeed. All holders of their old fiat would be allowed to exchange at the fixed fate, but there would probably be a time limit of a year at retail banks, but several years at the CB HQ. I believe old French francs can still be converted to euro at the CB, 12 years after the euro was introduced.

[domob]

Yes., indeed. All holders of their old fiat would be allowed to exchange at the fixed fate, but there would probably be a time limit of a year at retail banks, but several years at the CB HQ. I believe old French francs can still be converted to euro at the CB, 12 years after the euro was introduced.

That's also the case with Austrian Schillings (of which still billions are out there as cash), and IIRC the CB guarantees to exchange them "forever" (at least without a deadline already fixed).