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Author Topic: A country that embraces bitcoin early will have a lot of rich people later  (Read 2181 times)
dan123
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December 18, 2013, 07:54:09 AM
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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.

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December 18, 2013, 08:11:26 AM
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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.
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December 18, 2013, 08:36:33 AM
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Oh no the 'trickle down' economists have arrived.

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December 18, 2013, 08:51:36 AM
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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.

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December 18, 2013, 09:04:09 AM
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Denmark seems to have embraced it!

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December 18, 2013, 09:23:55 AM
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i was actually thinking of a day that a ruined country like idk syria makes bitcoin their official currency. that would get things crazy Smiley

the only prob is that everyone will need a pc for that .. maybe some other way... Huh
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December 18, 2013, 09:33:54 AM
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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.

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.
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December 18, 2013, 11:57:10 AM
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Oh no the 'trickle down' economists have arrived.

He has a point though first country to use will have its citizens stock up on bitcoin.
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December 18, 2013, 03:49:07 PM
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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.
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December 18, 2013, 04:58:42 PM
 #10

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.

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December 18, 2013, 05:17:44 PM
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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.
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December 18, 2013, 06:25:10 PM
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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.



u mean Germany ?  Roll Eyes
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December 18, 2013, 06:28:05 PM
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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.
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December 18, 2013, 06:37:33 PM
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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.
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December 18, 2013, 07:10:03 PM
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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.
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December 18, 2013, 08:24:28 PM
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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.
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December 18, 2013, 08:26:27 PM
 #17

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.

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December 18, 2013, 08:41:07 PM
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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.

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December 19, 2013, 11:08:46 AM
 #19

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.
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.

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December 19, 2013, 11:25:00 AM
 #20

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.

Oh no the 'trickle down' economists have arrived.

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