Perfect example of why governments must hold Bitcoin

[deisik]

If Maduro was holding Bitcoin instead of gold, specially gold outside of your borders, he wouldn't have had that little problem. Of course Maduro is probably too computer illiterate to get the thing done.

You could make the argument of "if he was holding his gold inside his country he wouldn't have been denied access". Well still, it would make sense to hold Bitcoin and not gold, specially when you have an empire like US always threatening anyone with entering your country and taking all of your gold and oil reserves as they will do with Venezuela. With Bitcoin they couldn't be able to take them as you could have safe backups overseas.

This is an unbeatable logical argument for the bullish case of institutions holding Bitcoin. Im not saying they should dump all of their gold, but definitely dump a certain % and diversify with Bitcoin. This will happen sooner or later, and it just takes a first mover for the rest to follow, they will not be able to afford not having some due game theory, similar to not having powder back in the way when when wars were fought with swords.

There's always a problem when an asset is held by a third party.

The same can be said with any fiat, in my opinion. There is a risk that the bank who holds a country's reserves (especially if its jurisdiction is overseas) goes rogue and it refuses to move funds when it is instructed to. That risk is the same as what has happened here to Mr. Maduro's gold withdrawal.

Bitcoin combats this issue given its decentralization and trustless nature, as there needs no third parties to get a transaction processed and done

But it creates a whole host of other issues instead

For example, it will be extremely difficult to claw back the bitcoins if Maduro or one of his minions decides to pocket them. As you can see, no third party here is not without its shortcomings either. And I'm not even talking that the coins can be easily stolen or made appear stolen. You can steal gold too, but it will be a lot harder to hide this gold, especially if the amount of it is measured in tonnes (though I doubt that Venezuela has that much gold)

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[Reinsurer]

EU and UK are toothless loyal US dogs. They doesn't have own decision making process now. The point here isn't is Maduro good or bad, but the point is they are breaking all democratic principles.

Having Bitcoin will not help Maduro anyway. He will need to convert to fiat at some point. And all cryptos are what 120B? This is nothing compared to world finances and needs.

Thus, Washington intends to prevent the country's authorities from "plundering the wealth of Venezuela for their corrupt purposes." Bitcoin is unlikely to be a panacea in this case.

[romero121]

Even a government personality was unable to withdraw his asset on need. This shows unlike the power they hold, they are dependent on a third party source for all their financial support. Now the same is serving as a troublesome. This gets eliminated with the use of cryptocurrency. As the Op title describes more the bitcoin hold by governments more will be the security of the nation. Because on emergency the government cannot wait anymore.

[stompix]

You could make the argument of "if he was holding his gold inside his country he wouldn't have been denied access". Well still, it would make sense to hold Bitcoin and not gold, specially when you have an empire like US always threatening anyone with entering your country and taking all of your gold and oil reserves as they will do with Venezuela. With Bitcoin they couldn't be able to take them as you could have safe backups overseas.

Yeah, too bad you're missing something:

On 25 November 2011, the first of US$11 billion of repatriated gold bullion arrived in Caracas; Chavez called the repatriation of gold a "sovereign" step that will help protect the country's foreign reserves from the turmoil in the U.S. and Europe.[226] However government policies quickly spent down this returned gold and in 2013 the government was forced to add the dollar reserves of state owned companies to those of the national bank to reassure the international bond market.

Most of the gold was already repatriated...and spent.

Second, you know that on this forum we have a rule, no collateral no loan...guess who wants loans without collateral right now?

[drumamat]

EU and UK are toothless loyal US dogs. They doesn't have own decision making process now. The point here isn't is Maduro good or bad, but the point is they are breaking all democratic principles.

Having Bitcoin will not help Maduro anyway. He will need to convert to fiat at some point. And all cryptos are what 120B? This is nothing compared to world finances and needs.

Thus, Washington intends to prevent the country's authorities from "plundering the wealth of Venezuela for their corrupt purposes." Bitcoin is unlikely to be a panacea in this case.

It is very difficult to draw conclusions when it is not clear what is happening in Venezuela.Apparently everything is very difficult there.And bitcoin really in such a situation is unlikely to help.I think that even if Maduro and his government converted Fiat money into bitcoin,opponents of the current government would still find a way to prevent this money from leaving the country.

[target]

In other words, they don't own gold anymore. Its like storing your BTC in an exchange that suddenly goes rogue. You can't withdraw it anymore because of technical issues they are going to be making out.  In this case however, the gold was repatriated which basically are all gone. This isn't  an example of why government has to have BTC since these gold are for dollar reserves, they can't do it with BTC either.

[bitmedia]

In other words, they don't own gold anymore. Its like storing your BTC in an exchange that suddenly goes rogue. You can't withdraw it anymore because of technical issues they are going to be making out.  In this case however, the gold was repatriated which basically are all gone. This isn't  an example of why government has to have BTC since these gold are for dollar reserves, they can't do it with BTC either.

There are not even legit exchanges existed... Governments should regulate cryptocurrencies, payments, contracts in crypto... Only then they may invest and hold Bitcoins.

[maemunah]

In other words, they don't own gold anymore. Its like storing your BTC in an exchange that suddenly goes rogue. You can't withdraw it anymore because of technical issues they are going to be making out.  In this case however, the gold was repatriated which basically are all gone. This isn't  an example of why government has to have BTC since these gold are for dollar reserves, they can't do it with BTC either.

There are not even legit exchanges existed... Governments should regulate cryptocurrencies, payments, contracts in crypto... Only then they may invest and hold Bitcoins.

because in order to advance the economy of the government to be stable and I think it is better if the government cooperates with bitcoin so that the country is advanced

[audaciousbeing]

You have made an argument based on the issue of control. Its because there is control over the gold bars that's why they can stand and insist a country cannot access its legitimate holdings. However, let's look at the effect on the overall market should the country own bitcoin instead and at once decides to sell out $1.2billion worth. The effect would not only crash the price of bitcoin, it could distort the entire crypto currency market.

[davinchi]

How would he cash out the bitcoin tough ?
Like if he had 1.2 billion dollar worth of bitcoin instead of 1.2 billion dollar gold, how would he cash out the 1.2 billion dollar worth of bitcoin ?

Not only it would be impossible to do so in his own country because I am not even sure that much money exists in Venezuela as a whole but also would have hard time selling that much bitcoin over the counter so he would had to open an account somewhere and sell his coins which would drop the price and also the value of his coins and maybe get 1 billion probably a lot less for them.

Bitcoin is something that is amazing for storing and also great for small amounts and awesome for transactions and all that however when it comes down to cashing out bitcoin is not the best way.

[deisik]

How would he cash out the bitcoin tough ?
Like if he had 1.2 billion dollar worth of bitcoin instead of 1.2 billion dollar gold, how would he cash out the 1.2 billion dollar worth of bitcoin ?

Not only it would be impossible to do so in his own country because I am not even sure that much money exists in Venezuela as a whole but also would have hard time selling that much bitcoin over the counter so he would had to open an account somewhere and sell his coins which would drop the price and also the value of his coins and maybe get 1 billion probably a lot less for them.

Bitcoin is something that is amazing for storing and also great for small amounts and awesome for transactions and all that however when it comes down to cashing out bitcoin is not the best way

You are looking at it from a wrong angle

Why do you not ask yourself why he would have to cash out in the first place? He could just declare Bitcoin as a legal tender in Venezuela instead of Bolivar (i.e. official currency), and that would solve most if not all woes with hyperinflation in this country. If Bitcoin is too expensive for that purpose and not very efficient as a means of payment (which seems to be the case), he could also make Litecoin an official medium of exchange in addition to Bitcoin being legal tender. This couple would work just wonders together in curbing insane inflation rates in Venezuela

[metalglowd]

Well, it's just that we can't easily compare bitcoin and gold, as a whole it is very different, for gold, you don't know the supply correctly but people have very high demand up to now, while bitcoin, I will say this as speculation and not suitable to be called an investment. Because of its bubble. And im sure every country has its own policy about foreigners withdraws their money in people's country.

[horrifiedx1]

Well, it's just that we can't easily compare bitcoin and gold, as a whole it is very different, for gold, you don't know the supply correctly but people have very high demand up to now, while bitcoin, I will say this as speculation and not suitable to be called an investment. Because of its bubble. And im sure every country has its own policy about foreigners withdraws their money in people's country.

gold has been trusted for generations, the government holds gold to print money, even though supply is unlimited, but prices tend to rise. while bitcoin may be due to new technology it needs recognition, and the government needs time to calculate profits and losses from all aspects, so as not to harm the country

[Reid]

Or this could be a perfect example on why normal people (not in politics) should be holding bitcoin instead of gold.
You will not be a target. The thing is they cannot. You are protected by your privacy. If you are found, you can just mix it and send to another address or just put it in a trading website then withdraw to a different address again.

It will happen. Those who saves too much commodity will be an apple of the eye by their own government.

[just_Alice]

Omg, are you seriously on Maduro's side here? He's literally doomed the country and what UK and US are trying to do is just save its remains. Citizens of country with the largest oil reserves are struggling from poverty. If he gets the money from selling oil or gold Venezuela will no longer have overseas assets and thus, eventually, won't have any value behind it. If he had Bitcoin not only he would lose most of his assets for now, but there would also be no one to stop him from illegitimate spending of all that's left.

[Dreamchaser21]

Even a government personality was unable to withdraw his asset on need. This shows unlike the power they hold, they are dependent on a third party source for all their financial support. Now the same is serving as a troublesome. This gets eliminated with the use of cryptocurrency. As the Op title describes more the bitcoin hold by governments more will be the security of the nation. Because on emergency the government cannot wait anymore.

Yes it can be a good for the government, but of course if the government holds a lot of bitcoin or any coin, if they withdraw it one time big time then we will see another dump of the market and normal people will suffer. I don’t like the idea of this one since government can control the market if something bad happen.

[deisik]

Omg, are you seriously on Maduro's side here? He's literally doomed the country and what UK and US are trying to do is just save its remains. Citizens of country with the largest oil reserves are struggling from poverty. If he gets the money from selling oil or gold Venezuela will no longer have overseas assets and thus, eventually, won't have any value behind it. If he had Bitcoin not only he would lose most of his assets for now, but there would also be no one to stop him from illegitimate spending of all that's left

This is not the politics board

But I still wholeheartedly agree with you. And that's why Bitcoin in the wrong hands can be a dangerous thing. As this case shows (I mean with London refusing to give back the Venezuelan gold to Maduro), dictators can be effectively dethroned by cutting them off of the financial support (it is just a matter of time), but with Bitcoin it will be a lot more difficult and will likely cause a lot more of collateral damage

[davinchi]

~snip

You are looking at it from a wrong angle

Why do you not ask yourself why he would have to cash out in the first place? He could just declare Bitcoin as a legal tender in Venezuela instead of Bolivar (i.e. official currency), and that would solve most if not all woes with hyperinflation in this country. If Bitcoin is too expensive for that purpose and not very efficient as a means of payment (which seems to be the case), he could also make Litecoin an official medium of exchange in addition to Bitcoin being legal tender. This couple would work just wonders together in curbing insane inflation rates in Venezuela

Wrong angle? Are you sure ? These people do not have food to eat, these people are starving to death, there is a huge "marudo diet" where all of a nation lost weight collectively because of the lack of food.

Now, you are trying to make bitcoin or litecoin or any coin their national money? Why do you think it matters what their coin is, they do not have any money, it doesn't matter if they use bolivar, petro, bitcoin,litecoin or gold it doesn't matter at all, they do not have money, let alone money they do not have FOOD to begin with, if they could gather even couple of bucks they will buy food with it, there is no monetary savings at all.

Maduro making bitcoin the legal currency in his country would not change a single thing for him, he still wouldn't be capable of spending bitcoin the way he wants, he has over 1.2 billion dollars in his gold account which means he would need to spend 1.2 billion dollar worth of bitcoin on Venezuela which they do not posses enough things that would collectively cost that much but even if it did they would sell that coins right back to market so they could get something to eat which would make the price of bitcoin fall. Hence that logic is corrupt and wouldn't work even for a day.

[wendiar19]

government and banks in some countries do not care about the price movements of bitcoin, they just want to see bitcoin fall like this, while bitcoin also cannot be controlled by banks or government so that makes bitcoin unable to get support from the government.

[Linkkoin]

If Maduro was holding Bitcoin instead of gold, specially gold outside of your borders, he wouldn't have had that little problem. Of course Maduro is probably too computer illiterate to get the thing done.

Only if the wallets will remain anonymous. But as you can track and freeze it, as proven recently after cryptopia hack - the effect could be similar.