What if the US Govt. buys circulating Bitcoin Supply and $ is backed by $BTC ?

[Leviathan.007]

People don't really care about what Hillary Clinton says or even who she is, she wanted about bitcoin and crypto that's because she knows she and the other political men and women won't have much power to monitor and control people funds when people start to use a decentralized system such as bitcoin so she warns about it. About the US government buying many bitcoin and making dollars backed by bitcoin I would say this can be very much unreal because bitcoin is accepted as an asset in the world but they usually use other assets such as gold for that kinda purpose.

[1714891961]

1714891961

[1714891961]

1714891961

[1714891961]

1714891961

[hatshepsut93]

Hah! Yeah, every time someone talks about defi and finance detaching itself from traditional finance I just wonder which world they live in. Do people on defi forget newcomers still need a way to buy crypto to use defi, or that they also still need a link to traditional finance to realise their gains?

Never mind that the products and services of defi aren't even able to substitute traditional finance, let alone displace it... Defi people largely ignore the fact that those most in need of finance are less able to access defi services than traditional ones. Be it due to a lack of tools or even the technological infrastructure. Makes my eyes roll up every time someone says defi is for the people and the masses and the unbanked when clearly the only ones able to use defi are crypto able and those most benefiting are the wealthy.

People who put their money into some yield farming smart contracts need to convince themselves and others that they made a smart choice, so they keep telling everyone that DeFi the future. It's the same story as with ICO, people were telling that IPO and other funding methods are now obsolete and everyone will be launching an ICO. Fast forward, ICO is synonymous with "scam" today. I'm sure a similar fate awaits DeFi, with all the hacks and rugpulls that happen all the time.

[BlackHatCoiner]

Do you know what's the beauty of fiat money printing? Value doesn't come from a printer (unless you're selling books), so no matter how much they print, the total value can't go up!

And do you know what's the tricky part of fiat money? That what you said is an illusion in the short term.

Yes, in the long term you can't “print” value as the new money will enter the circulation and prices will rise due to supply & demand, but until they enter the market (which is the short term), they are regular, non-changed-in-value money. So, if they printed/added another billion dollars in their bank balance, they could accumulate more BTC which would obviously rise the price.

So while the total value can't go up, they can deceive the exchange by trading a currency that is guaranteed to lose value afterwards.

[LoyceV]

Do you know what's the beauty of fiat money printing? Value doesn't come from a printer (unless you're selling books), so no matter how much they print, the total value can't go up!

And do you know what's the tricky part of fiat money? That what you said is an illusion in the short term.

I forgot to add "" around "beauty".

Yes, in the long term you can't “print” value as the new money will enter the circulation and prices will rise due to supply & demand, but until they enter the market (which is the short term), they are regular, non-changed-in-value money. So, if they printed/added another billion dollars in their bank balance, they could accumulate more BTC which would obviously rise the price.

Money printing is basically transfering purchasing power from anyone to the guy controlling the printer. Why would anyone work for $8 per hour if someone else can just create ten billion times that amount by pressing a button?

[BlackHatCoiner]

Why would anyone work for $8 per hour if someone else can just create ten billion times that amount by pressing a button?

You tell me... Probably due to lack of financial intelligence. As I've quoted before;

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

However, by the way you've responded I can't understand if you disagree with me or being further informative. What I said is that this transfer of purchasing power happens in the long term, when the new money is included into the market's circulation. Until then, the freshly-printed banknotes represent the same value with the rest.

[btctaipei]

Hillary Clinton is alarmed by the rise of BTC.

...
So, the US Govt. can easily print out $1 Trillion Dollars which is not really all that much when you compare it to gold and then capture the entire circulating supply and use it as a reserve.

Then they can pretty much make dollar reign in supreme again by backing $BTC to the dollar just like how they backed it to the gold standard in the past.

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream. Major institutions are already starting to use BTC as a hedge. Only a matter of times before the really Big Boys will step in. This way the US could actually control the Global Financial System.

If USA rush to actually do this it would be horrible for BTC because it will cause huge surge in bitcoin on-chain transactions.  Any move by USA to actually adopt BTC as legal tender would most likely crush bitcoin network and likely be successfully to bring bitcoin network to an halt; unless all merchants in United States are require to run their own lightening node to accept payment; which obviously can be done by passing new infrastructure bill.

[LoyceV]

I can't understand if you disagree with me

We agree.

Let's put it this way: If you have $100 and I have a $100 bill printer, who do you think is going to get hungry when a bread costs $200?
Fiat is based on eternal debt, and I don't like it.

[paxmao]

Oh dear, the US already left the gold standard in Brenton Woods and I do not see any Government (other than Salvador) wanting to use a deflationary asset to back their own coins, as they would not be able to cover up their shit and win elections printing money with "quantitative easing". Now that I think of it, El Salvador is not backing its currency with bitcoin, jus making it legal tender.

In fact, using bitcoin as collateral is even worse for that purpose than using gold. It would make the dollar automatically deflationary and that has terrible implications for the economy beyond mere politics.

The great thing about bitcoin is that is already giving you the ability to opt-out. Individually, without having to ask "dad".

https://www.investopedia.com/ask/answers/040815/how-does-deflation-impact-consumers.asp#:~:text=Deflation%20Creates%20Higher%20Rates%20of%20Unemployment,-At%20the%20beginning&text=Eventually%2C%20these%20falling%20prices%20begin,declining%20and%20consumer%20confidence%20decreasing.

Deflation Creates Higher Rates of Unemployment
...


Debt Increases Relative to Household Budgets
...
...
Deflationary Periods Are Dangerous for the Economy
...

[BlackHatCoiner]

[...]

And that is just simplified! The worst part of the current monetary system is the federal reserve lending. Once I deposit the hundred dollar bill on my bank, I will have inflated the currency when another person requests a loan. And as of 2020, that the reserve requirement went to 0% (!), the banks can ultimately inflate the currency as long as there's demand for new loans.

And among this fraudulent business, there are the interests! Now how can you not like Bitcoin?

[StarKay]

My point is we could see major Govt. could rush in and buy as much BTC as possible if it becomes mainstream. Major institutions are already starting to use BTC as a hedge. Only a matter of times before the really Big Boys will step in. This way the US could actually control the Global Financial System.

If the US government wanted to do that, it would have been done a long time ago before Bitcoin huge growth in price and acceptability.
Personally I think the USG actually allowed Bitcoin to grow for their own selfish reasons and the moment Bitcoin becomes a threat, they will put Bitcoin in its place.
Bitcoin might just be a tool of the US government.

[pooya87]

Personally I think the USG actually allowed Bitcoin to grow for their own selfish reasons and the moment Bitcoin becomes a threat, they will put Bitcoin in its place.

Such a politician-like thing to say. When they fail to do something they wanted to and things go the other way they didn't want, they immediately change position and say "we wanted that other thing to happen"

The thing about Peer to Peer networks is that nobody can do anything to them. When there is monetary incentive involved and the said network grows globally then it also becomes impossible for anyone to do anything to that network.

Impotence and inaction are similar yet very different.

[LoyceV]

Something else (re)occurred to me: let's say government wants to use Bitcoin, and let's say Central Banks get involved. What's stopping a large government to create 100 million Bitcoin in debt? They first abandoned the gold standard and then abandoned paper money. They don't even bother printing the banknotes anymore.
So if they start using Bitcoin, they'll create their own internal accounting system, and there's nothing stopping them from turning it into fractional reserve Bitcoin. No more on-chain settlements, no more physical ownership, it will just be like "paper gold". And in a way it's started already (by private corporations): "Wrapped Bitcoin" has nothing to do with Bitcoin, and yet people use it. It's not that hard to imagine they'll sell more Wrapped Bitcoin than the Bitcoin they hold, just like Tether sells more than the dollars they own.
The current government debts will never be paid back, and as long as they do the same with their 100 million "Bitcoin" debt, most people will just accept it.

[Pmalek]

Just like El Salvador, US could also try and capture the entire BTC circulating supply.

I am not sure where you got that idea from. El Salvador never attempted to purchase the entire circulating supply. How would that even work? The entire supply is not for sale. How do you purchase the coins in my cold wallet and thousands of other private wallets that people have scatter all around the world? The number of bitcoins on exchanges have never been as low as they have in recent months.  

We never had "One Currency" through out the world.

And we aren't going to have that with Bitcoin either.  

The company of the richest person on earth has more than a billion in Bitcoin. Some people on Wall Street have accumulated Bitcoin.

Who knows what that manipulator owns? Didn't he first say that Tesla didn't sell any of its bitcoin, but later claimed that they only sold 10% to check how much of an affect it would have on the market? More precisely, he wanted to show that it didn't have big consequences.

The thing about Peer to Peer networks is that nobody can do anything to them.

Not directly to the networks. But they can increase taxes on Bitcoin. They can make POW mining illegal. Sweden is already suggesting that to the EU. They can make it illegal to use certain exchanges, etc. There are ways for a country to hurt it, but not to stop it entirely.  

[pooya87]

Something else (re)occurred to me: let's say government wants to use Bitcoin, and let's say Central Banks get involved. What's stopping a large government to create 100 million Bitcoin in debt? They first abandoned the gold standard and then abandoned paper money. They don't even bother printing the banknotes anymore.
So if they start using Bitcoin, they'll create their own internal accounting system, and there's nothing stopping them from turning it into fractional reserve Bitcoin. No more on-chain settlements, no more physical ownership, it will just be like "paper gold". And in a way it's started already (by private corporations): "Wrapped Bitcoin" has nothing to do with Bitcoin, and yet people use it. It's not that hard to imagine they'll sell more Wrapped Bitcoin than the Bitcoin they hold, just like Tether sells more than the dollars they own.
The current government debts will never be paid back, and as long as they do the same with their 100 million "Bitcoin" debt, most people will just accept it.

I don't think that could affect bitcoin in any meaningful or long term way.
The benefit of bitcoin is its transparency and how easy it is to store on your own. Take gold for example, it is not easy to stock up millions of dollars worth of gold at home without spending a ton of money on security which may not be effective enough. Using it is also extremely hard since you can't just cut the gold bar into tiny pieces and sell those.

With bitcoin you can create a practically free wallet with a piece of paper (encrypted of course) or a cheap hardware wallet and store from 1 satosho to millions of bitcoin, all with a super high security.

Besides we already have a ton of wrapped bitcoins and fake bitcoins (forkcoins) that attempted doing the same and failed. The only people who were ever interested in garbage like this have been short term market gamblers.

[buwaytress]

People who put their money into some yield farming smart contracts need to convince themselves and others that they made a smart choice, so they keep telling everyone that DeFi the future. It's the same story as with ICO, people were telling that IPO and other funding methods are now obsolete and everyone will be launching an ICO. Fast forward, ICO is synonymous with "scam" today. I'm sure a similar fate awaits DeFi, with all the hacks and rugpulls that happen all the time.

A most excellent point. They're a lot of the same guys too, I suspect. Telling everyone who cared to listen that IPOs were outdated and ICOs were the way. Now they're telling people on public transport ads to invest in Floki, and seriously telling kids not to waste time with 0% interest bank accounts and putting their money to work in high-yield Defi with XXX% ROI.

Because blockchain and "decentralization" makes interest sustainable...

[BlackHatCoiner]

Something else (re)occurred to me [...]

The bet is that people won't need a third party to transact when it comes to bitcoin. I won't exaggerate it with gold. Take for instance, cash, banknotes. You can't send me your hundred dollar bill, unless we make an arrangement, which is definitely impractical if we're far from each other. Due to that, we need a third party.

In this case, it's the bank. The bank abuses this impracticality and creates debt. If the people suddenly stopped depositing money, the global debt would start reducing.

That being said;

So if they start using Bitcoin, they'll create their own internal accounting system, and there's nothing stopping them from turning it into fractional reserve Bitcoin.

There is. Non-custodial wallets.