Can the government acquire all bitcoins either by seizure or purchase?

[Queentoshi]

This headline from the news is what has been making me think, Israel seizes cryptocurrency said to be used to finance Hezbollah and Iran's Revolutionary Guard.

The government has struggled hard to make sure that bitcoin does not develop and grow, they have made several policies and even created their own CBDC as a competition all to suffocate bitcoins growth. It is not impossible that they have not thought about seizing all the bitcoins so they can just hold it until we forget about bitcoins. So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

[Nwada001]

is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

No, they can't; the government can't seize what they don't have access to unless they hold the citizen, and they are the ones who gave the key phrase to the government.
 
Do you know why people are advised to make use of a self-custodial wallet, aside from security and privacy reasons? As a result of this, they don't have any way to take over what they can't access. Even without a hardware wallet, self-custodial mobile and window wallets alone can't be taken control of without the owner giving access to the wallet.
 
Even if they succeed in arresting bitcoin owners, if they in any way identify any of its citizens who own it, they can't still forcefully take control over the wallet unless there is some advanced technology that they plan to use in doing that, and I still don't see any possibility in that.

[Zaguru12]

So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

The government can only freeze bitcoin stored on centralized exchanges because most of them are under there regulations. But bitcoins stored on wallet cannot be seized or the account frozen, the only possible way is to trace the person and force the person to submit their wallet seed phrase or private keys. Apart from this two the decentralized nature of bitcoin can never allow any third party to have access to your wallet without the seed or keys.

So the only way is through tracing you and you can also minimize the risk of been Traced by using an HD wallet that generates new addresses for every new transaction. And you need to make sure to use the new address to receive new transactions, as such you can’t have all transactions linked to you. The other way is the use of bitcoin mixers. This two create almost total anonymity that can be a bit hard for the government to trace you

[BitcoinPanther]

The possibility of the government to acquire all Bitcoin by seizure or purchase is impossible.  There are already inaccessible wallet address that holds Bitcoin due to lost keys.  Aside from this, there will always a Bitcoin holder that will continue to hodl Bitcoin.  Aside from that, the government will only seize Bitcoin if it is used for illegal means and/or use to support terrorists and the government will not seize the Bitcoin used in legit companies.

[Odohu]

So far as the fund is passing through CEX, it is possible to seize them. To cash out cryptocurrency, you need KYC through which the identity of the user is known. It is just a matter of running background check on the user to check their activities and affiliations. 

As soon as the details about the user are gotten,  Isreal through the West will act through the exchanges since they control the global system, no body want to be in their bad book.

[Rikafip]

So far as the fund is passing through CEX, it is possible to seize them. To cash out cryptocurrency, you need KYC through which the identity of the user is known. It is just a matter of running background check on the user to check their activities and affiliations. 

And what if I lost all my bitcoins in a boating accident? How will they be able to retrieve those? 

[Broadanbig]

This question of yours can be answered in a yes and no response.

YES being the fact that the government can take over bitcoin assets through centralized third party exchange if such case emanates. Since you have your bitcoin with the exchange, it does not belong to you because you have no access to the seed or key phrase holding the asset. So you can not in any way say you own it and if the government decides to act funny, all the assets with that exchange is gone as long as there is a tag attached to the exchange or your account with them.  

NO being the fact that in this situation you have control over your bitcoin asset and no one knows who owns the wallet address and no one can trace to see where or see the end of it all to know between the parties that did the transaction to act by taking over the asset. You own your keys and you have your asset under your watch so how does the government know who owns the wallet when there is no link to trace and know the owner of such wallet.

In all, there is possibility that your question is very much accurate because third parties are porous and are the arm of government in crypto so the government through them can do whatever they want since they have access to kyc of every account holder with them.

[Winterfrost]

You have often heard the saying not your keys not your coins. This means that if don't have the keys to your asset then you don't have control of your coins. Without the private keys of your wallet you cant access your Bitcoins without seeking permission form a third party that might eventually deny you your request. But if you have full possession of your keys the only mean someone could take them form you is by physically ripping you off of it, as long as you have not done any mistake top save it digitally or share it to someone (a friend, family or someone who you claim to love.)

When you store your Bitcoin in a wallet you are in full control of, there is no way the government can intimated you or there is no law written that stand that you have to open your phone or laptop and share you keys to the government. That is trespassing personal property. However if you store your Bitcoin in a company, exchange the government can exert pressure on them to gain f=control over the cryptocurrency  owned by the government citizens.
One faithful morning you could wake up and everything you worked hard for its gone.

[Coyster]

Bitcoins that are in addresses on centralized platforms can be seized, it has been said on this forum for a very long time that if it is not your keys, it isn't your coins, the government can issue an order for your Bitcoins to be seized if you have it under a centralized control. If your coins are in a non-custodial wallet, they cannot be seized. As for the government purchasing all Bitcoins, well, someone has to sell it to them, and if you are willing to sell your coins, there's definitely going to be a buyer and it can be anybody or any institution.

[Faisal2202]

This headline from the news is what has been making me think, Israel seizes cryptocurrency said to be used to finance Hezbollah and Iran's Revolutionary Guard.

I read this news, and it was biased too, as when a war starts, many news outlets, take sides, (the reason could be anything) but when the news outlets take sides, they only show or write the side of their story and ignore the others. In this situation, we should read those news, which are not biased and are neutral. And, the topic you started, must be out of curiosity about how Israel seizes the cryptocurrency, please keep in mind that, they seize the cryptocurrency of some wallet or some platform. They just can't seize the assets of a person. And they are not the only ones to seize the assets, back in time, when bankruptcies and scams occurred, the US and many other countries also seized many funds. Examples are the silk road etc.

The government has struggled hard to make sure that bitcoin does not develop and grow, they have made several policies and even created their own CBDC as a competition all to suffocate bitcoins growth. It is not impossible that they have not thought about seizing all the bitcoins so they can just hold it until we forget about bitcoins. So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

You are right, those governments don't want BTC to grow, but they are not going to seize all the funds and I don't think they can do it, because they don't own the blockchain, because Blockchain is distributed in all over the world, it is not some central or distributed servers which can be controlled by mother server.

We are talking about BTC blockchain, which is secure from any single entity's control. And They might have thought to seize the funds but they can only do that, by going home to home, person to person, and checking each and everyone, for their seed phrases and searching out the whole house, etc. etc. whatever method they will use, but a person can, of course, trick them and save the seed phrases, even by remembering them. I hope you are getting my point. And a government cannot just seize the assets of there locals. I didn't heard of any event like this.

[BIT-BENDER]

Yes this can happen if everyone holding Bitcoin decide that they would sell to the government then that is the only way the government can acquire all the whole Bitcoin
Bitcoin is decentralized so the government can order people to give them their Bitcoin that why some people choose crypto-currency over the traditional financial where the government can freeze someone account which is super unfair.

[Renampun]

This headline from the news is what has been making me think, Israel seizes cryptocurrency said to be used to finance Hezbollah and Iran's Revolutionary Guard.

The government has struggled hard to make sure that bitcoin does not develop and grow, they have made several policies and even created their own CBDC as a competition all to suffocate bitcoins growth. It is not impossible that they have not thought about seizing all the bitcoins so they can just hold it until we forget about bitcoins. So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

The Israeli government only arrested the person responsible for Hizzbullah's crypto wallet but they couldn't stop all the bitcoins or cryptocurrencies that came in as a form of donation for the war fund, bitcoin is a decentralized asset, no government in the world controls it, bitcoin is not like altcoins whose amount and value can be easily manipulated, there is no need to be afraid to transact and donate via cryptocurrency.

[HelliumZ]

It is possible for a government to confiscate bitcoins but it is never possible to confiscate all bitcoins. It is never possible for the government to know the amount of Bitcoin held by the citizens of a country and the security code or password or phase of each of their wallets. However, a country's government can confiscate all bitcoins held by a particular organization or individual. As the American government seized all the bitcoins confiscated from the Silk Road.

[bhadz]

So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

I am sure that they know and they have the idea that these are the only ways that they can take someone's Bitcoin. They have the power to do that if they're in the government to just confiscate and take away people's phrases and seeds in a forced manner. And they're also aware that many won't obey that rule because someone can remain lowkey and low profile that it seems that he's an idiot and doesn't understand a thing or two about Bitcoin. That's why it's unlikely that they can seize all people's Bitcoin if they ever get to have an order to seize all people's Bitcoin. I guess that these topics are popping up due to the war and all of the news that has come out. But remember folks, you can play dead and know nothing about Bitcoin if someone asks you and this is the importance of remaining anonymous don't talk a lot in public that you know that much about cryptocurrencies. Yes, we're advocates and educate people about Bitcoin but we should do it in a proper venue because who knows if someone is watching out like the FEDs and has got plans like these topics that have been brought up.

[mk4]

they have made several policies and even created their own CBDC as a competition all to suffocate bitcoins growth.

CBDCs aren't even a competitor to bitcoin.

So I am thinking, apart from physically confiscating hardware wallets and apprehending bitcoin holders to submit their seed phrase, is it possible that the government can seize bitcoins belonging to citizens even though it is a decentralized system?

Think about it yourself — how theoretically viable is it for the authorities to literally go from house to house and search every single person's home for a hardware wallet or a bitcoin wallet installed on every single person's computer?

[SquirrelJulietGarden]

The government has struggled hard to make sure that bitcoin does not develop and grow, they have made several policies and even created their own CBDC as a competition all to suffocate bitcoins growth.

They wasted golden time to stop it when Bitcoin network has very low hash rate and weak but now after 14 years, with its very decentralized and powerful network, how will governments succeed to break it down?

It's impossible.

It is not impossible that they have not thought about seizing all the bitcoins so they can just hold it until we forget about bitcoins.

They can not seize your coins if they won't arrest you and get your private keys. Those seized coins are from criminals who made crimes and were arrested by governments in their nations. If you don't make crimes, don't get arrested, your coins will be always yours, no seizure.

Governments can not buy all coins in circulating supply if not all bitcoiners sell their coins to governments. Do you think it is realistic for governments to buy all of coins in circulation?

[LogitechMouse]

Yes this can happen if everyone holding Bitcoin decide that they would sell to the government then that is the only way the government can acquire all the whole Bitcoin
Bitcoin is decentralized so the government can order people to give them their Bitcoin that why some people choose crypto-currency over the traditional financial where the government can freeze someone account which is super unfair.

The million-dollar question is that, how realistic this scenario can happen? Do you think that this can happen? Do you think that everyone will really sell their Bitcoin to the government?

Technically speaking, yes they can sell it to the government, but realistically speaking, no it is almost impossible knowing that not all Bitcoin holders are willing to sell their Bitcoin especially with the government. This kind of scenario are kind of impossible to happen - unless people around the world will really sell, but what are the chances of it to happen? 0%.
The government can't acquire something that they didn't create at first place, and that is Bitcoins, so it's impossible. I can't imagine these authorities interviewing every single person around the world asking if they are holding Bitcoins, and if they are, they will sell it to them. Kind of funny TBH.

[zaim7413]

One way to recover a wallet is only by using a phrase, the government will never be able to access the targeted wallet as long as it doesn't have a phrase, unless they take the individual hostage and then ask for the password by force. Assets stored in a Wallet are not the same as Fiat money stored in a Bank, the government can easily take over a bank account but cannot enter a Bitcoin wallet as long as it doesn't have a phrase. Asset security will always be maintained as long as you can control the key, it is also not easy for the government to identify who owns the wallet as long as it is not connected to KYC.

[Don Pedro Dinero]

Many people, like the OP, do not understand the effect of a huge demand that would like to buy everything. I will leave aside the question of confiscation, which I understand has already been correctly answered.

If some government wanted to buy all the bitcoins in the world, the price would go into the stratosphere. Surely the first ones it bought would be bought at the levels it is now but demand would so outstrip supply that the price rise is even hard to calculate, but I think the dream $1,000,000 per bitcoin would come pretty quickly, and there would always be people who would not sell their bitcoins, who have them in their HW for HODLing in the very long term.

It is similar to when a billionaire has a billion dollars worth of shares in a company. If he wanted to sell them all at once, he would cause the stock to fall so much that he would end up getting much less, if anything, because he could even bankrupt it with that move.

[Porfirii]

Many people, like the OP, do not understand the effect of a huge demand that would like to buy everything. I will leave aside the question of confiscation, which I understand has already been correctly answered.

If some government wanted to buy all the bitcoins in the world, the price would go into the stratosphere. Surely the first ones it bought would be bought at the levels it is now but demand would so outstrip supply that the price rise is even hard to calculate, but I think the dream $1,000,000 per bitcoin would come pretty quickly, and there would always be people who would not sell their bitcoins, who have them in their HW for HODLing in the very long term.

It is similar to when a billionaire has a billion dollars worth of shares in a company. If he wanted to sell them all at once, he would cause the stock to fall so much that he would end up getting much less, if anything, because he could even bankrupt it with that move.

I was just wondering something like that. As others mentioned, it is clear that it is technically impossible to access all the (remaining) Bitcoins. But another question has to do with the affordability (even if the price didn't go nuts like you mentioned with the 1M example).

I thought that the market cap was closer to gold's, but I've just checked it and it is 26 times smaller. It is much closer to silver's (only 2.5 times smaller: wait for the bull run). With a capitalisation of 500B, more or less Israel's GDP, it would be expensive, but still affordable, for the main economic powers (it would be, for example, 1.5 times the amount allocated to the EU's Next Generation program). But I don't think that it would be politically justifiable, in any case.