Total BS: "Bitcoin cannot be controlled by governments"

[PepeLapiu]

According to my understanding of international law, the use of force against another state is prohibited except in very specific situations. For this reason, the events in Venezuela are legitimate because the US and Venezuela have long maintained close diplomatic and economic ties as significant oil trading partners. They will undoubtedly take action to safeguard their interests, particularly if regard to oil.

That doesn't make any sense. You say that use of force against an other nation is prohibited, spare some exceptions. And you don't enumerate those exceptions. Than you go on to say that aggression against Venuzuela was legitimate because of those exceptions you haven't named.

So what are those exceptions? Asking for a friend....

[Smartprofit]

I mentioned that in 2021, that is, five years ago, the price of Bitcoin was $69,000. Five years ago, there was no President Donald Trump, no spot Bitcoin ETFs, no Michael Saylor ambitions, no BlackRock acquisitions... In other words, there was no American investment in Bitcoin, and yet the price was $69,000. And that's a fact. Let's adjust the price for inflation over five years, and we'll see what the price would be today without the intervention of American institutional investors. I'm confident the price would be over $100,000.

That was then. Whatever forces that were propping up the price to $69k back then are long gone now, obviously. Now the price is based on a mainstream connection to US and western financial markets. Perhaps the whales all sold for $69k and the western financial markets absorbed it all. Regardless, now the thing that supports Bitcoin's price is access to these markets, not... whatever was around 5 years ago.

Last week Michael Saylor sold a few hundred BTC and the price plummeted by 15%. A US law crafted by lobbyists from the biggest Bitcoin brokers and players and backed by Saylor, Musk, and other big influencers would be a thousand times bigger event.

And meanwhile, the US-backed Bitcoin network would natively handle every single transaction on the planet, replacing credit cards and payment apps. Bitcoin would suddenly be used by almost everybody, every day. That's what changing the architecture would do, so it's not like this fork would be universally hated like everybody seems to think it would.

But this is all just an example. The OP's point was that Bitcoin can be controlled by governments, and it can be if they actually wanted to. They haven't wanted to so far, which is the only reason they haven't done something like this.

No, in my opinion, these forces supporting Bitcoin haven't disappeared! 🙋

It's just that American institutional players are holding Bitcoin's price back with their actions... Incidentally, the same thing happened at the end of 2017, when large American financial companies created a financial instrument called Bitcoin futures. A bear market began immediately afterward. And throughout this bear market, these large financial companies earned fiat currency on the gradual decline in Bitcoin's price. In other words, they literally sucked liquidity and capitalization out of Bitcoin (and other cryptocurrencies).

The same thing is happening now... Bitcoin's price has dropped, and Donald Trump's family has become rich. The head of BlackRock and Michael Saylor aren't exactly broke either.

I believe that large American institutional players don't control Bitcoin, but they are holding it back. How are they doing this? By creating derivatives.  Derivatives can be considered "paper Bitcoin," that is, an artificial inflated supply. For example, if it weren't for Michael Saylor, pension funds would have eventually lobbied to include real Bitcoin in their assets. As it is, they're buying a surrogate (shares in Michael Saylor's company).

This is precisely why American institutional players don't want to create any Bitcoin fork. They're parasites. It's as if tapeworms wanted to create a quantum computer. That can't happen! Tapworms don't work that way. They simply see a living organism, inhabit it, and suck out all its vitality.

[SilverCryptoBullet]

I believe that large American institutional players don't control Bitcoin, but they are holding it back. How are they doing this? By creating derivatives.  Derivatives can be considered "paper Bitcoin," that is, an artificial inflated supply. For example, if it weren't for Michael Saylor, pension funds would have eventually lobbied to include real Bitcoin in their assets. As it is, they're buying a surrogate (shares in Michael Saylor's company).

Not only American institutional players (investors) but also investors with other nationalities are all unable to control Bitcoin. Because Bitcoin is decentralized by its network from mining hashrates to Bitcoin full nodes. In addition, there is no smart institutional investors want to control Bitcoin because it only damages Bitcoin value and price. If they have huge capital that can be used to dominate Bitcoin mining hashrates, they can use it for other more meaningful actions like accumulating and hold bitcoin, witnessing Bitcoin growth and getting very good profit.

Centralizing Bitcoin mining hashrate, attacking Bitcoin network only makes bitcoins they own become smaller in value, and surely no smart institutional investors will do that.

This is precisely why American institutional players don't want to create any Bitcoin fork.

Bitcoin forks are created by scammers.
How Many Bitcoin Forks Are There? You will be surprised!!!

[abaeze]

Since governments can control exchanges, ETFs, and large investment funds, as well as impose taxes and regulatory laws, they can actually influence the price, liquidity, and usage of Bitcoin by the general public. But that doesn’t mean that governments can completely control the Bitcoin network and nodes that are spread across the world. Because its source code is open-source, anyone can run their own nodes. So no single company or government can shut down the network. Many say that China tried to do this but failed.

Ultimately, I believe that it is much easier for governments to limit the use of Bitcoin than to destroy it. So it is clear that even if governments cannot completely take over Layer 1, they can strongly influence the economic environment of Bitcoin through Layer 2, i.e. exchanges, ETFs, and the legal framework.

[legiteum]

No, in my opinion, these forces supporting Bitcoin haven't disappeared! 🙋

Disappeared? No. But they are mostly gone, in terms of the money. Keep in mind Bitcoin mostly isn't used for anything these days besides investment. It's not a "utility coin" in any way.

This is precisely why American institutional players don't want to create any Bitcoin fork. They're parasites. It's as if tapeworms wanted to create a quantum computer. That can't happen! Tapworms don't work that way. They simply see a living organism, inhabit it, and suck out all its vitality.

Maybe they don't want to right now, I don't know. The OP is not about what people--and thus politicians, and thus the US government--want to do right right this moment, it's about the theoretical possibility of government control over Bitcoin. The OP's point was that the US government can do whatever it wants to do with Bitcoin--and it hasn't done much since there is no political will do so.

But Bitcoin isn't a magic codebase that allows humans to consistently evade the reach of governments while still enjoying the benefit of being connected to the mainstream of the financial system that gives BTC it's $trillion in market cap.

So it is clear that even if governments cannot completely take over Layer 1, they can strongly influence the economic environment of Bitcoin through Layer 2, i.e. exchanges, ETFs, and the legal framework.

Their control of layer 2 gives them the power to influence liquidity, which in turn gives them the power to control the price--which is all anybody cares about with Bitcoin.

A law passed in US Congress couldn't stop anybody from using whatever pile of code they want to use (Monero is a good example of this), but they can certainly drive it underground, which would drop the price of BTC down 99% at least.

And since people have their company's treasury and/or their personal life savings tied up in Bitcoin, they will do whatever Congress wants them to do in order to remain whole.

Bitcoin made a "deal with the devil" when it connected to the mainstream US/western financial system....

[BlackHatCoiner]

The illegal fork of the former Bitcoin codebase we're talking about here would certainly be tradable, but it would be vastly less liquid, and thus far less valuable.

The US government already controls the on and off ramps of most Bitcoin liquidity. I don't understand what the benefit is with attempting to "force" Bitcoin investors into buying a fork that might end up to be just another worthless one. From the government's perspective, since it surveils most high value Bitcoin transactions already, it stems to lose a lot more by meddling with the protocol, even if it were feasible in the first place. Changing the protocol is one of the most likely ways that Bitcoin fails, and if it does, the government loses the declared capital appreciation from all those bitcoin holdings.

[legiteum]

The illegal fork of the former Bitcoin codebase we're talking about here would certainly be tradable, but it would be vastly less liquid, and thus far less valuable.

The US government already controls the on and off ramps of most Bitcoin liquidity. I don't understand what the benefit is with attempting to "force" Bitcoin investors into buying a fork that might end up to be just another worthless one. From the government's perspective, since it surveils most high value Bitcoin transactions already, it stems to lose a lot more by meddling with the protocol, even if it were feasible in the first place. Changing the protocol is one of the most likely ways that Bitcoin fails, and if it does, the government loses the declared capital appreciation from all those bitcoin holdings.

Like I keep saying, the point of the OP is not why a government like the USA would vote to change Bitcoin, or whether they might do that soon, but rather that it's completely possible and even plausible. There's nothing magic about Bitcoin that places it above the reach of laws.

All that said, to paint a possible scenario...

Imagine if the Major Players who collectively own a huge chunk of BTC and/or have custody of most of BTC figured out a scheme that would benefit themselves, and it required major changes to the Bitcoin core codebase. They would do what they've already been doing, and lobby Congress to pass a law saying that their proposed fork is "the real Bitcoin" and everything else is a fraud, and will be prosecuted as such.

And I've brought up the specific example of changing the architecture to a smaller, trusted set of nodes along with eliminating PoW, which would make the system scalable to handle all of the world's daily payments natively, which could vastly (as in, 100,000x) spread the usage of Bitcoin because everybody could use it for absolutely everything, not just investment. Hence the whales could believe their BTC would greatly increase in price, yielding them billions in gains--far outweighing the investment they made in political contributions. (Again, this is just a scenario that the Whales etc. might believe in, I'm not going to debate whether this would really expand BTC or not, etc.).

The combination of major holders shifting over, plus laws in (at least) the USA and probably lots of other places where the Whales would do the same lobbying, would instantly turn the new fork into the Bitcoin almost everybody uses, and the original fork akin to Monero.

Again, I'm not saying this will happen (although the more I write this the more likely it sounds!), but the point is that it absolutely could happen, so let us please stop saying, "Bitcoin cannot be controlled by governments" because it absolutely can be.

[lionheart78]

All that said, to paint a possible scenario...

Imagine if the Major Players who collectively own a huge chunk of BTC and/or have custody of most of BTC figured out a scheme that would benefit themselves, and it required major changes to the Bitcoin core codebase. They would do what they've already been doing, and lobby Congress to pass a law saying that their proposed fork is "the real Bitcoin" and everything else is a fraud, and will be prosecuted as such.

Does this not show how corrupt or evil this country is?  And is the world too dumb to believe such lie, when every country can verify themselves which one is the original and which one is the fork one?  Oh and how can a single country prosecute every citizen of the world who uses the real Bitcoin?

You have a good case scenario, but its weakness is that it is limited to appearing in a single dictatorship country where the government's implementation, regardless of whether it is reasonable or not, is ironclad and needs to be followed, no question asked.  

Again, I'm not saying this will happen (although the more I write this the more likely it sounds!), but the point is that it absolutely could happen, so let us please stop saying, "Bitcoin cannot be controlled by governments" because it absolutely can be.

Well, the future is a possibility, but there is only one certainty: change.  Whether Bitcoin can be controlled by the government or not lies in the future, as for now, it is not controlled by the government, and as for the discussion, Bitcoin to be controlled by the government is not certain.