Total BS: "Bitcoin cannot be controlled by governments"

[d5000]

I'm still not sure what that means. Can you give me an example where I "don't" have total control over my savings held in various stocks and ETFs in my brokerage account, but I "do" have "total control" over Bitcoin in my brokerage account? A tangible example?

You can hold Bitcoin without a brokerage account, with a brokerage account it indeed becomes pointless when you consider this advantage (no intermediary) only.

Okay, but how exactly would Bitcoin help you there? In order to gain any benefit you'd need to take your entire life off-grid.

No. If they detect you're an opposition supporter, they could for example order your bank to freeze your account. Just to scare you, because killing all opposition supporters is not rational for them. Dictatorships have used these "scare" tactics for decades if not centuries. The only dictator that tried to kill all oppositionals was Pol Pot if I'm not incorrect (and North Korea is at least imprisoning a lot of them, but that's also an extreme example).

Your Bitcoin account is unaffected. They can't take it away if you're careful. And if you are cut from the Internet and mobile provider too, then you can still use local open WLANs or, in big cities, often mesh networks.

The best remedy against totalitarianism is to... vote against totalitarianism.

It's the security that your money is not affected by any government action that matters (outside of variants of the $5 wrench attack, like torturing you to find out your keys, but for that, they must know you have Bitcoin/crypto).

High Bitcoin ownership can also help to pressure a government which is moving into an authoritarian direction. Most dictatorships are not completely totalitarian (The Economist's Democracy Index for example shows a lot of "hybrid regimes"). In South America for example you are often subject to pressure if you live in certain provinces with a "caudillo" structure. They may already threaten to call your bank even if you're formally in a democracy (and of course could go to the High Courts, but the idea is again ... to scare you so you don't do that).

If a high percentage of the population has Bitcoin, the scare tactics of such a government become less ineffective. And then they may become more willing to move into a "benevolent" direction.

If they outlawed Bitcoin, for instance, the value would drop by 99% or more.

Most governments do not have that power. Again, not even China was capable of a catastrophic crash, and China is clearly the #2 of the world and may soon be #1 just by its population weight.

L2's are not Bitcoin. They are L2s. They introduce risk and friction that basically makes it pointless to have the first layer.

That's a bit of a shallow and black-and-white answer. I've already written that the most risk in Ark is that you lose access for some days (depending on the configuration). They can't steal your money (like other L2s like Liquid in theory could).

Bitcoin's price structure today is entirely dependent on the mainstream financial infrastructure that the US and its allies provide.

I would agree if you take out the "entirely". It is obvious that any legal action against Bitcoin in the US would lead to a dip. The question is if it's a 20% dip, a temporary 50% dip (like after the China ban) followed by a recomposition, or a 90% unrecoverable crash like you say. I'd go for a 50-70% dip which is recovered in a few years.

But the scenario with a pro-government fork you outlined would crash both the government fork and the real Bitcoin, and that's why Coinbase y Cia. would never move in that direction.

[Ambatman]

Sure, until somebody with a gun comes along and steals it from you. Then you have zero control because your money is gone.

There's a reason 99% of people with a large amount of savings prefer to keep their money in a financial institution and not hidden under their bed. Most people don't fancy themselves to be expert gunfighters. There's risk no matter what, but at least in the USA, you aren't at serious risk of losing your money permanently unless you are prosecuted for some crime.

With a Gun does it really change much?
Your life is already in danger
It's easier for people to know how much you own in a bank than in Bitcoin
Except well you stupid to announce it
So to me this doesn't hold much water.

[legiteum]

I'm still not sure what that means. Can you give me an example where I "don't" have total control over my savings held in various stocks and ETFs in my brokerage account, but I "do" have "total control" over Bitcoin in my brokerage account? A tangible example?

You can hold Bitcoin without a brokerage account, with a brokerage account it indeed becomes pointless when you consider this advantage (no intermediary) only.

But even with self-custody, you still need to trade it somehow in order to use it for your own life. And self-custody has it's own problems, and one can easily "lose control" if your physical keys are lost or stolen.
 

Okay, but how exactly would Bitcoin help you there? In order to gain any benefit you'd need to take your entire life off-grid.

No. If they detect you're an opposition supporter, they could for example order your bank to freeze your account. Just to scare you, because killing all opposition supporters is not rational for them. Dictatorships have used these "scare" tactics for decades if not centuries. The only dictator that tried to kill all oppositionals was Pol Pot if I'm not incorrect (and North Korea is at least imprisoning a lot of them, but that's also an extreme example).

Your Bitcoin account is unaffected. They can't take it away if you're careful. And if you are cut from the Internet and mobile provider too, then you can still use local open WLANs or, in big cities, often mesh networks.

So you live in a shack in the middle of the forest and without electricity or any other connection to the outside world in order to evade prosecution, but... you've got some private keys stored on your computer little pieces of paper, and you have "total control of your money"? Sounds like no control of anything, let alone your money.

If your government is after you, where you store your savings is the least of your worries...

High Bitcoin ownership can also help to pressure a government which is moving into an authoritarian direction.

How? Again, governments can control anything they want. Bitcoin is on the internet and as such is trivial to track, especially when it's converted to something tangible in order to be spent.

If a high percentage of the population has Bitcoin, the scare tactics of such a government become less ineffective. And then they may become more willing to move into a "benevolent" direction.

99.9% of people do not want to be criminals, and wouldn't be good criminals even if they wanted to be. If your government has gone bad, there's nothing you can do--your choices are either comply or live with a drastically reduced quality of life e.g. living off-grid (or living partially off-grid, etc.).

By talking about a US government that has "gone rogue", you are talking about a doomsday scenario that would mean a useless or inaccessible Internet and the fall of the financial system that would drive Bitcoin's price to 2010 levels at best.

If they outlawed Bitcoin, for instance, the value would drop by 99% or more.

Most governments do not have that power. Again, not even China was capable of a catastrophic crash, and China is clearly the #2 of the world and may soon be #1 just by its population weight.

China never had any power over Bitcoin because it did not host the financial system responsible for 99% of its tradable value.

L2's are not Bitcoin. They are L2s. They introduce risk and friction that basically makes it pointless to have the first layer.

That's a bit of a shallow and black-and-white answer. I've already written that the most risk in Ark is that you lose access for some days (depending on the configuration). They can't steal your money (like other L2s like Liquid in theory could).

Sure they can. If your transaction is going through the system, the transaction can be stolen or lost. You are adding a layer of software that can do whatever it wants to do with your Bitcoin.

And meanwhile, there are L1 systems that work way better, and are thoroughly trusted with $trillions in transactions.

In security, any system is only as strong as its weakest link.

But the scenario with a pro-government fork you outlined would crash both the government fork and the real Bitcoin, and that's why Coinbase y Cia. would never move in that direction.

I agree that it's unlikely, and there's no evidence anybody is planning anything like this, but the point of the OP is that it's not "impossible". The fact is that the financial system that powers everybody's bags and buys people's houses and cars and fancy dinners is controlled by the US and other major governments. The only way out of this is voting (and hoping), not some code checked in to Github.

And if you really are preparing for doomsday, buy bullets and other things that are tradable without, say, your iPhone connected to T-Mobile since all of those things aren't going to be around when society crumbles.

With a Gun does it really change much?
Your life is already in danger
It's easier for people to know how much you own in a bank than in Bitcoin
Except well you stupid to announce it
So to me this doesn't hold much water.

Robbing a bank is a lot harder than robbing a person. And the bank is likely insured. Etc. Most people let others take the risk of violence and pay them a small fee for their trouble.

And the minute you try to spend your BTC you reveal that you have it--and you reveal to petty criminals that they can get your money very easily.

This is why 99% of people use banks etc. to hold their money...

[Ambatman]

Robbing a bank is a lot harder than robbing a person. And the bank is likely insured. Etc. Most people let others take the risk of violence and pay them a small fee for their trouble.

Do you have to rob the bank to steal someone's money?
You already stated that there's a gun to the person head
Why would they want to rob the bank
When they can rob the person.
The only advantage is that it would be complicated to move a large amount of money
But there's always a way.

And the minute you try to spend your BTC you reveal that you have it--and you reveal to petty criminals that they can get your money very easily.

This is why 99% of people use banks etc. to hold their money...

I recall Bitcoin being pseudonymous
So how does it reveal your identity if you don't yourself.

[OsaiEmma]

Imagine this scenario.

Now imagine migrating from the main network to the fork, hereby bringing down the price of the main Bitcoin. That means, most of these giants will be selling in a loss. It will be a race for who leaves first.

Now imagine a lot of transactions happening all at once, the fees will be astronomical. Just imagine the level of loss they'll sell at.

After that, imagine how a lot of die hard bitcoiners will be buying these Bitcoin at a cheaper price, and with time, the price of the main Bitcoin will once again stabilize and increase.

Now imagine people going to trust the government's fork, the same government that created inflation and an unbalanced economy.

There are so many scenarios to imagine here brother.

Imagine this scenario.

The idea that "Bitcoin cannot be controlled by governments" is total bullshit. It's a product in the market just like any other. It's like saying "Microsoft Word cannot be controlled by any government". Sure it can, if the government really wanted to.

The reason Bitcoin isn't currently being controlled by the US government is because they don't feel like it. The current setup doesn't bother them, so they let it be. But it's not because of some "magic technical architecture" that makes it immune to political control. The US government has control of its $30T economy, and all of its benefits. You don't get to enjoy those benefits (for instance, thousands of new BTC investors coming in every day to make the value of your bags go higher and higher) without control. Real life doesn't work that way.

Please stop saying, "Bitcoin cannot be controlled by governments", because... it absolutely can, and to some extent already is.

Honestly, what you've described here is not the government taking control over Bitcoin. But rather, the government fighting against the decentralization of Bitcoin with a fork. From your "scenarios", the original Bitcoin will still be in existence, validating blocks, and remaining fully functional. And although, in such hypothetical scenes, alot of investors will be in a loss. But with time the price will recover, seeing how most of us take Bitcoin as a long term investment.

So IMO, you just proved that the Government cannot really control Bitcoin. If they have to resort to all the stress of lobbying, and creating a centralized fork to compete with Bitcoin. That should tell you a lot about their control over Bitcoin.

[impulse709]

Well technically at least one of them was directly trying to replace bitcoin (bitcoin cash) pretending to be "real" bitcoin. Whole scene was divided and some old school bitcoin influencers were supporting bigger blocs.

Reason they failed was because consensus disagreed with them, but i could see something like this happening again.

Consensus disagreed with them and the community rejected the fork despite everything they tried. Marketing and power can only get you so far. In the end, the truth will be revealed. Bitcoin didn't succeed because of its fancy name. The idea behind it can keep going even if the name gets stolen by a pedo-elite war machine. One will be controlled by a State and its military buddies. It will be centralized and not censorship-resistant. The other PoW coin won't have those characteristics, and people will eventually move to the latter because it stands for everything Satoshi's original stood for.

In part, the Bitcoin Cash fork is a testament to Bitcoin's resilience. With a heavy hand of backing from influential individuals, big miners and resources it did not win in the end as the rest of the community did not support the changes that were put forward. That is an indication that consensus is not something one can just buy or impose. I don't believe that governments have no influence over the Bitcoin. They can determine exchanges and control the tax takers and introduce hurdles to adoption. When thousands of nodes are operating independently, enforcing the rules, what they can't easily control is the protocol itself. The decentralisation of Bitcoin is still its best protection from centralisation.

[Pmalek]

Sure, until somebody with a gun comes along and steals it from you. Then you have zero control because your money is gone.

That goes both ways. There is a reason we always say that there is very little protection against a $5 wrench attack and that's true whether your money is under your bed or at a bank. The wrench can do equal amount of damage to both sets of people. If you have people you love (and most people do), you aren't going to sit idly by while someone hurts them because you want to preserve your wealth. You will give them your bitcoin, your riches, and find a way to get the wealth they are after from a bank, safety box, or any other custodian.

[Wind_FURY]

Imagine this scenario.

A group of large Bitcoin brokers like, say, Binance, CoinBase, Robinhood and MasterCard, decided that the Bitcoin architecture should be changed to make it scale to everyday payments, and in the process swapping out the Proof-Of-Work architecture to a trusted centralized architecture driven by a few well-known companies.

Obviously the "hard core" Bitcoiners on the internet would freak out, and vow never to use their fork.

Now imagine that these giant companies lobbied the US government, and also got key players like Michael Saylor, Elon Musk, and Donald Trump on their side. With this political and financial support, they get the US Congress to pass a law declaring that this new fork is the "official Bitcoin" and every other fork is an illegal fake and cannot be called "Bitcoin". The US president, who would be on board with this change (say it made his own family a lot of $$$), would also use the military and economic might of the US government to bully many other countries to accept this new law.

The result would be that ~98% of the value of BTC holdings would fall in line with this new change. They would have no choice since the value of the original Bitcoin fork would be non-tradable in all of the major trading platforms, whereas the US government's fork would be tradable almost everywhere Bitcoin is traded today. Hence the market cap of the fork would be where Bitcoin's is today, at around $1 trillion, and the fork's market cap would be utterly tiny, probably not even breaking a few million.

Put it another way, you could use your keys on either network and access your Bitcoin. One would allow you to trade on mainstream platforms, trade with ETFs, and would have the full backing of the US government, and other would be a network that would include yourself and a few hundred Bitcoin religious hard-cores. In one network your BTC would be tradable for $10,000 in physical goods and services, and in the other it would be tradable for $1.49 in physical goods and services. Which one is any average person going to choose?

To 99% of Bitcoin users, all they will care about is their money being safe. They would go with the flow and not risk their savings on an illegal network.

The idea that "Bitcoin cannot be controlled by governments" is total bullshit. It's a product in the market just like any other. It's like saying "Microsoft Word cannot be controlled by any government". Sure it can, if the government really wanted to.

The reason Bitcoin isn't currently being controlled by the US government is because they don't feel like it. The current setup doesn't bother them, so they let it be. But it's not because of some "magic technical architecture" that makes it immune to political control. The US government has control of its $30T economy, and all of its benefits. You don't get to enjoy those benefits (for instance, thousands of new BTC investors coming in every day to make the value of your bags go higher and higher) without control. Real life doesn't work that way.

Please stop saying, "Bitcoin cannot be controlled by governments", because... it absolutely can, and to some extent already is.

It wouldn't be that simple because if it truly was, then it would be happening/already have happened. But I do want to see a government entity try it exactly like how you have posted it.

 

OR, what if the U.S. Government merely adopt Bitcoin like what they're doing now? That would be the easier choice, no? 

¯\_(ツ)_/¯

[tbct_mt2]

It wouldn't be that simple because if it truly was, then it would be happening/already have happened. But I do want to see a government entity try it exactly like how you have posted it.

 

OR, what if the U.S. Government merely adopt Bitcoin like what they're doing now? That would be the easier choice, no? 

¯\_(ツ)_/¯

They can accept Bitcoin, can not accept it, and their policy can change with time and different Presidents but I believe that Bitcoin growth and adoption for it are irreversible things. This means governments will not reverse their policies from accept to don't allow Bitcoin, but to control Bitcoin blockchain, they must invest money to have enough mining hashrates.

Frankly I am not stupid and don't say that governments don't have enough money for it, but will they want to do that?
I don't think they want to do that while they truly know that they can accumulate bitcoins and take advantage of nations that are fastest with Bitcoin accumulation.

[Faisal2202]

haha, I can't stop laughing haha.

My dear friend, the same thing has happened before with BCH. They even bought the domain with the name bitcoin.com.

They also launched a massive marketing campaign, telling the world that their fork was the real Bitcoin and that the original BTC was slow, fake, an imposter, blah blah blah.

Remember Craig Wright, who did the same thing with BSV, but that actually was a real BS.

You think the US is the main player in the game and can do whatever the hell it wants? You think if they take Facebook's code, tweak one feature, and launch it with the name US Facebook, they are going to become billionaires? Only if we choose to make them.

Anyway brother, America is not the only country in the world. Even if they leave it, it will still move on. BTC doesn't need Americans. I mean no disrespect, but that's the way it has become now. China is completely out, did anything change? If the US stays out, nothing will change.

[legiteum]

I recall Bitcoin being pseudonymous
So how does it reveal your identity if you don't yourself.

Bitcoin is a public ledger, so no, it's not very anonymous. Yes, it deals in identifiers and not individual's names, but chain analysis can easily triangulate people's real-world identities once they spend their Bitcoin on something tangible, etc.

In other words, Bitcoin is anonymous... until you try to spend it on something.

If there were more daily payments happening with Bitcoin, marketers would be going crazy with data mining the chain so they could sell you crap, believe me...

Now imagine migrating from the main network to the fork, hereby bringing down the price of the main Bitcoin. That means, most of these giants will be selling in a loss. It will be a race for who leaves first.

Yep, the initial split would certainly impact Bitcoin negatively. On the other hand, state-sanctioning could vastly increase the value.

Also, imagine the US, for instance, buying $200 billion in BTC as part of this maneuver, just to shore up the market. There's lots of levers Congress could pull if they wanted to.

Honestly, what you've described here is not the government taking control over Bitcoin. But rather, the government fighting against the decentralization of Bitcoin with a fork. From your "scenarios", the original Bitcoin will still be in existence, validating blocks, and remaining fully functional. And although, in such hypothetical scenes, alot of investors will be in a loss. But with time the price will recover, seeing how most of us take Bitcoin as a long term investment.

So IMO, you just proved that the Government cannot really control Bitcoin. If they have to resort to all the stress of lobbying, and creating a centralized fork to compete with Bitcoin. That should tell you a lot about their control over Bitcoin.

In discussing scenarios as to how it could be done, we've demonstrated that it would be... complicated. That's not the same as proving it would be impossible.

To me, people have a false sense of security when they think it's "impossible" that Bitcoin cannot be touched by governments. Governments can do anything they want when they host the financial system that the product lives in, and Bitcoin lives in the financial system of the US and a few other top-GDP countries, realistically.

Yes, nobody can stop you from downloading some software and calling it "Bitcoin" and maybe even sharing it with some friends. And if you want to risk prosecution, you can do all kinds of things that governments can't fully stop. But for 99% of people, they live in the world of legal things, and they obey what their government tells them.

In part, the Bitcoin Cash fork is a testament to Bitcoin's resilience.

There's no comparison to what the OP is talking about. Bitcoin Cash was never backed by the US government, never called "Bitcoin" by itself, never caused the original Bitcoin fork to be declared illegal, never backed by any seriously large players, and so forth. It was just a fork some people felt like doing one day.

It wouldn't be that simple because if it truly was, then it would be happening/already have happened. But I do want to see a government entity try it exactly like how you have posted it.

They've never done it because voters have never been motivated to do it, not because it's physically impossible.

OR, what if the U.S. Government merely adopt Bitcoin like what they're doing now? That would be the easier choice, no? 

Exactly the OP's point. It was not, "this is going to happen soon", but rather, "this is theoretically possible, so please stop saying it's 'impossible' because it isn't".

My dear friend, the same thing has happened before with BCH. They even bought the domain with the name bitcoin.com.

Can you name the act of Congress associated with creation of BCH? You know, the one that, by force of law declared anything else that called itself "Bitcoin" to be a fraud, and thus prosecutable?

Are you aware that the crime of fraud is prosecuted by... governments? And thus they determine what is and is not fraud, not you and not some "community"?

Could the US government shut down Facebook and load its users into competitor instead? Hell yes it could. It's probably never going to happen, but that's different than saying, "impossible"...

[Cryptoprincess101]

The idea that "Bitcoin cannot be controlled by governments" is total bullshit. It's a product in the market just like any other. It's like saying "Microsoft Word cannot be controlled by any government". Sure it can, if the government really wanted to.

I will say that the price of bitcoin can be controlled by the government, but bitcoin itself cannot be controlled by the government. It seems to me that you don't understand the architecture behind the existence of bitcoin. Maybe if the government were able to unveil the creator of bitcoin namely Satoshi Nakamoto, they would have surely had control over bitcoin but so far as his identity remains unknown, the government can never have control of bitcoin. Bitcoin was a well experimented masterpiece; do you think that the government haven't done much research on how to control it? they have done a lot of research but didn't succeed.

[samadam007]

What is said adds up to the fact that no shitcoin will ever become Bitcoin, but people don't voluntarily support BTC, and the same thing goes for the government. People support it because it refines our understanding of currency and assets while also maintaining a trustless sovereignty movement. When people see an opportunity like this, they dive in.

Something the people who don't practise self-custody don't know is that they technically make BTC risk becoming another tokenized asset controlled by Wall Street or governments.

Saying people don't voluntarily support BTC isn't accurate. Millions buy and hold it willingly every day because they see its value as sound money, a hedge against inflation and a tool for financial independence. Governments are jumping in too.... El Salvador made it legal tender, Bhutan is  mining it, and others are talking about reserves or ETFs.
Bitcoin's strength comes from both its technology and that voluntary adoption. The more folks self custody it, the stronger and more sovereign it stays and harder to centralize