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Author Topic: What is stopping Gov't from starting their own blockchain...  (Read 2513 times)
bb113
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January 13, 2012, 06:45:11 AM
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thus taking advantage of the utility of bitcoin but leaving all current bitcoin holders with a lesser used (and therefore lower value) currency?

Sorry if this has been asked before.
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January 13, 2012, 06:47:07 AM
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Why would they?

Govt = central control and currency issue via "trusted" (LOLZ) third party.
Bitcoin = decentralized, and operated without need for "trusted" third party.
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January 13, 2012, 06:48:11 AM
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Lets say the government is libertarian.
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January 13, 2012, 06:49:49 AM
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There is no technical reason they couldn't although I am almost certain we will never see any country give up control like that.
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January 13, 2012, 06:53:20 AM
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thus taking advantage of the utility of bitcoin but leaving all current bitcoin holders with a lesser used (and therefore lower value) currency?

Sorry if this has been asked before.

I'd say their nature prevents it.

Governments being what they are, some of the key features of Bitcoin (privacy, decentralization, etc.) tend to conflict with their core traits. I doubt any government could resist making slight, then ultimately significant modifications: requiring registration (name, address, SSN) per private key and limiting their number, requiring blocks be verified by a central server, removing the 21M cap, and such.

Even if it was an unmolested clone, once the thing was released, who would use it? And without a supporting infrastructure in place, how could they force anyone to use it?

I don't expect competition from governments to be an issue for Bitcoin anytime soon, if ever.

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January 13, 2012, 06:58:56 AM
 #6

I see what you guys are saying, it still dampens my hope for $1000/bitcoin though. If bitcoin is adopted as legal tender and people complain about the unfairness of early adopters, I could see a government chain being implemented as a feel good solution to the "problem".
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January 13, 2012, 07:34:06 AM
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If GovCoin is decentralized like Bitcoin, what would they gain?  They just end up with two coins they can't control instead of one.

If GovCoin is centralized, it's just an electronic version of fiat...  It's your debit card, but run on the government's network instead of the bank's.  That's kind of interesting, but it's not revolutionary.

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January 13, 2012, 07:46:19 AM
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If GovCoin is decentralized like Bitcoin, what would they gain?  They just end up with two coins they can't control instead of one.

If GovCoin is centralized, it's just an electronic version of fiat...  It's your debit card, but run on the government's network instead of the bank's.  That's kind of interesting, but it's not revolutionary.

The government would gain nothing other than use of a superior currency. The GovCoin would be perceived as superior because everyone gets to hear about it at the same time so greedy early adopters don't get to profit.
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January 13, 2012, 07:59:05 AM
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dampens your hope for 1k/btc?? The get rich quick scheme not fast enough for ya??

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January 13, 2012, 08:01:18 AM
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It makes hoarding less attractive, yes.
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January 13, 2012, 08:23:31 AM
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thus taking advantage of the utility of bitcoin but leaving all current bitcoin holders with a lesser used (and therefore lower value) currency?

Sorry if this has been asked before.

I'd say their nature prevents it.

Governments being what they are, some of the key features of Bitcoin (privacy, decentralization, etc.) tend to conflict with their core traits. I doubt any government could resist making slight, then ultimately significant modifications: requiring registration (name, address, SSN) per private key and limiting their number, requiring blocks be verified by a central server, removing the 21M cap, and such.

Even if it was an unmolested clone, once the thing was released, who would use it? And without a supporting infrastructure in place, how could they force anyone to use it?

I don't expect competition from governments to be an issue for Bitcoin anytime soon, if ever.


This is a good argument against it, though. A government couldn't stop itself from meddling.
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January 13, 2012, 09:17:08 AM
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Why would they?

Govt = central control and currency issue via "trusted" (LOLZ) third party.
Bitcoin = decentralized, and operated without need for "trusted" third party.

Agree completely. Nothing is stopping anyone from creating a block chain, there are already more running around than have yet to show any practical purpose. Why would a government or for that matter anyone else want to?

This is a topic extensively covered elsewhere on this forum. Appropriate head gear is suggested for the various different premises offered. For example you may want 1890s style sleeve garters and a green eye shade cap in one section of the forum, for another a pillowcase with eye holes cut in it, in another a tinfoil hat, and so on.

It's not like a blockchain is all that useful by itself, you can execute transactions in it; that's nice. Attempts to make it useful have created a lot of centralized infrastructure around Bitcoin in particular, the most prominent examples being the currency exchanges. Who would have ever thought that "Magic The Gathering Online eXchange" would seriously be a large part of something that some people seem to regard as their Armageddon ace-in-the-hole?

So, maybe if the US government created something like The Federal National Second Life Mortgage Administration to rescue all the investors underwater on their Second Life properties, they could throw a blockchain in there just for the effect  Grin

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January 13, 2012, 11:28:46 AM
 #13

I wouldn't use a government control blockchain, would you?  Roll Eyes

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January 13, 2012, 12:16:09 PM
 #14

Why? They wouldn't need all that mining overhead mumbo jumbo, they could just keep one central transactions database.

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January 13, 2012, 01:52:11 PM
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Why? They wouldn't need all that mining overhead mumbo jumbo, they could just keep one central transactions database.
I think this is the premise behind various bitcoin-based DRM schemes that have been proposed, actually.

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January 13, 2012, 03:58:46 PM
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There's nothing stopping the Gov't starting their own google.com or facebook.com, it's not difficult given their near infinite resources. But can they compete with the original? the answer is probably no.

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January 13, 2012, 04:03:23 PM
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Ok, the more I think about it the more I'm convinced its not an issue.
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January 13, 2012, 04:22:08 PM
 #18

nothing would stop them other than why would they in the first place?










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January 13, 2012, 06:02:22 PM
 #19

A government just couldn't help itself from altering the protocol, thus creating a distinction between Bitcoin and GovCoin. Well, if GovCoin retained much of the utility of Bitcoin, it could still relegate bitcoin to a niche market... Still the government would probably be altering the protocol every few years, etc.
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January 13, 2012, 06:21:47 PM
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There is no technical reason they couldn't although I am almost certain we will never see any country give up control like that.
I disagree. Bitcoin provides a first-adopter advantage like no other currencies, even for governments. If bitcoin ever becomes big enough, there will be a serious incentive for governments to start accepting them. The first government to do so could secretely buy bitcoins and then boost their value by publicly stating their support. If other governments would follow suit the first-to-adopt-government would gain even more. It's all about the threshold where the expected gain in wealth of adopting bitcoins is valued higher than the expected loss of control. Thus this would most logically happen in a third world country where the government already have little control over their currency.
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