Comment by KetoManx64
13 hours ago
Bitcoin is a crypto-currency/blockchain. Coinbase is a corporation that allows users to buy/trade crypto-currencies.
With Bitcoin you do not get government bailouts like what happened with the beyond reckless banks in 2008.
"With Bitcoin you do not get government bailouts" -- yeah maybe not yet? Is it beyond belief that a government with leadership deeply invested in crypto currencies might take action if something super disruptive happens?
Possible. But Bitcoin is hard capped at 21 million coins. The government can peint more paper money to bail a company out if it makes stupid decisions, but they cannot print more Bitcoin. This will devalue the paper currency even more and also increase the value of Bitcoin. Bitcoin is called a hedge against inflation for a reason.
You say "devalue the paper currency even more" but if bitcoin holders need to be bailed in any given country aren't we talking about a scenario where bitcoin is the thing that's lost a bunch of value? Some sort of "it turns out shady bitcoin holders or companies were artificially pumping up the value in a sneaky way and then someone connected the dots" situation?
First thing that comes to mind off the top of my head as a US-Govt option here would be something like: bail out US people/companies of bitcoin holdings in USD in conjunction with banning bitcoin in the US going forward. So that would be quite the string of events at that point for non-US bitcoin holders: first a crash that caused all these US bitcoin holders to go screaming to the government for help. Then the overnight removal of a huge chunk of the bitcoin market, coupled with either a firesale to comply with the ban or US gov seizure of a bunch of the coins, which will push the price lower for anyone who hasn't sold yet since their buyer pool is now much lower.
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> But Bitcoin is hard capped at 21 million coins
Bitcoin is not an immutable law of nature. If the coin minting cap is reached, all that needs to happen is for miners to start running a fork with a higher cap. Tada, more coins conjured out of the ether, just like all the previous ones. If you want enforced scarcity, you need to be tied to something physically scarce.
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The government can bail Bitcoin owners out by buying a lot of Bitcoin and holding it, or even burning the wallets.
At present BTC is usually denominated in USD. Until I start to see BTC used as the cross-rate I'm sceptical. Presuming it occurs, it would occur relatively quickly?
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> With Bitcoin you do not get government bailouts like what happened during the beyond reckless banks in 2008
It is not beyond imagination that the most popular Bitcoin blockchain (and thus, the label of being the "real" Bitcoin) could change at some point in the future.
"Bitcoin" is not immune from the implications of political fuckery.
By what mechanism? The whole point of bitcoin is that you can’t force a consensus change. This is enforced by the algorithm and the laws of thermodynamics.
If, for whatever reason, all the mining power switches to the other chain, it will become the de facto "Bitcoin".
I don't know what the specific mechanism would be, but I would bet that it relates to the billions of dollars backing the current ecosystem, and the interests of the people behind them. If the right event or crisis comes along, then people could be compelled to switch over to something else.
I'm sure there's someone out there still mining blocks on that chain with the exploit from 2010, but that's not where the mining power is. If the right series of events occurs, the miners will switch.
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Bitcoin has forked a few times it's creation: https://en.wikipedia.org/wiki/List_of_bitcoin_forks The determining factor for which fork is successfully is bases on the Bitcoin node runners and miners choosing which fork they devote their resources to.
Governments around the world are 100% attempting different plans to destabilize or destroy Bitcoin because it harms their interests and ability to print money from thin air. But at the end of the day it's a distributed ledger, so even if they do find a way to manipulate or damage or takeover the network the Bitcoin users can just fork it from before they did their damage and continue from there. That is the ultimate power of a decentralized blockchain, nobody has ultimate power and everyone votes with their resources.
Power comes from the barrel of a gun.
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If anything, the real risk of BTC isn't governments destroying it.
It's that everything you do on the blockchain is there forever, so if a government needs you in jail for using it, they can show you were involved in a financial crime and the blockchain proves it... And if you are unwilling to give up your public wallet they can keep you in jail indefinitely until you do.
Bitcoin is pseudonymous, not anonymous. Every activity on the network is encoded into a perpetual auditable dataset, by design.
I would be willing to bet the current administration would in fact do whatever they could to undermine the dollar's value, including propping up a digital currency when it should fail.
There was a government* bailout in Ethereum, however. https://en.wikipedia.org/wiki/The_DAO
The government of Ethereum is not the US government.
I don't see a reference to a government bailout in the article you listed. The chain was forked by the community to the state before the hack and most users switched over this supporting this fork and calling it Etherium going forward.
The chain was forked, ultimately, by Vitalik Buterin - the president of Ethereum - and his cabinet. Calling a thing by different words doesn't make it a different thing.