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> What if governments disallow converting Bitcoin to real currency? The real threat is that the security guarantees for the distributed consensus on the blockc
by AlexCoventry 9y ago
> What if governments disallow converting Bitcoin to real currency?
The real threat is that the security guarantees for the distributed consensus on the blockchain history make economic assumptions which don't apply to sovereign actors. If the US decides to assemble enough ASICs to construct bitcoin double spends, it can just do it. If China decides to expropriate the mining hardware in its jurisdiction and use it to construct double spends, it can just do it.
Investing in cryptocurrency is like trading the national currency of a very promising but poorly defended young nation. There's a lot of money to be made, but the bottom will fall out if they're invaded.
- danielbarla 9y agoSurely double spends would trigger a collapse of the currency? Other than intentionally causing such a collapse, why would any party want to do this?
- AlexCoventry 9y agoThey're a huge nuisance to nation states, which derive great power from the fact that most economic activity under their jurisdictions is denominated in a token they can generate as much of as they wish, and for which they can generate as much demand as they wish through taxation.