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Even if Bitcoin replaces fiat money, governments will find ways to enforce monetary policy, because the power to put people in prison trumps any algorithm. A g

Even if Bitcoin replaces fiat money, governments will find ways to enforce monetary policy, because the power to put people in prison trumps any algorithm. A government absolutely can declare that the correct blockchain is actually this other blockchain, or the only legal algorithm is now a version of their own invention (like the split between Bitcoin and Bitcoin Cash, but enforced by law). If the gov wants inflation, they can replace the algorithm with one that allows inflation, or achieve a similar effect by publishing an official root block every year with a portion of all holdings transferred to the government. But they probably wouldn't do that, when it's so much easier to simply seize cryptocurrency ("give us your private keys or spend thirty years in prison") or heavily tax it. None of this has been done because crypto is still a novelty, but if it ever becomes a serious threat to government policy, governments will find ways to deal with it. And centralizing Bitcoin in exchanges like Coinbase makes this far easier; the government only needs to enforce its policy on Coinbase, and Coinbase in turn will enforce it on customers.

tablespoon 6y ago
> A government absolutely can declare that the correct blockchain is actually this other blockchain, or the only legal algorithm is now a version of their own invention (like the split between Bitcoin and Bitcoin Cash, but enforced by law). To that point, I found this blog post pretty interesting: https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regulators-successfully-introduce-bitcoin-censorship-and-other-dystopias/ https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regu... tl;dr: Bitcoin mining is mostly done by businesses, businesses will choose legal compliance over bitcoin-idealism, governments could wrest control of blockchain transactions through legal penalties (e.g. blacklist certain addresses and make it illegal for miners to process transactions from them OR mine blocks based off ones with illegal transactions). Economic incentives will encourage miners too small for enforcement to conform to the regulations. Bitcoin idealists can't do anything about it because their hashrate is puny and no one legit will deal with their forks.

tablespoon 6y ago

> A government absolutely can declare that the correct blockchain is actually this other blockchain, or the only legal algorithm is now a version of their own invention (like the split between Bitcoin and Bitcoin Cash, but enforced by law). To that point, I found this blog post pretty interesting: https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regulators-successfully-introduce-bitcoin-censorship-and-other-dystopias/ https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-regu... tl;dr: Bitcoin mining is mostly done by businesses, businesses will choose legal compliance over bitcoin-idealism, governments could wrest control of blockchain transactions through legal penalties (e.g. blacklist certain addresses and make it illegal for miners to process transactions from them OR mine blocks based off ones with illegal transactions). Economic incentives will encourage miners too small for enforcement to conform to the regulations. Bitcoin idealists can't do anything about it because their hashrate is puny and no one legit will deal with their forks.