7 ms·

The best case is an argument similar to the reason the US gold reserve exists. While the gold no longer directly backs the currency, gold is a neutral asset and

The best case is an argument similar to the reason the US gold reserve exists. While the gold no longer directly backs the currency, gold is a neutral asset and wouldn't go to zero during wars/depressions, so could be sold strategically if needed to fund government in a dire situation. The claim is that BTC is also a neutral asset, meaning it's not linked to any one government or economy, and it has certain properties similar to gold. And that the US should not let China or other countries stockpile this reserve asset first. It's obviously not "necessary" for any government to function, but the claim is that the reserve properties would be strategically beneficial to weather the worldwide crises in the coming decades.

peterldowns 2y ago
That's the best argument I've heard, thank you. I disagree with aspects of this argument but it at least makes some sense to me.
- r3ctilinear 2y ago
  Absolute sovereignty is the important detail that brings the strategic reserve argument into complete focus. There are many types of wealth but none of them offer the level of freedom against censorship and external interference that bitcoin does. In an increasingly multipolar world bitcoin offers the greatest degree of self sovereignty for individuals and nations alike.
  - SR2Z 2y ago
    Bitcoin is vulnerable to 51% attacks, and before China banned it there were mining pools that were intentionally limiting signups to avoid hitting that number. Then there's the throughput issue, the mandatory deflation, and a ton of other small issues that make it a terrible store of value. Bitcoin is subject to far more limitations than folks normally consider and certainly does not offer more "self-sovereignty" than a pile of gold.
    - r3ctilinear 2y ago
      I have been using bitcoin since shortly after it's inception. I don't buy any of your spurious claims. Bitcoin survived the blocksize war of 2016 and it's only become more durable and secure since. 51% attack is now outrageously prohibitive. Gold is a fancy paperweight that's impractical to use. Adoption is happening hand over fist for a reason. If you can't see it too bad.
      - SR2Z 2y ago
        > 51% attack is now outrageously prohibitive No, it's not! It's almost happened in the past - Google it. The rapid adoption and deployment of ASICs around subsidized or cheap electricity makes it relatively straightforward for anyone with real resources to pull it off. > Gold is a fancy paperweight that's impractical to use Bitcoin (the core blockchain) can only process about seven transactions per second. Don't tell me gold is impractical! > I have been using bitcoin since shortly after it's inception Yes, and that's the only reason you seem to able to believe these things. Tell me, what can you ACTUALLY buy with Bitcoin without requiring a conversion to fiat currency under the hood? It's not just for tax reasons, it's because it's an awful store of value and would be disastrous for any modern, long-lead supply chain to rely on. > If you can't see it too bad. What I see is a "currency" with such terrible liquidity and deflationary properties that Trump is planning to sell off the US gold reserve to pay out these "Bitcoin billionaires" who would otherwise be totally screwed.
        r3ctilinear 2y ago
        Since the July 2014 mining pool distribution wake up call (the likely "attack" event you're referring to and blowing out of proportion) Bitcoin mining has become more decentralized and more mindful of safe hash rate distribution. The hash rate has also increased to be 4.5million times stronger(!!!) since then. Winning an arm wrestle against a ~1ZETTA hashes/second distributed protocol with an interest in self preservation is SO not "relatively straightforward" that it's funny. Gold is utterly impractical unless it's paper gold in which case you have limited sovereignty over it. People keep cutting open gold bars and finding tungsten! lololol The TPS works fine for me. So does store of value. So does layer 2 transactions. A new global monetary standard has arrived whether you like it or not.
bufferoverflow 2y ago
BTC is better than gold in many regards. - impossible to counterfeit - trivial to audit - easy to transfer - easier to store - its supply is actually limited (unlike gold, which is near-infinite in the universe). Most of it has been mined. Its supply will actually diminish over time, as keys get lost forever, though it's hard to tell how fast that process is.
- 1659447091 2y ago
  And completely worthless in the event of war with attacks on power grids electronics etc. Gold on the other hand, I could trade for food.
  - bufferoverflow 2y ago
    If you are at a war where your whole electric grid and internet and SMS are completely down, you have much bigger problems than currency not working. It means your bank accounts are gone, your credit cards are gone. And how are you actually going to use gold as currency? Walk into a shop and shave off some gold at the checkout? And how will the store owner authenticate that it's actually gold? Bullets will be a better currency than gold in that scenario.
    - lesuorac 2y ago
      I'm not sure war even needs to be that large for it to be a problem. Basically unless its like China vs US then you don't need sell BTC to fund the country (even then I don't think you would; but if you never need to sell BTC its pointless). If China vs US then realistically, China can and probably will cut a lot of the internet traffic between the two. Bitcoin only functions because of the public ledger; if Chinese miners aren't sync'd with non-Chinese miners then you have a double-spend problem and I can't see bitcoin not going to 0 pretty quickly.
    - InfiniteTitan 2y ago
      > And how will the store owner authenticate that it's actually gold? Umm this is a solved problem. Believe it or not gold has been used as currency for thousands of years.
rifty 2y ago
I think the one thing with crypto assets that differs it from other strategic reserve assets is that there is no baseline demand rooted in usage and consumption. If the US was in such an emergency position that it needed to liquidate the crypto, it could be worthless and unmovable because of lack of baseline demand at that time. Although perhaps emergency purposes aren't the only reason to have reserve assets..
cactacea 2y ago
Sold for what though? Dollars of course. But why not just print more dollars in the first place? Gold could be used to make payments directly and I don't see that happening with BTC. This argument still makes no sense, what am I missing.
- ahel 2y ago
  sold for whatever you want. Supposing the other party wants BTC (wild assumption) and you want 1Mton of lead, I guess the exchange would happen.
alexashka 2y ago
Would bricks of gold really change anything in a dire situation? I don't get it. I'd bet on aligning with people who know how to make use of bullets personally.
- tacon 2y ago
  Since Russia is loading planes with bricks of gold to pay for imports and evade banking sanctions, they must think bricks of gold are useful in a dire situation.
  - defrost 2y ago
    With an obvious drawback highlighted on the 15th of March 2018.
    - harambae 2y ago
      I had to look this one up… “Approximately 3,400kg of gold ingots break free from a Nimbus Airlines Antonov An-12 cargo plane and fall onto the runway at Yakutsk Airport.”

peterldowns 2y ago

That's the best argument I've heard, thank you. I disagree with aspects of this argument but it at least makes some sense to me.

r3ctilinear 2y ago
Absolute sovereignty is the important detail that brings the strategic reserve argument into complete focus. There are many types of wealth but none of them offer the level of freedom against censorship and external interference that bitcoin does. In an increasingly multipolar world bitcoin offers the greatest degree of self sovereignty for individuals and nations alike.
- SR2Z 2y ago
  Bitcoin is vulnerable to 51% attacks, and before China banned it there were mining pools that were intentionally limiting signups to avoid hitting that number. Then there's the throughput issue, the mandatory deflation, and a ton of other small issues that make it a terrible store of value. Bitcoin is subject to far more limitations than folks normally consider and certainly does not offer more "self-sovereignty" than a pile of gold.
  - r3ctilinear 2y ago
    I have been using bitcoin since shortly after it's inception. I don't buy any of your spurious claims. Bitcoin survived the blocksize war of 2016 and it's only become more durable and secure since. 51% attack is now outrageously prohibitive. Gold is a fancy paperweight that's impractical to use. Adoption is happening hand over fist for a reason. If you can't see it too bad.
    - SR2Z 2y ago
      > 51% attack is now outrageously prohibitive No, it's not! It's almost happened in the past - Google it. The rapid adoption and deployment of ASICs around subsidized or cheap electricity makes it relatively straightforward for anyone with real resources to pull it off. > Gold is a fancy paperweight that's impractical to use Bitcoin (the core blockchain) can only process about seven transactions per second. Don't tell me gold is impractical! > I have been using bitcoin since shortly after it's inception Yes, and that's the only reason you seem to able to believe these things. Tell me, what can you ACTUALLY buy with Bitcoin without requiring a conversion to fiat currency under the hood? It's not just for tax reasons, it's because it's an awful store of value and would be disastrous for any modern, long-lead supply chain to rely on. > If you can't see it too bad. What I see is a "currency" with such terrible liquidity and deflationary properties that Trump is planning to sell off the US gold reserve to pay out these "Bitcoin billionaires" who would otherwise be totally screwed.
      - r3ctilinear 2y ago
        Since the July 2014 mining pool distribution wake up call (the likely "attack" event you're referring to and blowing out of proportion) Bitcoin mining has become more decentralized and more mindful of safe hash rate distribution. The hash rate has also increased to be 4.5million times stronger(!!!) since then. Winning an arm wrestle against a ~1ZETTA hashes/second distributed protocol with an interest in self preservation is SO not "relatively straightforward" that it's funny. Gold is utterly impractical unless it's paper gold in which case you have limited sovereignty over it. People keep cutting open gold bars and finding tungsten! lololol The TPS works fine for me. So does store of value. So does layer 2 transactions. A new global monetary standard has arrived whether you like it or not.

bufferoverflow 2y ago

BTC is better than gold in many regards. - impossible to counterfeit - trivial to audit - easy to transfer - easier to store - its supply is actually limited (unlike gold, which is near-infinite in the universe). Most of it has been mined. Its supply will actually diminish over time, as keys get lost forever, though it's hard to tell how fast that process is.

1659447091 2y ago
And completely worthless in the event of war with attacks on power grids electronics etc. Gold on the other hand, I could trade for food.
- bufferoverflow 2y ago
  If you are at a war where your whole electric grid and internet and SMS are completely down, you have much bigger problems than currency not working. It means your bank accounts are gone, your credit cards are gone. And how are you actually going to use gold as currency? Walk into a shop and shave off some gold at the checkout? And how will the store owner authenticate that it's actually gold? Bullets will be a better currency than gold in that scenario.
  - lesuorac 2y ago
    I'm not sure war even needs to be that large for it to be a problem. Basically unless its like China vs US then you don't need sell BTC to fund the country (even then I don't think you would; but if you never need to sell BTC its pointless). If China vs US then realistically, China can and probably will cut a lot of the internet traffic between the two. Bitcoin only functions because of the public ledger; if Chinese miners aren't sync'd with non-Chinese miners then you have a double-spend problem and I can't see bitcoin not going to 0 pretty quickly.
  - InfiniteTitan 2y ago
    > And how will the store owner authenticate that it's actually gold? Umm this is a solved problem. Believe it or not gold has been used as currency for thousands of years.

rifty 2y ago

I think the one thing with crypto assets that differs it from other strategic reserve assets is that there is no baseline demand rooted in usage and consumption. If the US was in such an emergency position that it needed to liquidate the crypto, it could be worthless and unmovable because of lack of baseline demand at that time. Although perhaps emergency purposes aren't the only reason to have reserve assets..

cactacea 2y ago

Sold for what though? Dollars of course. But why not just print more dollars in the first place? Gold could be used to make payments directly and I don't see that happening with BTC. This argument still makes no sense, what am I missing.

ahel 2y ago
sold for whatever you want. Supposing the other party wants BTC (wild assumption) and you want 1Mton of lead, I guess the exchange would happen.

alexashka 2y ago

Would bricks of gold really change anything in a dire situation? I don't get it. I'd bet on aligning with people who know how to make use of bullets personally.

tacon 2y ago
Since Russia is loading planes with bricks of gold to pay for imports and evade banking sanctions, they must think bricks of gold are useful in a dire situation.
- defrost 2y ago
  With an obvious drawback highlighted on the 15th of March 2018.
  - harambae 2y ago
    I had to look this one up… “Approximately 3,400kg of gold ingots break free from a Nimbus Airlines Antonov An-12 cargo plane and fall onto the runway at Yakutsk Airport.”