DANGERS OF THE BITCOIN STRATEGIC RESERVE
Everyone thinks about the price appreciation that nation state stacking brings on, but I’ve seen ZERO discussion of the potential downsides. So allow me be the one to shit in everyone’s cornflakes..
If the US does announce a SBR, Bitcoiners, you know the people who actually give this network value, are going to become targets.
We know:
- other countries will be forced to follow lest they be left behind
- they can’t print BTC
- they can’t tax BTC to accumulate it
- they have required KYC on exchanges in many countries
So what are those other nation states going to do when they realise they have to get their own stack?
They can’t print it. They can’t tax it. They’ve got a few regulated entities with lists of customers who have accumulated it..
Well they’re going to go knock on the exchange’s doors and demand lists of their customers who hold #Bitcoin.
Then they’re going to use the legal system, which they control, to coerce the HODLers to cough up their stacks to the government.
Expect to see: audits from the tax man. Unrealised gains taxes specifically on BTC. New legislation requiring corn addresses be declared or possibly joint custodied with Gov.
When that fails (which won’t take long, months probably); fuckery with HODLers business interests, debanking, travel bans, additional audits, outright bans/caps on individual ownership. M5M will portray greedy Bitcoiners as worse than Satan. Leftists will protest in the streets against them. Running a node will be prohibited by ISPs. There will be hotlines to report Bitcoiners to the Gov for some fiat rewards.
When they don’t get near their stacking target (they’ll all have delusions of grandeur of how they’re going to get some ridiculous % of the network assuming high rates of extraction from Bitcoiners on those lists + some open market ops) they’ll just go full Totalitarian.
Invented crimes with convictions only avoidable if HODLers cough up. Extending the lawfare targeting to family who fucking ignored you and have no corn but are now debanked and having their business destroyed, etc.
Within 1-2 years it will become impossible to hold BTC in nations like Aus, Canada, UK, and across Europe.
Boating accidents won’t cut it in front of judges and your pleas that they’ve shown the man and found the crime will fall on deaf ears - this is existential for the parasites, they’re not going to follow “the rules”.
Yanks will think they’re ok because they won’t face these pressures and their Gov were the “smart ones” who went first.
NO YOU DUMB FUCKS
Bitcoin is valuable because of decentralisation; you’re about to lose that when nation states make it impossible for individuals in large parts of the world to be part of the network lest they be destroyed.
This is the single biggest threat Bitcoin faces and all I see is supposed Bitcoiners cheering it on like the Goldbugs who love it when CBs pump their bags.
Bitcoin managed to cope with El Salvador adopting it. It won’t with the US - the knock ons are going to be immense.
This is not some Whitney Webb skizzopost by someone who doesn’t really understand Bitcoin. This is something I’ve understood for a while and which has fallen on deaf ears whenever I’ve raised it because ppl prefer to think of the bag pumping.
Yeah you’re going to be rich. Bitcoin is going to fork for regulation. You will have lost your allies who would have stopped it but can’t participate because you took the shortcut and they got removed to avoid jail.
If you want to avoid this, then it’s time to start seeing the State as your adversary again. Not your State, all of them. They’re all a problem.
Nation state game theory for Bitcoin, now, is bad for Bitcoiners.
Replies (28)
It's good to be questioning things, but they didn't even buy anything yet. Probably they won't be able to either... They already missed the boat.
I’m not saying the SBR does get up, I’m exploring what happens if it does and that specifically from a non-yank lens.
Yeah, I mean, they will want some fiat backed version of bitcoin, like a stable coin. But I can't imagine in any constellation how that would work. Why would you have money backed money? LOL
All of these risks were known from the beginning. I never thought the mission of separating money from the state would be pulled off without extreme dangers. The reality is that governments adopting bitcoin takes away their ability to print money. If they can’t print money, government will need to be downsized by 95%. That essentially means their death. They aren’t going to go down without a fight.
Whitney does skizopost about Bitcoin because she doesn’t understand it, her writing partner Mark Goodwin does understand it though - read him.
It’s not about a fiat-backed Bitcoin. It’s about a release valve for US Treasuries to cover the US debt.
Stablecoins can be that debt absorber. The US won’t go CBDC which was the path Pocahontas was trying to take them down; it will go stablecoins.
Print debt and have Tether and Circle absorb it, don’t be surprised if Trump creates his own USD stablecoin. Inflate Bitcoin and hold it on the US balance sheet to counter the debt burden and dollarise the world through stablecoins taking the debt on to their books.
please write a novel
Well put. If the US will move first on Bitcoin, the probability of your scenario increases. If another large state moves first, competition will maintain decentralization and keep people’s escape options open, imo. And then, if the Bitcoin attributes survive, Bitcoin will ultimately lead to abundance.
Some potential counterarguments:
* Overestimation of government power:
While governments can exert significant pressure, seizing Bitcoin from millions of individuals globally might be practically impossible.
* The Streisand Effect:
Heavy-handed attempts to confiscate Bitcoin could backfire, driving further adoption and strengthening the network.
* Technological solutions:
Privacy-enhancing technologies (e.g., mixing services, CoinJoin) could make it harder for governments to track and seize Bitcoin.
Nah, a novel ain’t going to fix this.
Nicolas is my inspiration.
Im surprised btw, that Russia hasn’t moved first on Bitcoin. They could take the US out. Any thoughts?
Bitcoiners see decentralisation too statically.
Like, we achieved it, so it’s locked in.
The scenario I laid out shows it’s not locked in and that decentralisation could easily give way to centralisation pressures.
We won’t have key-holding noderunners in jurisdictions who have declared war on Bitcoin and demand it transfers to the nation states balance sheet to compete with the US SBR.
That opens Bitcoin up to major attacks from large US holders who will align with the Gov on forks.
Thanks Herr GPT.
1. Individual governments need not care about HODLers outside their jurisdiction. They will laser focus on their tax slaves and extract from them. That’s what they know, and what they do best.
2. Streisand effect just announces what’s happening. It doesn’t stop tax agents and police from showing up on the doorstep of holders identified through KYC exchanges.
3. Yes, but no. As I wrote, boating accidents won’t be accepted in courts of law when it’s existential to the State. They’ll make HODLers account for very Sat from KYCed exchanges and likely ban travel outside their borders if they think someone is hiding their holdings. You can hide behind mixed coins and not give them up but you can never leave.
Russia is definitely mining.
Their leaders are actually some of the more capable people in power globally despite what western media says. They know it’s better to keep it quiet for now.
Makes sense I guess if people like Rug Pal want to hold stable coins. I certainly have never found a usecase for them.
Rug Pull remains an idiot.
But there’s 8 Billion+ people on this planet. They all want the best money. They don’t understand what that means across all dimensions but they understand the USD is most widely accepted so in their simplified version it suffice.
They’ll take the digital equivalent if it beats their local fiat which is inevitable given where all fiats are headed.
Every major technology innovation permeates all of civilization if it doesn’t it wasn’t major. Once it does no one barely notices it.
Cheers Geoff for describing the world 50 years from now. Very helpful!
Leaving before it's too late is the last resort. But with perhaps only 3-5 years left for Europe, the time to act may be sooner than we think. Let's hope more Bitcoin-friendly havens emerge before then.
You are welcome 🤗
I have also contemplated all of that but I did determine that could happen at the end of the Bitcoin cycle (about 300 years).
I believe that Operation Warp Speed was to get in front of the curve and make the Evil Fuckers trip. They are now the ones on defense and becoming more desperate by the day.
They might be smart and hide behind some good puppet but President Trump stoop on the balcony of the White House and removed his mask to signal to them they were about to be unmasked.
Ever wonder why President Trump likes to refer to the 'Golden Escalator?' The sign at the top behind him read, "Currency Exchange."
Another good troll was he hung a picture to his left of Andrew Jackson the last American president to remove the Federal Reserve.
This is the war waged on the people of the world by the Bankers. You know, the same fucks Jesus flipped shit on in Jerusalem.
This is much bigger than most realize.
Gee, I wonder why President Trump started Space Force?
Good point. Maybe this is the reason for Dept of Government Efficiency. To pave the way for a future with balanced budgets? I don’t know, but now I’m wondering if America will ever be subject to unrealized tax gains on Bitcoin. I mean it’s not far fetched since we already pay property taxes on our houses. I think that’s horse shit. How did we get to this point that we can lose our home that we already paid for including taxes and using money that we earned after already paying income tax for not paying an additional annual property tax using currency that is continuously debased?
Sobering and thoughtful. Considering the State as suspect/your enemy is not uncommon here. What is a plan of action, if miners become centralized, and nodes outlawed, HODLrs debanked and targeted? Get a go bag ready, and prepare to remove to a ₿ friendly country before the end of the year? Seriously, how does an entity plan for such a nightmare scenario?
View quoted note →Whoa! So interesting.
Monero fixes this.
They will run out of Bitcoin but 0.6 monero are made every two minutes.
Governments can’t confiscate because anyone with a pc, laptop, phone, or practically any electronic device can mine it.
They'll probably go after cartels.
Guess they just dumb. Btc is a IQ test.
100% agree. It's one of the reasons Bitcoin OGs moved on to Monero.
Private store of wealth >> publicly known store of wealth. Both inflating at 0.8% per year.
Inflation tax 2 to 5% per year.
All other taxes that become more easy to enforce amount to 20 to 80%.
Premature optimisation for the wrong thing.
You'll need Monero to combat taxes.
