Governments Can and Will Attack Bitcoin
Governments are Centers of Power. Power Tends to Corrupt. All Governments Tend Towards Abuse. Bitcoin Will Be Targeted
Last edited: April 10, 2023
This article is a warning that Bitcoin almost certainly will be brought under full Governmental control during this decade. This conclusion is rooted in 3 premises.
Premises
- In a free market, Bitcoin will outcompete all Government currencies. Bitcoin is an awesome form of money that, if left to the free market, would become the preferred global monetary asset.
- Government is not yours. It has been bought, and it is already global. A relatively small group, of extremely wealthy persons, who share traits that are commonly defined as personality disorders, is using the power of their Trans-National Corporations to direct the policies of Government globally.
- Corrupt governments are threatened by honest money. Bitcoin will be centralized to ensure the global control of people by a corrupt few.
Future articles will be added to this series, more particularly supporting and describing the Who, What, Where, Why, When, and How of global efforts to achieve total control of Bitcoin. The current version of Bitcoin is built on open, honest, egalitarian principles which are at odds with corruption. Bitcoin will be targeted. By the end of the 2020s, only a neutered and greatly devalued version of Bitcoin will be available to the public.
‘Change the Money, Change the World’. Bitcoiner’s Motto, often expressed by Bitcoin spokespersons.
‘Bitcoin Fixes This’. Another, Bitcoin Motto
Readers may hope that I’m wrong about corrupt people controlling Government. However, nothing in this article would surprise the founders of the U.S. or the many hundreds of leaders who have continually warned the public about the danger of private control of the government.
The Global Plan for Bitcoin
Near the middle of this decade, there will be a global financial crisis. New government-issued digital currencies will be promoted as the solution. The financial crisis will be used as justification for requiring the public to use Central Bank Digital Currencies (CBDC). In order to eliminate alternatives to government-controlled CBDC, the use of Bitcoin will be severely limited and heavily taxed. Multiple decentralized exchanges and peer-to-peer transactions with Bitcoin will be declared unlawful.
When diehard Bitcoiners persist in using Bitcoin as their preferred currency, Governments will shut down uncooperative Bitcoin companies and begin to seize Bitcoins used illegally. Ultimately, governments will use a form of 51% attack to control the entire Bitcoin network. Multiple nations will coordinate regulation over the majority of the Bitcoin mining hash rate. By regulating the majority of the Bitcoin mining hash rate, governments can control the entire Bitcoin blockchain -and thereby control all Bitcoin transactions, globally.
Global officials already use their control of the mass media to manipulate the public’s perception of and discourage the public’s use of, Bitcoin. Manipulation of the Bitcoin financial markets is also used to discourage public participation. Burdensome regulations, increasing taxation, and the coming criminalization of ever more transactions will be effective in slowing Bitcoin adoption, -but will not stop it.
The approaching array of media, market, regulatory and criminalizing attacks, will be more effective at slowing Bitcoin’s adoption than many Bitcoin users perceive. Yet, the issuance of CBDCs will also increase demand for individual control of money. Legal actions to limit Bitcoin will be less effective than government officials desire. It was designed to be decentralized, peer-to-peer, trustless, immutable, permissionless, and borderless.
My Government Couldn’t -Its “Unconstitutional”, or Wouldn’t …, Are the Faulty Premises of Many Bitcoin Faithful. It’s Not Your Government
People who claim that nothing can stop Bitcoin, or declare that Bitcoin cannot be banned, underestimate Bitcoin’s enemy. The Governments of today have been corrupted through traditional means -bribery, extortion, murder, and mass murder. Government is no longer ‘of the people’ nor even controlled by the people’s representatives. Our Governments are not even national, except in appearance. Your government has been bought, and it is global.
Global government is controlled by a small group (an Oligarchy). When the Oligarchy controlling government is extremely wealthy, a more specific term is Plutocracy (Government by the very wealthy). Those with extreme wealth are always a small group. The current ruling Plutocracy directs policy through the financial power of their Trans-National Corporations. A more specific term for government by a small group of extremely wealthy individuals who direct government through Corporate influence is Corporatocracy (rule by Corporate interests). However, when the individuals who direct the Corporatocracy share a personality disorder, the more specific term for their rule is a Pathocracy (Control of Society by persons with a personality disorder).
Today pathocrats are directing government globally. Demonstrations will not deter their policies. They do not yield to public pressure. Nor can they be removed by the political process. Those who seize power through corrupt means cannot be voted out of power. The corrupt yield only to superior power. People who want Liberty (or honest money), must either physically fight for their freedoms or endure ever-increasing injustices at the edict of their masters.
Realism Regarding the Ability of Governments to Control Bitcoin
This series of articles is presented to encourage realism. Bitcoin has prospered tremendously and may continue to do so -for a limited time. However, the ruling Pathocracy will act to defend its monetary monopoly. When government officials act to control Bitcoin, reliance upon mere memes of Bitcoin invincibility will be dangerous to one’s financial health. Technology is never the source of freedom or security. Personal freedom and security rest on our will to act as needed to secure them. The requirement for people to act is stated as the “Risk Sharing Principle” https://github.com/libbitcoin/libbitcoin-system/wiki/Risk-Sharing-Principle in Eric Voskuil’s book Crypto Economics.
The Bitcoin monetary system can be successfully attacked, in multiple ways as shown in this article.
However, governments specialize in regulation. The U.S. Government has written over 100,000 pages of regulations. During this decade (2020’s) the U.S. will coordinate regulation of Bitcoin mining with other governments because controlling Bitcoin mining is the known way to control all Bitcoin transactions without destroying the network.
“An attacker in control of the majority of the network’s hash rate is capable of manipulating the system at will, i.e., executing double spending attacks, prohibiting transactions from entering the blockchain, and effectively rewriting the transaction history within computational limits.”
From the Introduction to A Deep Dive into Bitcoin Mining Pools an Empirical Analysis of Mining (2019)
Eventually, the U.S. will seek to control the current version of Bitcoin by coordinating regulation over the majority of the Bitcoin mining hash rate.
A Review of Likely Attack Vectors
Each of the following actions can, and likely will, be done by the government. The initial actions of governments will merely slow Bitcoin adoption via media and market manipulation, taxation to limit the profitability of Bitcoin and regulations to limit certain transactions. These actions will be insufficient to control the Bitcoin network. The Bitcoin network will grow despite these limiting actions by governments. However, ultimately, the governments of the world will cooperate to regulate Bitcoin mining.
1. Governments Use the Media to Manipulate the Bitcoin Narrative Globally
Governments have declared their distaste for Bitcoin. They use mass media to discourage public acceptance of Bitcoin. Governments can render Bitcoin unacceptable to much of the public via media. While media manipulation cannot shut down Bitcoin, a well-coordinated global media attack can destroy much of Bitcoin’s value and overt desirability.
Through manipulation of the mass media, governments create a public narrative for Bitcoin. By combining media and market manipulation, the price of Bitcoin is moved erratically. Recently (Jan 2021), mere tweets by Elon Musk were sufficient to move the price of Bitcoin 20% in just minutes. When the public becomes intimidated by Bitcoin volatility, they seek the “safety” of a government currency.
The sudden appearance of stories from ‘reliable inside sources’ describing previously undisclosed Bitcoin problems is able to move the price steeply. Whether true or not, an organized media blitz describing how a new vulnerability to hacking has been discovered, better tech has now been developed, or how Bitcoin will soon be outlawed, etc., all can cause major price swings. Merely publicizing that a congressional hearing has been scheduled to discuss how to outlaw Bitcoin, would move the Bitcoin price steeply.
Government’s have a long history of using media manipulation to convince their citizens of great falsehood, like the need to go to war: 1931 -when Japanese needed an excuse to invade China they fabricated what’s known as the Mukden Incident, the destruction of a railroad line in Manchuria; 1939 -the Germans needed an excuse to invade Poland, so they fabricated what’s known as the Gleiwitz Incident, dressing up German soldiers in Polish uniforms to make it look like the Poles were the aggressors; 1941 Roosevelt wanting to enter WWII provoked and hid the Japenese attack on Peal Harbor; 1964 -the United States needed an excuse to go to war in Vietnam, it fabricated an attack on one of its ships (USS Maddox) off the coast of N. Vietnam; 1991 -when the U.S. wanted to go to war in the Gulf, it circulated the story that Iraqi soldiers were taking Kuwaiti babies from their incubators in hospitals and putting them on a cold floor so they could send the incubators back to Iraq; 2001 -when the powers that be needed an excuse to invade Afghanistan, they destroyed the Twin Towers & Building 7 of the WTC and blamed Islamist terrorists.
Current events demonstrate that media is subject to coordinated Global manipulation. Global media can be used to convince the public of astounding unreality -such as we are in imminent danger and must therefore give up our jobs, our mobility, and our freedom of group association.
Media manipulation is a standard tool of government control. It is demonstrably powerful enough to completely rearrange society, it is being used to greatly limit public acceptance of Bitcoin.
2. Governments Manipulate the Bitcoin Price in the Financial Markets
Governments enter the Bitcoin market with fiat currencies to financially manipulate Bitcoin’s price. Price manipulation is likely to be heaviest, during the coming global financial crisis. Extreme losses in crypto from a preplanned liquidity crisis combined with heavy price manipulation will accompany media attacks intended to make the public wary of extreme Bitcoin volatility -and to justify increasingly severe government regulation.
The U.S. government allowed Bitcoin to develop with little market interference until the Bitcoin futures market was opened in late 2017. Since then, futures aid the Government's use of fiat currencies to whip-saw the Bitcoin price to create intimidating volatility in the Bitcoin price and encourage the public to return to the “safety” of the government currency.
Agencies of the U.S. Government are experienced in manipulating all asset classes, including assets that are far greater in market capitalization than bitcoin. Currencies, as well as the countries which print them, are manipulated by the U.S., its military, and by IMF Loans, See, ‘Currency and Coercion, by Jonathon Kirshner.
The U.S. bond market is manipulated. As is evident from today’s unnaturally low and negative interest rates. See the article, ‘How the Fed Took Control of the Economy’, Dion Rabouin, author of Markets. The U.S. Stock Markets are directly manipulated by the Working Group on Financial Markets -also known as the “Plunge Protection Team” (consisting of the Federal Reserve Bank, the U.S. Treasury, the U.S. Comptroller of Currency, and the FDIC)
The U.S. Real Estate market is manipulated by the Federal Reserve Bank’s control of Interest Rates, as well as by the policies of Fanny Mae, Freddie Mac, USDA, and HUD, ‘Housing, the Most Manipulated Market in the World’. The Gold price is manipulated by Banks and by the London Gold Pool https://www.gata.org/. Compared to these huge asset classes, manipulation of the much smaller Bitcoin market would be child’s play. The creation of bitcoin futures contracts and the coming exchange-traded funds (ETFs) provide large additional avenues for governmental manipulation of bitcoin’s price and utility.
3. Governments Discourage Bitcoin Adoption & Reduce its Utility with Taxation, Regulation, and Legislation
In order to contain Bitcoin, Governments will increasingly turn to their standard tools of financial control; taxation, regulation, and legislation. The government can tax Bitcoin into unprofitability, regulate Bitcoin into undesirability, and legislate Bitcoin into the black market. These actions should be expected.
Taxation to Control Bitcoin
Government can tax Bitcoin towards unprofitability. Bitcoiners often fail to realize that during this decade, Taxation is becoming Global.
“Treasury Secretary Janet Yellen has proposed that governments around the world require payment of at least a uniform “global minimum corporate tax.” A motivation for Yellen’s push for a global minimum corporate tax is fear that the Biden administration’s proposed increase in the US corporate tax will cause some American corporations to flee the US for countries with lower corporate taxes. … Yellen’s global corporate tax proposal will no doubt be supported by governments of many European Union (EU) countries, as well as the globalist bureaucrats at the Organization for Economic Cooperation and Development (OECD). For years, these governments and their power-hungry OECD allies have sought to create a global tax cartel.” Ron Paul ‘Global Taxes — Global Stagnation April 12, 2021
The World Economic Forum is also studying how to tax cryptocurrencies. A WEF Forum was held on April 6th, 2021, for this reason.
“Digital trade has flourished in the pandemic even as governments enacted over 100 new digital taxes.” The World Economic Forum ‘Taxing Digital Value’
Regulation to Control Bitcoin
Increasing regulation is coming to Bitcoin.
“President Trump’s Working Group on Financial Markets released a report that said stable coins should meet the same regulatory standards as other aspects of the financial system. “They could become systemically important overnight,” Powell said. “We don’t begin to have our arms around the potential risks and how to manage those risks. The public will expect that we do and has every right to expect that. So that’s something that we’ve been working on with our colleagues around the world.”
The U.S. House of Representatives passed H.R. 1602, which will,
“… establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation,” Eliminate Barriers to Innovation Act of 2021
The bill requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to establish a working group focused on digital assets.
Legislation to Control Bitcoin
Governments will increasingly declare various uses of Bitcoin to be unlawful.
As governments learn that taxation and regulation of exchanges are insufficient to stop the growth of Bitcoin, they will outlaw key uses of Bitcoin.
When U.S. President Franklin D. Roosevelt feared that physical gold could replace the U.S. dollar, he outlawed gold. The Fed explained, “Individuals and firms preferred holding metallic gold to bank deposits or paper currency.” With a single executive order, FDR forced Americans to turn in their gold savings. Roosevelt made gold ownership illegal for all Americans and punishable by up to 10 years in prison.
Legislation can be used to slow down Bitcoin adoption, but even heavy taxation, regulation, and increasing legislation will not destroy Bitcoin.
“The entire point of Bitcoin is to neutralize government controls on money, which includes Anti Money Laundering (AML) and taxes.” Joe Kelly in his article, ‘How To Kill Bitcoin (Part 1): Is Bitcoin ‘Unstoppable Code’?”, (July 8, 2020)
Governments will tax, regulate and legislate Bitcoin globally.
4. Governments Can Shut down Exchanges and Seize all Bitcoin found Online -Even from Private Wallets
Governments have a greater ability to seize the public’s Bitcoin than most Bitcoiners realize. Governments can seize all Bitcoin on regulated exchanges and they will be able to seize Bitcoin from private wallets that are online. The more Bitcoin threatens the government’s monopoly on money, the greater motivation government will have to act.
Severe government regulation of Bitcoin will then result in a growing black market of unlawful transactions. Depreciation of the fiat currencies will increase the utility of Bitcoin. Eventually, Bitcoin will be seen as an imminent threat to State currencies. Governments will then preserve their monopoly on money by forcing Bitcoin onto centralized exchanges which government can control. They will criminalize and shut down unregulated Bitcoin exchanges, and seize Bitcoin from unlawful exchanges. The U.S. Government can record private keys that were created online, and use those private keys, as well as back doors, to seize Bitcoin from popular cryptocurrency wallets.
Even after fair notice is given of an impending change in Bitcoin’s legal status, tens of Billions of Dollars worth of Bitcoin will remain in unregulated wallets and on decentralized exchanges. Governments will then begin to seize Bitcoin used in violation of the law. The U.S. Government can record private keys that were created online, and use those private keys, as well as back doors, to seize Bitcoin from popular cryptocurrency wallets. Seized Bitcoin will provide the government with increased leverage to manipulate the Bitcoin market.
Much of the Bitcoin community has made the erroneous assumption that governments cannot seize Bitcoin from the online wallets of private citizens. Government Intelligence Agencies can push “Security Updates” globally to online wallets which record for the government all cryptographic “seed phrases” and “keys” entered by Bitcoin holders. The governments can also require back doors, or surreptitiously install backdoors on hardware wallets.
“The NSA has extreme computers, working in tandem. They scrub every bit of data on Earth every second of every day. The computers are essentially supercomputers, about the size of a DVD player, stacked up 12 feet high, in rows like a giant library inside an enormous warehouse. There are 1,000,000 square feet of these libraries/warehouses of extreme computers. The complex is so large vehicles are required for crossing the warehouses to do maintenance. …. “ Bill Bray paraphrased -Former Research Scientist at Central Intelligence Agency, Ph.D. Physics & Chemistry, Princeton University (Graduated 1962) (Retired) Updated September 24, 2019
Bill Bray further describes how deeply the U.S. Government is already in our devices.
“Use three different system cleaning apps on your pc with the Wi-Fi turned off, including cleaning your registry files. Turn the Wi-Fi on and just go to (the) Yahoo homepage. Your computer will stall for a few minutes. Turn wifi off, close the browser. Run the cleaners again. You will have two thousand tracking programs and about 350 MB DATA dumped onto your hard drive and operating system.”
“If you turn handshake, cookies, off, you cannot connect to any sight. The idea that 350MB, in the form of two thousand security files that ‘track’ your movements is just a normal computer thing is quite absurd. On your cell phone it is the same, clean it, connect, and run the cleaner again, half a gig of tracking software [will be] dumped onto your cell; this time tracking every spoken word.” Bill Bray, on Quora.com, ‘Did CIA Director William Casey really say, “We’ll know our disinformation program is complete when everything the American public believes is false.”.
The following is an excerpt from a Reddit discussion hypothesizing a possible scenario by which government could seize bitcoin.
“The software distributed in the recent security updates pushed to your device was developed by the NSA,”
“As corporations based in the United States, we were ordered to comply with Executive Order #6820 which was shared publicly by the White House today. The software distributed in the recent security updates pushed to your device was developed by the NSA, and we were ordered to proceed in distributing this as a critical security update to every device that our update procedures had access to, globally. The NSA’s software was in binary form, so we did not know in advance the purpose nor the capabilities of that software.”
“U.S. Treasury announcement, July 31, 20??”
“The recent operating system updates for computer servers, desktops, and mobile phones have software that has scanned files, intercepted keystrokes, and performed other actions such that any cryptocurrency seeds and private keys found were used to transfer those funds such that they are now securely in the hands of the U.S. Treasury. You may use the following form to submit a claim for the value of those coins, which we will verify and then forward your claim to the government of your country for processing. If it is their policy, they will then reimburse you (at our expense) in your country’s currency, at the conversion rate of $XXXXX USD per bitcoin — the rate at which bitcoin was trading when the seizing of cryptocurrency assets occurred.”
“Signed: Microsoft (Windows); Google (Android, Chrome OS); Apple (iOS, Mac OS X);”
5. Governments Will Regulate Bitcoin Mining Companies -For Total Control of Bitcoin
Eventually, Western Governments will tire of regulatory and criminal restrictions on Bitcoin. They will seek full control of the Bitcoin network. Multiple leaders believe that governments will attack Bitcoin to preserve the government’s monetary monopoly. (Ray Dalio, Dr. Ron Paul, Michael Burry, Steve Forbes, E.B. Tucker, Ricardo Salinas, etc.)¹[1]
However, the destruction of Bitcoin is unnecessary and unlikely because governments have the ability to turn Bitcoin’s ‘immutable’ record of transactions into a tool of government control that is nearly equal to Central Bank Digital Currencies -even while Bitcoin provides the appearance and brand of being a free market alternative.
Multiple governments will fight Bitcoin as a common enemy. The major nations of the world hardly function as separate countries anymore. The globe has become one gigantic 100 Trillion dollars a year business venture. Governments will coordinate their regulation over the companies and individuals that own the majority of the Bitcoin mining hash rate until the governments control the entire Bitcoin network.
“An attacker in control of the majority of the network’s hash rate is capable of manipulating the system at will, i.e., executing double spending attacks, prohibiting transactions from entering the blockchain, and effectively rewriting the transaction history within computational limits”
From the Introduction to: A Deep Dive into Bitcoin Mining Pools an Empirical Analysis of Mining (2019)
Control of over half of Bitcoin mining is known as a 51% attack. There are multiple methods a major government could conduct a 51% attack (control the majority of the hash rate. Contrary to popular Bitcoin lore, there are multiple Governments with the resources to create a sufficient number of new Application Specific Integrated Circuit (ASIC) computers to control the majority of the Bitcoin hash rate²[2]. However, it is unnecessary for governments to create any new ASICs. All the ASICs needed to control the network already exist. To control Bitcoin a group of governments needs only to co-opt a majority of the existing ASICs.
A governmental attack on Bitcoin would amount to financial warfare. Combatants in war, cannot expect their opponent to ‘fight fair’. Instead, a government war on Bitcoin will be a Full Spectrum, Asymmetrical attack, using Divide & Conquer techniques, involving Overwhelming Force, that would include Government cutting off financial and material resources, including cutting the power to existing miners, as well as co-opting key personnel within the mining corporations with bribery and extortion. Governments have the authority to make mining corporations wealthy or bankrupt them and put the owners in prison (take our silver or receive our lead). The U.S. government in particular is adept at bribing, coercing, and confiscating the resources it needs.
Simpler still, Governments can, and likely will, regulate the existing hash rate in a manner that requires the majority of miners to only confirm transactions from regulated exchanges.
An attempt by governments to control the majority of the Bitcoin hash rate does not need to be made secretly or suddenly. A 51% attack by the government will be just as effective if the government’s intent is well advertised in advance.
“The basic idea is that announcing the plan of attack openly, ahead of its actual execution, is a key, impactful step. If you introduce information into the ecosystem that shows Bitcoin is on a trajectory towards becoming dysfunctional in e.g. 6–12 months because of the course of action you’re going to take, people have to evaluate that information now and take appropriate action to protect their interests long before the attack itself actually manifests.” Joe Kelly in How To Kill Bitcoin (Part 3): No Can Defend, And The General Theory of Destroyment of Interest in Money (May 29, 2021)
“The current estimate of …. how much it would cost to shut down the bitcoin network, …the forgone bitcoin [value of bitcoin that could otherwise be mined], … -if for example, China were to decide simply to start mining empty blocks and … releasing empty blocks into the system, continually presenting them to the nodes who would refuse them, but [would be] unable to prevent the processing from going forward, -the total cost of that is around seven billion dollars a year.” Mike Green, at minute 16 to 17, of YouTube Video, Labeled “The Best Bitcoin Debate Ever Recorded (Anthony Pompliano vs Mike Green)” at Min 16 to 17:30.
6. Governments Will Digitally ID Citizens to Control Online Transactions.
The individuals who direct governments intend to impose new digital identity laws upon the public, along with Central Bank Digital Currencies. The combination of Digital IDs and CBDCs will give governments total control over each person's internet access as well as complete control of their finances. These new government tools will greatly aid the ability of governments to control alternatives to Bitcoin. Digital IDs will make it difficult for most people to access or use the new versions of Bitcoin and the alternative coins that will spring up when governments regulate the majority of Bitcoin mining.
Summary: A Government Attack on Bitcoin is Coming, Freedom Requires Shedding the Blood of Your Oppressor.
Governmental power is a real and looming danger to Bitcoin. Any monetary system which significantly outcompetes the existing government monopoly on money should expect to be attacked. The centralization of mining in the current Bitcoin network makes it vulnerable. Control of the Hash Rate = Control of every transaction.
“Nobody’s ever defended anything successfully, there is only attack and attack and attack some more.” George S. Patton, General, U.S. Army WWII
Governments have the power to destroy much of the public’s desire for Bitcoin via media manipulation, and the power to destroy demand for Bitcoin’s value with market price manipulation. The government has the power to greatly limit Bitcoin’s utility and desirability through taxation, and regulation, and the governments can legislate Bitcoin into the black market. The U.S. Congress has already considered criminalizing; certain bearer instruments (like Bitcoin), along with money service businesses, money concealment activities, closely related transactions, conduct in aid of such transactions, concealment of account ownership, and concealment of the source of funds. Governments can freeze assets upon arrest for, or even upon mere suspicion of, any financial activity it declares to be unlawful.
Governments can confiscate bitcoin from the central exchanges and can seize bitcoin from online wallets through its snooping software and hardware backdoors. Ultimately, Governments have the power to seize control of the Bitcoin blockchain via direct or asymmetric attacks on Bitcoin’s network of mining computers. Governments may already have back-door access to the majority of Bitcoin ASICs.
The Bitcoin Idea Will Live On
When the Bitcoin blockchain is corrupted, all is not lost, at least not permanently. As multiple Bitcoin proponents have reminded us,
“You can’t kill an idea. Bitcoin extends beyond code, it’s a mindset. … Ideas are bulletproof.”
Dan Held, in ‘Can Governments Kill Bitcoin’ (Nov. 19, 2020)
The current version of Bitcoin can be stopped or controlled by governments, but Bitcoin’s idea of removing money from the control of the government will not die. Bitcoin’s awe-inspiring idea of honest money, along with the fundamental human impulse for justice -will ascend. The idea of a decentralized, permissionless, hard currency is now with us forever.
“To believe that all the people in the world that have adopted bitcoin for the financial freedom and sovereignty it provides would suddenly lay down and accept the ultimate infringement of that freedom is not rational. … A government can marginally restrict access, or even make possession illegal, but it cannot make something of value demanded by a broad and disparate group of people magically go away.”
Parker Lewis in ‘Bitcoin Cannot be Banned’ (Nov 8, 2019)
While that is a pleasant thought, Governments have already demonstrated, often and harshly, that the freedoms of the public must be subordinated to the dictates of government. Bitcoin is an idea whose time has -started. Bringing that idea to reality will require a fight.
“Bitcoin is not secured by blockchains, hash power, validation, decentralization, cryptography, open source or game theory — it is secured by people. Technology is never the root of system security. Technology is a tool to help people secure what they value. Security requires people to act. …”
Eric Voskuil, the “Risk Sharing Principle” of Bitcoin
“The only winning move is to play.”
_______________________________________________
[1] Commentators who have stated that government is likely to limit Bitcoin.
Ray Dalio,
“Like back in the ’30s in the war years … cash and bonds were such bad investments relative to other things, there was the movement to those other things still, and then the government outlawed them … They outlawed gold,…That’s why also outlawing bitcoin is a good probability. …“they also established foreign exchange controls, because they don’t want the money to go elsewhere.” … “every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control,” https://news.bitcoin.com/billionaire-hedge-fund-manager-ray-dalio-government-outlawing-bitcoin/
Ron Paul, “The government is the threat,” he said, noting that “they will crack down because they have the ability to do it.” https://news.bitcoin.com/ron-paul-warns-government-crackdown-bitcoin/
Michael Burry, (of The Big Short)
“Prepare for inflation.” … “In an inflationary crisis, governments will move to squash competitors in the currency arena. $BTC #gold” … “I don’t hate BTC. However, in my view, the long term future is tenuous for decentralized crypto in a world of legally violent, heartless centralized governments with lifeblood interests in monopolies on currencies. In the short run anything is possible — why I am not short BTC.” https://news.bitcoin.com/big-short-investor-michael-burry-governments-squash-bitcoin/
Steve Forbes,
“… a far bigger story is brewing, which will rock the worlds of politics, economics and finance: the attempt by governments and central banks to crush digital currencies with taxes and regulations so that they don’t become alternatives to government money, such as the dollar and the euro. … Politicians and central bankers will fiercely fight to preserve their currency monopolies.” https://www.forbes.com/sites/steveforbes/2021/02/18/bitcoin-warning-are-we-headed-for-a-cryptocurrency-war/?sh=5112558066ce
E.B. Tucker,
“And several high-ranking officials and intellectuals have warned of the dangers of private cryptocurrencies. … What all these global elites agree on, however, is that the only cryptocurrencies that should be allowed to survive are the ones backed by governments.” https://www.rogueeconomics.com/bill-bonner-diary/why-the-government-will-outlaw-bitcoin/ ;
Ricardo Salinas,
“The countries that have a central bank. … The central bank is like the holy temple of the bureaucrats. And the high priests of this religion, the fiat religion, live in that temple. And they make a good living off of that religion. And they are not going to let it go. Under any circumstances they are not going to let go. So its rather naïve … to hear people (say) awe there is going to be a (monetary) revolution and then more countries are going to adopt it. …. Things get done because it is in the interests of the guys in power for it to happen or not to happen. And this adoption of Bitcoin is not in the interests of the powerful for it to happen”
https://www.youtube.com/watch?v=CvnZvdgPdww at minute 23:35
Nothing in this analysis is intended to promote the idea that governments (or the persons behind them) are all-controlling. The reach of all governments is limited. Unfortunately, due to mining centralization, the reach of the government is long enough to control or destroy the current version of Bitcoin.
[2] Computing Power Needed for 51% Attack
The computational power of the Bitcoin network is formidable. The verification of Bitcoin transactions (bitcoin mining) is done by over 5 million Application Specific Integrated Circuit computers (ASICs). The network of Bitcoin mining ASICs together produces 200 quadrillion Hashes per second. https://bitcoincharts.com/bitcoin/ The Bitcoin mining network is calculated to have many times greater computational power than all known supercomputers in the world. https://www.top500.org/ This is an estimate since Bitcoin mining calculations (hash rate) can only be approximately compared with Floating Point Operations per Second (FLOPS), which is a standard measure of supercomputer performance. As of April 2, 2021, the performance of the Bitcoin mining network was rated at just under 81,000,000 petaflops.
The cost to purchase and install sufficient new computers to match half the hash rate of the Bitcoin mining network (April 2021) is estimated to be nearly $10 billion. Source -www.Brains.com How Much Would it Cost to 51% Attack Bitcoin?; -An explanation of 51% attacks.
Even if the cost of acquiring sufficient Bitcoin miners to control the blockchain was an order of magnitude higher (i.e. closer to one hundred billion dollars than to ten billion), $100 billion is hardly a challenge for a major government. It amounts to just over 5% of the most recent U.S. stimulus package. Conducting a 51% attack is clearly within the means of multiple governments.
