Comment by nly | Hacker News Reader

Comment by nly | Hacker News Reader

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Nothing, putting aside that it's too volatile to be a 'good' store of value, the US could wipe out Bitcoin very quickly:

1. Introduce FedCoin - a compatible fork of Bitcoin pegged to the US dollar by the Fed.

2. Ban all US companies and citizens from buying, selling, exchanging, or trading in, alternative cryptocurrencies (such as Bitcoin).

3. Set the initial Fedcoin difficulty lower or comparable to Bitcoin, but peg the initial price higher in USD (the Fed can do this because they can print unlimited dollars).

4. Watch as every Bitcoin mining operation on the planet leaves Bitcoin in droves to mine FedCoin.

5. Watch as all but the diehard US holders of Bitcoin sell, causing the price to crash (further disincentivizing miners)

This isn't entirely dissimilar to how the US destroyed the Gold market to hoover up all the Gold in the early 20th century.

Interesting scenario. Would miners in other countries mine FedCoin though? It seems unlikely that people in other countries would stop using Bitcoin entirely.

To kill Bitcoin entirely the Fed would likely have to convince the FedCoin miners to periodically launch 51% attacks against the Bitcoin blockchain.

The government could also just announce they're imprisoning anyone who owns Bitcoin. Coinbase, Kraken, Gemini, Grayscale all shut down overnight. Everyone rushes for the exits and drives the price down below $1. If it is ever to return it would be as an illegal product.

Now I don't think this is going to happen just because enough people in government own BTC at this point, but it's not impossible. And it has nothing to do with the resilience of the computing network. You could mine Bitcoin over TOR or I2P to keep the network alive but it won't matter.

No need to setup another fedcoin. They can just pump and dump bitcoin directly at will like they do with gold. they could short it to oblivion whenever they want, and accumulate as much as they want whenever they want.

Imagine a state actor that develops quantum computing technology, then proceeds to mine and sell massive amounts of cryptocurrencies into the market in order to destabilize and destroy any value.

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