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Comment by yazaddaruvala | Hacker News Reader

If the US gov collected taxes in BTC and funded its budget in BTC and borrowed its loans in BTC and paid that interest in BTC,

Then the US gov would have the ability to control the circulating supply of BTC.

Think of it this way, BTC caps out, then the US gov HODLed 50% of all BTC for an uncertain amount of time (call it a decade). The rest of the world starts to take risks accordingly and make investment strategies based on “no possible inflation, because BTC”.

After a decade+ of BTC HODL policy the US gov decides to release 5% it wouldn’t be “printing BTC” but it would still certainly be “quantitative easing” and the extra supply of BTC would result in very much the same inflation as we see today.

There is no scenario where the largest governments of the world cannot directly control the supply of circulating money! (Which is the only money that really matters).

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Governments would have some control, much like large holders of an asset have a significant impact on its value by e.g. selling it all at once (see binance selling their FTT all at once). What they would not have is the ability to double the supply of the currency in 2 years for no apparent reason.

Sure they do, they can just make a new cryptocurrency, say BritCoin, and mandate it's use for paying taxes and getting paid and receiving pension.

You know, like they already do with this whole "fiat money" thing.

This is one of the reasons for the schizophrenic posture of Bitcoin maxi's toward government adoption - thus Central Bank adoption - of Bitcoin as legal tender, a la El salvador. I mean apart from the fact that this happening on a global scale would make them stupendously wealthy. But from a pragmatic standpoint, they also know that one advantage Bitcoin does not have, that fiat does, is an armed gang with orders to enforce its use by all citizens. Yet.

> one advantage Bitcoin does not have, that fiat does, is an armed gang with orders to enforce its use by all citizens.

Nail on the head!

The only difference between "tokens" and "currency" is an army and taxes!

Is even that a difference?

Countries don't all use their own currencies (and I don't just mean the Euro zone, this also happens with USD and used to happen with GBP), but they do all have their own taxes. Some countries don't have any armed forces unless you count the police. And the force of law is enough of a threat to get people to hand over crypto keys when they're physically in the relevant jurisdictions and the law enforcement makes that demand.

> Countries don't all use their own currencies

Sure. I think this missed the point.

I didn't say/intend "a country / army needs to be backed by a unique currency"

I said, "For a token to be a currency, it needs to be backed by [at least one] army and [at least one country's] taxes".

e.g. The Euro happens to be backed by multi armies and at least Germany's taxes.

> Some countries don't have any armed forces unless you count the police.

Again, it isn't "their army" but it is "an army". e.g. Liechtenstein is backed by "Austria and Switzerland under an informal agreement among the three countries." https://en.wikipedia.org/wiki/List_of_countries_without_arme...

Anyways, if we disagree that is ok too. All of this is quite fuzzy really.

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