I'm open to the idea that this could be both a good idea and a way to line insiders' pockets with US taxpayer money, but it really just looks like the latter to me.
(I've been able to come up with a few theories but they all involve the complete destruction of value of the US dollar, and I don't understand how that would be net good for America.)
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.
Although perhaps emergency purposes aren't the only reason to have reserve assets..
This argument still makes no sense, what am I missing.
I'd bet on aligning with people who know how to make use of bullets personally.
- 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.
Well let me put it this way.
From the perspective of crypto, crypto doesn't need the government. Honestly, the way eth has been running since the move to PoS, sort of operates with a reserve already. Crypto the technology, crypto the ecosystem does not need this. Its kind of stupid and as the article makes out, would have cypherpunks rolling in graves, unless the US goes the whole hog and converts entirely to crypto (so we can publicly audit bank holdings etc, and the government cant issue money) but that's unlikely. Honestly, adoption should be driven by making crypto more accessible without compromising security, and nothing else.
From the perspective of the government, it might make sense to have a reserve if they were going to do some kind of integration/development of crypto technology. Even if it was just to bring a wafer of stability to the platform while they participate.
However, the people that this benefits the most are the traders, so my cynicism is very high here. What shits me the most is that this brings honest to god sovereign risk to a sector thats meant to be asovereign. What if the next president dumps it all at a loss?
- If the gov knows how to seize and keep it from criminals, then whales capable of controlling the market are reduced
- If the gov ever tries to sell, it will likely be predictable, so more manipulation benefits for those who know how to do it
- Hidden transfer of wealth from any corrupt animal directly into dump's hands without traditional paper trails
- Dump can use it to manipulate his own illegal meme coins
- Eventually it will be "hacked" and gone, definitely not by dumps closest friends who had the keys the whole time
oh by the word upside, that is for one group of people anyway
It's not that a "strategic reserve" is necessary for these cryptocurrencies. It's that holding those maybe be good for the US if their value goes up further and it can use them to buy stuff if need be. Same idea as the gold reserve really.
The first is the reality answer: the CEOs of all these companies (SOL, XRP, and ADA specifically) are directly involved and meeting with Trump officials and senators in order draft upcoming crypto legislation as, as told by ADA's creator[1]. BTC and ETH aren't included here, but they are the two largest and most impactful, recognizable cryptocurrencies already, kind of would be foolish to exclude them.
Secondly, the reason I don't think this is just "pumping insider's bags": from the perspective of a crypto-optimist, these are paradigm shifting technologies that have the potential to revolutionize global financial systems (at minimum). The "strategy" is coming from betting on this being true, and thus these assets will have high(er) value, use, and importance, in the near future. I also don't think the reserve is going to be as large as people might get the impression. Anything in bllions sounds extremely unrealistic.
[1]: https://m.youtube.com/watch?v=xgGTW_GK9vM I highly suggest watching this video. He gives a quite sobering and optimistic take of the situation.
If I'm looking for the promise of "virtually instant, virtually free transfer of value", SEPA and FedNow are delivering it at vast scale without the blockchain woo-woo. Adoption could be broader, but you can hardly say Bitcoin is universal either.
Whether intentionally, or by accident, the crypto space has created assets, rather than functional currencies, and the problems we want to solve with the financial system are usually currency shaped (broad acceptance, stable value, limited number of systems to choose from).
Now, there may be some interesting aspect of creating a new asset class-- it's uniquely "bottled scarcity" without beauty or utility like most other assets have-- but I think we need to get over the "revolutionizing finance" story until it revolutionizes something other than "I need something new to gamble on."
Why wouldn’t the US make up their own Dollar$, outlaw all the others and force everyone to use it ?
But digital currency is made up. It isn't 'needed' for anything. So there is no sense to have a strategic reserve.
The only intrinsic value of crypto is that it can not be unilaterally inflated away, and can be difficult to digitally seize.
In this respect it is similar to gold. It lacks the physical uses of gold, but is easier to transport.
No, I don't think the US government should invest in it. It should make sure it's own currency retains value.
BTC is backed by hopes, dreams and market speculation.
The only difference here is mentioning of specific cryptocurrencies.
Prove? That's a high bar to clear. But this is a spike at merely reiterating a bailout plan.
So do fiat currencies.
On the other hand, people don’t usually transact with BitCoin because of its volatility and because BitCoin’s currency deflation. I’m also almost certain Bitcoin protocols couldn’t keep up with global transactions even if the currency did stabilize. One last point (there are way too many to write them all here) is that there will be no incentive for people to verify blocks when all 21 billion coins are completely mined.
Bitcoin is a game of betting there is a bigger sucker who comes after you. Bitcoin whales realized that the government is the biggest sucker of them all. It’s ironic to me that they have lobbied so hard for the government to subsidize their assets when they have been preaching libertarian idolatry for years.
As more and more "non-speculator" money enters BTC, the swings in the price will decrease. I see the "rainbow chart" as a backing to this theory. It shows how the price has been slowly settling . In 25 years we should have a very stable deflating BTC price.
The whole freaking problem is that crypto turns out to suck absolute cock as a real method of paying for things (Said as someone who has actually paid for items with bitcoin, incl on the OG silk road...)
How many of these folks investing in bitcoin have EVER bought a physical item at a physical store with it? Hell, even online stores... how many of these people are actually using these things as currency, instead of as pure speculation plays?
The answer is a resounding "Almost no one".
They're a complete crap way to pay for anything that's not literally illegal to buy.
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And there is no utility to the coins unless you're either buying things with them, or speculating that you can exchange them for more of a usable currency at a later time. Period.
The sad thing is how this puts more money in the hands of bad people: This is inflating the holdings of shady orgs worldwide. And the way this admin has been bumbling its way into cleptocracy, I fully expect them to lose the keys later in a Mtgox scenario. Nobody will be able to explain how the funds were drained. They'd hired the best smart contract experts from the X roster, what more could they have done?
For the sake of argument, let's imagine a scenario in which, someday, a ridiculously, blatantly corrupt person became President. And Congress was aware, but had controlling majorities that, one way or another, were aligned with this situation. And the Supreme Court had already been started to be stacked by the same person. And various agencies under Executive branch, which might normally be able to push back, were being systematically gutted, and otherwise intimidated, including blatant reprisal against law enforcement officers for even investigating some past corruption case. And let's imagine that some oligarchs bought up a lot of Fourth Estate, and most of the rest of the Fourth Estate was decimated by other oligarch "disruptive tech", and tech oligarchs also control much of the remaining grassroots channels of communication. And lets imagine that, partly due to media manipulation by the oligarchs, the majority of the electorate, of all parties, had forgotten everything that they ever learned in Civics class.
In this totally hypothetical situation-- but please bear with me, and imagine, for the sake of this fun intellectual exercise, that someday this could somehow happen in the US, in theory...
What remaining US gov't checks and balances would there be? How could that corruption scenario be thwarted?
(For example, is there a way for a minority in Congress to successfully bring charges? Does the FBI or some other agency have powers to investigate and intervene, below the radar? Does Judicial have any power to intervene, perhaps if petitioned? Do states have rights to contest the situation? What if there is also a treason angle; does that activate powers from anywhere else in the government to intervene?)
If this scenario was discussed in Civics class, it flew right over my head at the time, but now seems interesting.
/s
Long answer: no, oil is needed for the functioning of our society. Helping smooth price volatility is useful and valuable. On the other hand, BTC is not needed for our society to function, and so there is little to no value in managing prices of it. This appears to be an attempt to hedge against the collapse in the trust in the dollar.
While the Ethereum is arguably decentralized, maybe, kind-of, the other ones: XRP, Solana, and Cardano, are basically centralized nonsense, that at best can be considered a payment system and not a decentralized commodity.
Time will show us that all of them are shitcoins in the end. But don't take my word for it, just wait and see.
The real long term value is and always was due to a trustworthy, sovereign store of value properties. Trying to compete with Visa or Venmo, or enable online gambling is catchy, but does mean anything, as nothing there requires the underlying shitcoin asset. Stablecoins are far better at that, but it's hard to sell a sucker idea that the stabelcoin is going to "moon".
