Chris Hayes broke down a plan by Republican legislators to transfer billions of dollars of taxpayer money to owners of Bitcoin in exchange for their holdings.
Here’s the thing … if there aren’t buyers enough to maintain the price, the paper value isn’t correct. This is an artifical scarcity, and this bill would be a bail out to the rich and leave the US taxpayers holding the bag when the market crashes. The US taxpayers would then own all this bitcoin with no way to sell without crashing the market so it’s just a direct transfer of wealth to the current holders.
Bitcoin does have artificial scarcity, though. There can only ever be 21 million in existence under the current protocol. Nearly 20 million have been released through mining, so there are only a little over 1 million left to mine. (There’s that number again…)
Yes, Bitcoin is an open-source project and anyone can modify the code, but the network operates based on all the mining nodes accepting the same rules. If I were to run a node that changes the rules to mine more BTC out of thin air than the protocol allows, other nodes would just reject it. Changing the 21 million limit would involve getting all these miners to decide to change that code, and why would they do that, when it would dilute the coins they have already mined?
I agree with you, though, that it is too risky for the US Government to keep BTC in reserve. It’s price widely fluctuates, it has reached $100k but is probably going to be valued at less then $50k at some point in Trump’s term. It will also be valued at more than $200k at some point during Trump’s term. Speculators are betting on which will come first. The US Government shouldn’t be involved at all.
There is no such thing as a “correct” value. That’s just market ideology - believing that there’s some “objective” price that will eventually prevail.
If everybody sold their stock in any company at the same time, the market would collapse. The price at exchanges just represent how much people are willing to buy/sell at the current time. This is constantly changing based on endless, objective and subjective factors.
Here’s the thing … if there aren’t buyers enough to maintain the price, the paper value isn’t correct. This is an artifical scarcity, and this bill would be a bail out to the rich and leave the US taxpayers holding the bag when the market crashes. The US taxpayers would then own all this bitcoin with no way to sell without crashing the market so it’s just a direct transfer of wealth to the current holders.
Bitcoin does have artificial scarcity, though. There can only ever be 21 million in existence under the current protocol. Nearly 20 million have been released through mining, so there are only a little over 1 million left to mine. (There’s that number again…)
Yes, Bitcoin is an open-source project and anyone can modify the code, but the network operates based on all the mining nodes accepting the same rules. If I were to run a node that changes the rules to mine more BTC out of thin air than the protocol allows, other nodes would just reject it. Changing the 21 million limit would involve getting all these miners to decide to change that code, and why would they do that, when it would dilute the coins they have already mined?
I agree with you, though, that it is too risky for the US Government to keep BTC in reserve. It’s price widely fluctuates, it has reached $100k but is probably going to be valued at less then $50k at some point in Trump’s term. It will also be valued at more than $200k at some point during Trump’s term. Speculators are betting on which will come first. The US Government shouldn’t be involved at all.
There is no such thing as a “correct” value. That’s just market ideology - believing that there’s some “objective” price that will eventually prevail.
If everybody sold their stock in any company at the same time, the market would collapse. The price at exchanges just represent how much people are willing to buy/sell at the current time. This is constantly changing based on endless, objective and subjective factors.