Out of interest what would stop say the FED or IMF etc from buying most of the bitcoins and removing them from the market since there will only ever be 21 million created? 1 billion dollars is nothing for them to do so. Because if i was them i would do either; 1) buy them all up over time and never use them, thus killing it. or 2) be the biggest buyer and increase the value rapidly (as we are seeing now) then one day just stop buying and watch it crash big time, thus killing all confidence in it.
Therefore getting all people rich who have them to plow into gold and silver, and for the other cryptos to step in and used as the intermediary of goods and services.. the process you layout sounds long .. very long btc is still being mined, then there is LTC, PPC, NVA, TRA, and many many more.. this idea will stick.. we don't need banksters to loan paper to us at interest anymore Game Over Banksters.. insert 20 LTC! 1for1
They would get more and more expensive as they started to buy. It's not just a matter of buying them all up at current prices. There is a reason why China is slowly buying the gold it needs rather than trying to go in in one hit. Plus, the Fed's balance sheet would expand further and I'm sure questions would be asked as to what they are doing. I think they have had laws passed which says what types of assets they can buy. I'm not sure digital currency comes under that. If they killed it, which seems doubtful to me but let's say for argument's sake, I think the market would just pick another cryptocurrency. Or you could start another fork off the bitcoin blockchain. Would it destroy confidence in them? Possible I guess. But the whole scenario seems unlikely to me. And as far as exchanges go, not every country in the world agrees with the US's policies. And more countries are coming online all the time. Shut off exchanges in every country in the world? Seems unlikely. And the ones who accept Bitcoin would probably get a competitive advantage due to the much lower costs of doing business as compared to the current financial system. There's a reason why bankers and financial types cost so much. We want to get away from that, but it's a serious threat to the livelihoods and privileges of the banker class.
^And I completely understand that. It made me nervous and still does to a degree. I think that's true of many things though. ie, search engines are unlimited in supply, yet most people use Google. I think the market wants one currency. People want one price for things and not have to do the converting all the time. I mean, the US dollar is sort of the defacto internet currency atm, but I think we all know that that can't last. it's just not designed for it amongst all it's other problems which are well known on this forum. The currency needs to be fast, efficient and move from one spot to another in as cheap a fashion as possible. People (the market) will like it because it will be easy to use, eventually, imo. The other crypto's will have niche uses I think, but most people will want to be transacting in the same units as everyone else. That's why there has been a global reserve currency for so long. It's a network effect. Will people be able to get the other currencies cheaper? Sure, but they won't be as desirable because the mass market is building around Bitcoin. As long as Bitcoin remains open source and therefore highly adaptable to market needs I think it will be dominant for a long time.
To be honest it is hard enough finding anyone that will sell you 10 BTC at the moment, let alone the Fed being able to purchase all the BTC on earth? I doubt it, plus they are mined on peoples computers. How many out there would be hoarding them like crazy? I think a lot. But then again if they were to just print ludicrous amounts of fiat and buy it at way over the market value, I suppose it could be possible.
What you just wrote just backs up my point 100%... 1. If someone was buying them all up in order to lock them away then it would be hard to buy, because there will be no velocity as they are not going back into the market. 2. Most people that started off mining for them would very well be selling them at such high prices. 3. BTC went from like 50c to $150 in a matter of years, so this does describe someone with unlimited money buying them up.
Which is what we are seeing. The price is going crazy up. Also China know if they went all in at once the US will probable just close the gold exchange again. This is not an issue with bitcoin, also there is no emotional attachment with Bitcoin. With the FED doing 80 billion of buying each month, I'm very sure no one will notice 1 billion over 2 years. Also regarding the law, well I'm sure the FED don't really care about it and will do what it wants. Yes and how long before people lose all confidence in it?? I'm sure people are not going to poor in their savings into a currency that dies after a few years.
Bitcoin is a currency. All it needs is some value to be valuable as a currency. Don't park your savings in Bitcoin, unless you want to risk it due to fluctuations. Who cares whether Bitcoin is high or low if you are not parking a reasonable amount of money there (your risk). It is merely a currency.
And how would a currency mature to get to a point where it can offer value if it can't maintain some stability for a period of time. What large business would adopt it? and if your just using it in between other currency then whats the point? as you will be paying a lot of conversion fees. I like the idea of Bitcoin, but i just can't see it taking off.
I'm not sure what you are talking about here. China is slowly buying off the market so as to not disturb the price too much. If everyone started to know that they were buying big everyone else would pile in and it would drive a huge bubble. But it won't be just 1 billion dollars. As they start to buy they will push the price up. It would end up being a lot more than 1 billion. But the scenario sounds unrealistic to me. People would just go to another currency, after taking huge profits, and then the Fed would have to do the whole thing over again. I actually wouldn't mind too much if they did do this now I think about it. Although, I'm almost certain they won't. People lose confidence crypto-currencies in that they can buy and it will go up hundreds if not thousands of dollars, assuming the FED/IMF keep buying? I think they'll be a lot of people out there quite keen on buying them. But ultimately this is all just FUD imo. What I would say to you is if you feel this way then stay out until it is better established and accepted, assuming it will be.
I guess it was crazy of me to think a central bank might create crazy policies which go to extreme lengths and spend extreme amounts of money in order to keep their currency of choice number 1.
