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Comment by nmlnn | Hacker News Reader

SEC deals with securities, bitcoin is not a security according to them. Ripple(XRP) is.

Until they are. Mining equipment for BTC is already effectively monopolized by one vendor and they are likely doing significant mining behind the scenes controlling much of the market.

>and they are likely doing significant mining behind the scenes controlling much of the market.

I don't get it, how does "controlling much of mining" allow them to control the market? It does give a bunch of bitcoin to play around with, but it costs money (electricity, manufacturing costs) for them to mine them, so depending on their margins they'll be less impactful than a whale who loaded up on cheap coins a few years ago.

It's a thought exercise, not a serious suggestion that it might occur, hence "if it thought there were grounds to do so." I'm imagining how a Government with sufficient power might go about crippling the value of BTC.

A single government can’t do it, which is why bitcoin still exists.

The US could cripple bitcoins value quite easily by sanctioning exchanges. The main power it would have to enforce those sanctions would be to cut off any institutions that violate them from handling USD. This is how the US manages to do stuff like force French banks to uphold US sanction on Iran.

https://www.wsj.com/articles/bnp-plans-to-slash-dividend-sel...

That wouldn’t eradicate Bitcoin or anything, but it would make it far less useful than it is currently, and have a significant impact on its value. It would also be a pretty bad idea, because the power of US sanctions is largely derived from demand for USD, and political volatility puts downward pressure on that demand, so you generally don’t want to waste it on frivolous sanctions.

A single government can easily block it in country — nobody needs or wants Bitcoin, they want to buy things and that can be attacked by targeting whoever participates in the network. Bitcoin is designed to make this extremely easy since that public ledger means they can go after ever transaction you’ve ever made at any point in the future, not just at the time of transaction. Unless the government is incredibly corrupt and powerless nobody is basing a black market on a system which giftwraps your transaction logs for prosecutors.

A government which participates in international banking coalitions or treaty groups can use those relationships to go after transactions internationally, too. Think about how drug cartels have secret bank accounts frozen, and then about how Bitcoin is designed to make that easier by giving the authorities a full list of your activities which is trivially extended to every partner. Once you’re on that list, everyone you know will be getting pressure to turn on you.

Now think about a major government: they can not only use normal law enforcement but also control the exchanges themselves with things like anti-money laundering laws. Someone might choose to blow off demands from a small country or a pariah state like Iran but if the US or EU decided to act everyone involved is now facing things like not being able to fly internationally or do business with most major companies. Since they have no upside to resisting and it’s trivial to block Bitcoin transactions, anyone in those jurisdictions is unlikely to risk that protecting a stranger in a different country.

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