Ultimate Money - Crypto News, Reviews & How to's
  • Home
  • About Us
  • Bitcoin
    Bitcoin Price Chart

    Bitcoin Price Chart

    Bitcoin Latest News

    Bitcoin Latest News

    what is bitcoin

    What is Bitcoin?

    How To Buy Bitcoin

    How To Buy Bitcoin

    Cryptocurrency ICO

    Bitcoin Wallets

  • Cryptocurrency
    Crypto Latest News

    Crypto Latest News

    Crypto Coin Reviews

    Crypto Coin Reviews

    Cryptocurrency Education

    Cryptocurrency Education

    Cryptocurrency ICO

    Cryptocurrency ICO

    Crypto Price Charts

  • Exchanges
    Top 10 Aus Exchanges

    Top 10 Aus Exchanges

    Top 10 Overseas Exchanges

    Top 10 Overseas Exchanges

    Coinspot Review

    Coinspot Review

    Binance Review

    Binance Review

    Bitmex Review

    Bitmex Review

  • How To
    What is Bitcoin?

    Get Started – Crypto Intro

    How To Buy Crypto

    How To Buy Crypto

    How To Store Crypto

    How To Store Crypto

    How To Mine Crypto

    How To Mine Crypto

    How To Bet With Crypto

    How To Bet With Crypto

  • Podcasts
  • Contact Us
No Result
View All Result
  • Home
  • About Us
  • Bitcoin
    Bitcoin Price Chart

    Bitcoin Price Chart

    Bitcoin Latest News

    Bitcoin Latest News

    what is bitcoin

    What is Bitcoin?

    How To Buy Bitcoin

    How To Buy Bitcoin

    Cryptocurrency ICO

    Bitcoin Wallets

  • Cryptocurrency
    Crypto Latest News

    Crypto Latest News

    Crypto Coin Reviews

    Crypto Coin Reviews

    Cryptocurrency Education

    Cryptocurrency Education

    Cryptocurrency ICO

    Cryptocurrency ICO

    Crypto Price Charts

  • Exchanges
    Top 10 Aus Exchanges

    Top 10 Aus Exchanges

    Top 10 Overseas Exchanges

    Top 10 Overseas Exchanges

    Coinspot Review

    Coinspot Review

    Binance Review

    Binance Review

    Bitmex Review

    Bitmex Review

  • How To
    What is Bitcoin?

    Get Started – Crypto Intro

    How To Buy Crypto

    How To Buy Crypto

    How To Store Crypto

    How To Store Crypto

    How To Mine Crypto

    How To Mine Crypto

    How To Bet With Crypto

    How To Bet With Crypto

  • Podcasts
  • Contact Us
No Result
View All Result
Ultimate Money - Crypto News, Reviews & How to's
No Result
View All Result

Can Governments Hoard and Destroy Bitcoin?

by Tim Delmastro
Can Governments Hoard and Destroy Bitcoin
44
SHARES
Share on FacebookShare on Twitter

The rise in the awareness and popularity of Bitcoin over the past few years has forced governments to take a stance on the cryptocurrency. Some governments, such as China, have attempted to marginalise Bitcoin, while other countries such as Japan and South Korea have embraced this new technology. Australia has taken a ‘stand back and watch’ approach, although it is one of the more Bitcoin friendly nations. 

There is a concern by governments that Bitcoin could one day become popular enough to pose a substantial threat to their fiat currency monopolies. In an interview on CNBC, Jamie Dimon, Chairman and CEO of JP Morgan Chase, commented that “Governments are going to crush it one day. Governments like to control their currency, they control it through a central bank. They also like to know who has it. Where it is, where it’s going. Wait til someone gets hurt, wait til it’s used for illicit purposes, which is already is, governments will just shut it down.” 

The ability of a government to shut down Bitcoin is an interesting topic. In the same way that governments have failed to stop viewers from illegally downloading movies, shutting down Bitcoin altogether is equally as futile. At its core, Bitcoin is just a maths problem, and private keys are mere numbers floating in cyberspace. So it’s virtually impossible to shut down Bitcoin, but one unconventional method posed to eliminate Bitcoin is that instead of attempting to shutting it down, if a government truly wanted to rid the world of Bitcoin, it could simply buy up all the Bitcoins in existence and then destroy them. 

It’s important to note that this scenario is impossible from a practical standpoint. But as an interesting thought experiment, let’s humour the consequences of a government’s attempt to monopolise and destroy Bitcoin. 

Firstly, if a government were intent on buying all the Bitcoin, they would create massive demand for it. An enormous buyer attempting to purchase the world’s supply of Bitcoin would lead to exponential price rises. This in turn would lead to the public participating in the buying frenzy for ‘fear of missing out’. If the government’s intention is to remove Bitcoin from the hands of its citizens, an exponential price rise would certainly create the opposite result. The lack of available supply in the Bitcoin market, multiplied by a sudden increase in speculator interest will snowball on itself to an extent where Bitcoin’s entire market cap will be much too big for any country to corner.  

During the $20,000 peak in the price of Bitcoin last December, the Bitcoin market cap reached $340 billion. It’s safe to assume that a massive buyer gobbling up all the Bitcoins available for purchase would drive the price up to multiples of the all time high seen late last year. Thus, a country would have to devote a gargantuan amount of funds, perhaps in excess of its entire GDP, just to fund this one effort. 

Secondly, assuming that a country theoretically had an unlimited budget dedicated to acquiring every single available Bitcoin, it would also need to control the entire mining process to ensure it received all newly created Bitcoins as well. This would involve the government needing to generate enough computational power to match that of the current Bitcoin network in an attempt to 51 percent attack the Bitcoin Blockchain. At present, the entire Bitcoin network consumes as much energy as a mid sized country such as Denmark or Ireland. In fact, the Bitcoin network currently consumes more power than the bottom 159 countries! So in order to acquire all of the world’s Bitcoins, not only would a country need to devote its entire GDP to the purchasing of the coins, it would also need to commit most, if not all of its electricity output towards Bitcoin mining. 

Thirdly, assuming that a government with an unlimited ‘Destroy Bitcoin’ budget had enough energy output to match that of the Bitcoin network, and hence, was somehow able to successfully acquire the overwhelming majority of the world’s Bitcoins, the remaining Bitcoins which were not able to be purchased by the government could be used to continue the Bitcoin economy. This is because Bitcoin can be divided into a hundred millionth of a coin, or eight decimal places. So even if a government was able to hoard and destroy the vast majority of the world’s Bitcoins, the remaining Bitcoins which were not able to be acquired could be divided and circulated as if the government’s devious plan never even happened. 

Lastly, in the theoretical event that a government was well on its way to accumulating all of the world’s Bitcoins with the plan to destroy them, Bitcoin developers could fork the Bitcoin protocol, and the newly created forked coins could be used to create a new, uncorrupted Bitcoin ecosystem. 

The thought of a hostile government attempting to accumulate and destroy Bitcoin is merely a hypothetical scenario. In reality, the financial cost and electricity output required are too large for it to ever be a feasible method for destroying Bitcoin. Nonetheless, it is a thought provoking exercise which demonstrates just how resilient Bitcoin actually is. 

Share18Tweet11
Previous Post

Turkey Turns to Bitcoin During Currency Crisis 

Next Post

Printing Money for Celebrity Endorsements

Tim Delmastro

Tim Delmastro

Tim Delmastro is a multi-award winning filmmaker and journalist, having researched and documented subjects relating to Bitcoin and other current events in finance for over a decade.

His films have been broadcast on Netflix, The History Channel, Al Jazeera, SBS Australia and Emirates In Flight. Tim has been a featured guest on Fox News, RT, The Project and several radio stations and podcasts.

Note: None of the information should be considered financial advice. We merely provide opinions and education so that you can Do Your Own Research. Cryptocurrencies have a history of volatility and Ultimate Money is not responsible for any financial losses or gains you may have when investing in any crypto coins or related projects.

Related Posts

Printing Money for Celebrity Endorsements
Bitcoin

Printing Money for Celebrity Endorsements

Turkey Turns Bitcoin Currency Crisis 
Bitcoin

Turkey Turns to Bitcoin During Currency Crisis 

Seriously, Is Bitcoin Dead?
Bitcoin

Seriously, Is Bitcoin Dead?

Will Governments Buy Bitcoin?
Bitcoin

Will Governments Buy Bitcoin?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FOLLOW US

Youtube Twitter Facebook

ARTICLE POSTS

  • Bitcoin
  • Cryptocurrency
  • Exchanges
  • How To
  • Coin Reviews

WEEKLY NEWSLETTER

PODCAST SUBSCRIPTION

on Apple Podcastson Androidon Google Podcastson Stitchervia RSS
API Request timeout

TOP 10 CRYPTOCURRENCY

#

Name

Price

1 Hour

TOP ARTICLES

  • Bitcoin review
  • Buy Bitcoin with Credit Card
  • Bitcoin Mining Explained
  • Alice in Cryptoland
  • Ethereum Review

LATEST POSTS

Printing Money for Celebrity Endorsements

Printing Money for Celebrity Endorsements

Can Governments Hoard and Destroy Bitcoin

Can Governments Hoard and Destroy Bitcoin?

Turkey Turns Bitcoin Currency Crisis 

Turkey Turns to Bitcoin During Currency Crisis 

Ultimate Money Podcast Episode #015: Castlecoin Part 3

Interview with James Lynch, CEO of Castlecoin Ep#16

Seriously, Is Bitcoin Dead?

Seriously, Is Bitcoin Dead?

Ultimate Money Podcast Episode #015: Castlecoin Part 2

Behind the scenes of a Crypto Company Ep#15

What is a SIM Swap Attack? 

What is a SIM Swap Attack? 

TRENDING

  • Ethereum Review

    Ethereum Review

    0 shares
    Share 0 Tweet 0
  • Dash review

    0 shares
    Share 0 Tweet 0
  • NEM review

    0 shares
    Share 0 Tweet 0
  • Tezos coin review

    0 shares
    Share 0 Tweet 0
  • Top 10 Aus Exchanges

    138 shares
    Share 55 Tweet 35
Ultimate Money – Crypto News, Reviews & How to's

Ultimate Money is a Bitcoin and cryptocurrency education site providing guides, reviews, prices, podcasts and videos.

Article Posts

  • Bitcoin
  • Cryptocurrency
  • Exchanges
  • How To
  • Coin Reviews

Top Articles

Bitcoin review

Buy Bitcoin with Credit Card

Bitcoin Mining Explained

Alice in Cryptoland

Ethereum Review

RECENT NEWS

Printing Money for Celebrity Endorsements

Can Governments Hoard and Destroy Bitcoin?

Turkey Turns to Bitcoin During Currency Crisis 

Interview with James Lynch, CEO of Castlecoin Ep#16

Seriously, Is Bitcoin Dead?

Disclaimer: All contributors to the Ultimate Money website, related social media sites and other publishing platforms pride themselves on giving fair and balanced information on all aspects of the cryptocurrency industry. However it is very important to understand that we are NOT providing financial advice. Ultimate Money, it’s contributors and service providers are not Financial Advisors or Registered Analysts. We do not offer Bitcoin or crypto tips, strategies or trading models for you to copy. We merely provide opinions and education so that you can Do Your Own Research. Cryptocurrencies have a history of volatility and Ultimate Money is not responsible for any financial losses or gains you may have when investing in any crypto coins or related projects. Always use your best judgement when investing in any exchanges, wallets, CFD’s or other products.  Always be aware that any investment can go to zero.

  • About Us
  • Contact Us
  • Risks
  • Terms
  • Privacy

Copyright © 2018 All rights Reserved Ultimate Money

No Result
View All Result
  • Home
  • About Us
  • Bitcoin
    • Bitcoin Price Chart
    • Bitcoin Latest News
    • What is Bitcoin?
    • How To Buy Bitcoin
    • Bitcoin Wallets
  • Cryptocurrency
    • Crypto Latest News
    • Crypto Coin Reviews
    • Cryptocurrency Education
    • Cryptocurrency ICO
  • Exchanges
    • Top 10 Aus Exchanges
    • Top 10 Overseas Exchanges
    • Coinspot Review
    • Binance Review
    • Bitmex Review
  • How To
    • Get Started – Crypto Intro
    • How To Buy Crypto
    • How To Store Crypto
    • How To Mine Crypto
    • How To Bet With Crypto
  • Podcasts
  • Contact Us

© 2018 All Rights Reserved Ultimate Money.