

Ask HN: What's to stop the US Government from buying 51% of Bitcoin? - vinchuco

Hopefully this is not a silly question.
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dragonwriter
Why would you buy 51% of BTC? What you really want to buy is 51% of the
hashing power in the BTC network.

And the correct answer is nothing stops them from doing that (or even stops
them from _having done that_ in the past).

Its generally presumed that they haven't and won't because it is presumed the
cost to do so would exceed the value to the government of doing so.

~~~
chrisBob
If I understand BTC correctly then the return on mining is going down. Once
the cost of mining exceeds the return in coins then there are only a few
reasons to continue mining: 1) Altruism. Some people will just want to support
the network. 2) Botnets. If you aren't paying for the hardware then you don't
care about the cost. 3) Control. You are a large entity that wants to take
over the network. 4) Ignorance. I assume some people will continue to mine and
just not know they are losing money doing it.

Please let me know if I am missing something.

I am betting on a turning point where it becomes more reasonable for the
government to take over the network, at least temporarily. It is not a stretch
to think that someone (not necessarily the US govt) with enough computer power
could get a benefit from controlling the entire network.

~~~
dragonwriter
> If I understand BTC correctly then the return on mining is going down.

The cost in terms of hashing effort expended to produce new bitcoins goes down
over time, and eventually no bitcoins can be mined, _however_ , there are two
reward systems for mining: _first_ (and by design important in the early
stages of bitcoin adoption) is production of new bitcoins, _second_ (and by
design important in the late stage of bitcoin adoption) is transaction fees.

Remember that miners are the ones verifying transactions in the bitcoin
network, that they can prioritize which transactions to verify, and that all
transactions can include an offer of a transaction fee as a reward for
verifying them.

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zbtc
Even if they did, it wouldn't matter. They need 51% of the _hashing power_,
not 51% of bitcoins, to be able to manipulate the blockchain.

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hkarthik
Because quite simply, they can't.

To buy it, they would borrow the money from China. China would provide it by
using the BTC they own at whatever price they choose to sell it at.

~~~
drabiega
They most certainly would not have to 'borrow it from China'. If for some
reason they wanted to do this, they would just have to sell some securities,
most of which would be bought by U.S citizens, the main holders of U.S.
Government debt.

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bottled_poe
Obviously this wouldn't work as bitcoin clones will just pop up.

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bmelton
I'm not an expert at all, but right now, I think the only thing stopping them
from buying large quantities of Bitcoin is availability. Throwing money at a
problem is sort of a unique proposition when the problem is money, and
everybody else is doing the same.

The question I would have is what objective would that satisfy? Is there some
power in holding a slight majority of the currency? I mean, they already hold
quite a lot of regular cash (or at least do transiently), but that doesn't
seem to be affecting dollars in the same way that shares in a corporation
does.

Perhaps I'm missing it, but I don't know what significance would arise from a
single entity holding a majority of the currency. If there is, and I'm
clueless, my apologies.

