You just need to control the onramps and offramps.

Bitcoin is of no use if you can't exchange it for anything tangible.

All that's required for people to exchange it for something tangible, is for people to start.

And among other things a price that's stable enough that you can actually cost goods without the value spiking upwards or downwards under your feet.

Zoom out to the "all" range on https://www.bitcoinprice.com/ and try to tell me with a straight face that you're looking at a graph that belongs to a stable currency. Heck, even just look at the last two years.

Part of the problem with Bitcoin in specific among all of these cryptocurrencies is that the Bitcoin community in particular is completely divided on whether they want a speculative asset or a functional currency. You can not have both. A currency that is regularly spiking in value to the degree that Bitcoin spikes (even a currency that spikes upwards in value) is not suitable for everyday transactions. A currency that doubles or even triples its value in 2 years is not a good currency.

The bigger thing to understand is that it is impossible to fix this problem with Bitcoin, because a sizable portion of the Bitcoin community doesn't want Bitcoin to be a currency. They want a speculative asset. In my opinion, that portion of the community is significantly larger and has significantly more influence than the portion of the community trying to create a currency.

That’s not that big of a deal, just move BTC into a stable coin first and then use that for the transaction.

Bitcoin is more akin to a gold like store of value than a currency.

I know that this thread jumps around a lot and you might be responding to multiple people, but quick reminder of the specific comment thread I'm responding to:

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> You just need to control the onramps and offramps.

> Bitcoin is of no use if you can't exchange it for anything tangible.

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> All that's required for people to exchange it for something tangible, is for people to start.

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The need to move BTC over to a stable coin before you spend it was part of Nextgrid's criticism to begin with. It requires an off-ramp, a functional exchange that will accept Bitcoin and give you something spendable.

I guess to be charitable, maybe the argument you're making is that the stablecoin is the transactable part of all of this and the stablecoin will be accepted ubiquitously and that it will be harder to regulate those kinds of exchanges. However, it's worth asking in that world why anyone would be using Bitcoin for transactions if they're just going to transfer it over to a better cryptocurrency later to spend it? Why wouldn't they just use the stablecoin?

> “ Why wouldn't they just use the stablecoin?”

This is a good question and I think there’s a two part answer.

Part one is stable coins still have smart contract risk in the arbitrage style version, and fraud/authority risk in the custodial version.

Stable coins that peg a government currency are also vulnerable to all the same issues fiat currencies are vulnerable to.

Bitcoin is a better store of value than fiat (which is a bad store of value - we store wealth in assets primarily because of this).

So you’re better off storing value in BTC like gold and then moving pieces of it to transact in small amounts if you must. If you can’t (exchanges are locked) you’ll need to find someone willing to transact in BTC despite volatility (or someone willing to trade you fiat in person).

Is this optimal? No, but it’s about degrees of control. Wealth locked up in banks controlled by authoritarian governments give you fewer options.

> If you can’t (exchanges are locked) you’ll need to find someone willing to transact in BTC despite volatility (or someone willing to trade you fiat in person).

This is the part I have an issue with when talking about Bitcoin as a currency. Forgive my oversimplification, but it really sounds like what you're saying to me is that Bitcoin is not a good currency, it's an investment asset, but for the moment it can be converted into other good currencies. However, it turns out that most of these stablecoins and other currencies have very similar properties to traditional government-issued currencies (risks of fraud, inflation through issuance, etc). These are all the things that Bitcoin is supposedly going to fix, but then it turns out that transacting with Bitcoin is largely reliant on keeping those types of currencies around.

The hope is that Bitcoin will continue to be convertible into good currencies, and to a certain extent that's a valid hope. There are scenarios where a government might censor traditional currencies before they regulate exchanges (see Wikileaks, for example). But that's also exactly what people are calling out here; we're questioning how reliable or censorship-resistant those exchanges actually are in the long run. I'm not sure that's a problem that can be glossed over, it's a big fundamental part of the disagreement.

Additionally, I would ask the question, how much of Bitcoin's current value as an asset store is tied up in the fact that exchanges are operational and relatively easy to use? I strongly suspect that if the US government ruled that exchanges were illegal tomorrow, the value of Bitcoin would plummet. And if that's the case, then we have a currency that not only needs some way of exchange with traditional currency in order to be spent, it's also kind of reliant on those exchanges being easy and operational in at least one or two wealthy countries in order for it to be used as an investment vehicle or store of value at all.

If those exchanges get shut down, and Bitcoin is hard to exchange but still valuable, then that's not the worst thing in the world for Bitcoin. It's pretty bad, but it's still a store of value in that scenario. However, if those exchanges get shut down and Bitcoin is both hard to exchange and the value is plummeting because ordinary/rich people aren't using it as an easy investment vehicle anymore, then that's an extremely bad outcome for Bitcoin.

> Wealth locked up in banks controlled by authoritarian governments give you fewer options.

Really, really important to clarify that we're mostly talking about theory here. In practice, wealth locked up in banks controlled even by authoritarian governments like China currently still give me exponentially more options than Bitcoin does for most purchases, with only a few minor exceptions. Could that change? Sure, absolutely. But it's not the current situation.

Even looking at something like Russia; I think depending on how this war continues, it's going to be interesting to see if Bitcoin actually ends up being useful for ordinary people there in the long run. I am fairly skeptical; multiple countries have tried to use Bitcoin in the past during currency disasters and I have not been super-impressed with the average result. And none of those countries were being as aggressively sanctioned as Russia currently is.

I think these are all good questions and where the conversation gets interesting imo. Also the answers are largely unknown and unproven.

Gold has held up as a value store and is the closest analog I think, but it’s not a perfect comparison and there are trade-offs for each.

I mostly think the technology is cool and provides a new capability to individuals. How much this ends up having a lasting effect remains to be seen (though I lean optimistic).

I don't really understand how that helps. An example: Today 1 BTC is worth 10 of a stablecoin tied to the USD. I want to transact, so I trade for 10 of this coin and spend it. In three weeks, 1 BTC is now worth 20 of that coin. I regret transacting.

If you think your currency might be worth a lot more if you just hold on to it, you don't want to spend it for FOMO. Stablecoins don't change that.

> You just need to control the onramps and offramps.

Thats a nice theory, but in reality it is false/implausible to be able to control every single on and off ramp in the world.

Evidence: Nobody is currently controlling all the on an off ramps, despite the fact that I have heard the same exact argument that you are making right now, for literally over a decade.

You don't even need to off-ramp it, which was the whole point of crypto.

I could cut your lawn, sell you an Xbox, or buy an old tractor completely with BTC. The government can cry about it all it wants, it can pass a hundred laws, or issue a thousand court orders. But at the end of the day, it has absolutely zero control if two individuals want to voluntarily exchange crypto with each other. We've already seen this play out with the illegal drugs trade and P2P file sharing. Spoiler alert: The government lost.

In virtually every country, there exists the definition of legal tender, which basically is the currency that taxes are paid and the currency that courts recognize as viable payment for debts.

So really, in FreedomLand, you can work and get paid in BTC, but if FreedomLand only recognizes FreedomDollar as legal tender, then when you need to pay income tax, the government will charge you in FreedomDollar, and you need to exchange your BTC to FreedomDollar.

If you cannot or don't want to pay tax, then of course police will prosecute you, and courts will also require settlements in FreedomDollar. Nevermind you have millions of BTC or XBoxes.

Now of course, this "problem" would disappear if FreedomLand recognizes BTC as legal tender, but now FreedomLand government loses all monetary control, and then economic activity descends into chaos.

What you've really seen play out is that the government hasn't bothered to regulate cryptocurrencies yet. After they regulate cryptocurrencies, this becomes much easier to prevent.

That’s only true if you must transact in fiat. It’s mostly true today, may be less true in a future with this kind of restriction on on-ramps and off-ramps.

Even so, it’d have to be a global restriction on all exchanges which is more challenging to coordinate.

If your tokens become valueless to other Canadians, other Canadians won't accept them. Non-Canadians who trade with Canadians won't accept them because they can't trade them with Canadians. The value goes to zero by induction.

Yeah, a lot of this assumes you get out of Canada at that point. Just like the people fleeing Russia or Ukraine.

The thing crypto gives you is the capability to get your wealth out intact (at least whatever you had moved into self-custody). If you have fiat in banks frozen by the Canadian government your wealth is trapped.

You’re right if Canada banned Bitcoin it could influence the value of the coin. Similar to governments refusing transactions in rubles. The difference in capability is in the ability to move your wealth and that short of global coordination a global store of value (controlled supply, non-government etc.) is more resilient. The fiat comparison would be having the entirety of your wealth in cash in your house - obviously not viable (and good luck trying to cross a border with it).

Crypto is also more resilient to government meddling in currency production (this is often over-stressed in US, but is a real problem in developing countries where kleptocrats devalue the currency to steal the wealth).

It’s more similar to buying gold and having it on you, but with crypto you don’t have to keep it on your person to maintain direct control of it. You just need to know the seed words.

I wasn't discussing the case of Canada banning Bitcoin but of Canada sanctioning the truckers' wallets. Wherever the truckers go, their Bitcoins would no longer be allowed on Canadian exchanges.

The fiat equivalent would be moving money to an overseas account. Before you are sanctioned, doing so is just as easy as buying Bitcoin. After you are sanctioned, both are equally hard. The difference is that your Bitcoins can be demonetized, while your overseas assets can only be seized if the governments cooperate.

How is it hard? Canadian sanctions only work in Canada.

Say I'm an American, for example. I'd receive "sanctioned" bitcoins from a Canadian and then send them non-sanctioned bitcoins back to a different wallet address. There is no "exchange" being used in this process. I could then happily spend or transfer said coins in the 99% of the world that isn't Canada.

This is explained in the GGGP comment.

It’s not as easy to move money to an overseas account as it is to buy Bitcoin.

Your money on that account is still being trusted to some authority and your guarantees on it are limited.

The real fiat equivalent would be moving all your wealth into cash first (literally physical bills in your house), which is obviously worse and harder to move.

Your bitcoins cannot also be demonetized any differently than fiat. It’s similar to sanctions on rubles. Both types of value are vulnerable to government bans affecting the price. The difference is with crypto and self-custody you can transact privately despite that (similarly to if you held cash, but holding lots of cash is again harder and more vulnerable to a single government’s stupidity).

If your dollars in a bank are frozen you can’t transact at all. Your self-custody BTC can’t be frozen on the blockchain, you retain a lot more ability to transact globally.

You can transact despite the sanctions, but if nobody will accept your coins because they won't be accepted on exchanges, they are effectively useless, which is my point. Custody is meaningless when your wallet can be demonetized.

It’s more likely someone will accept them and that some exchanges will still accept them. What you’re suggesting requires perfect and total global coordination.

With fiat in a bank, you don’t have a chance since it just gets frozen and you don’t actually have custody. With crypto it’s more likely you can continue to transact.

It’s a matter of degree.

But why would someone accept your less-useful crypto when they can accept fully useful crypto instead? Other exchanges will either refuse to accept it (easier) or have to mark it as tainted and set up separate markets that accept those tokens and pay them out.

You're right that sanctions and restrictions could impact the price.

What I'm arguing is that this impact doesn't cause the price to be zero, requires global coordination to have a big impact, and that even in this case, the self-custody capability of crypto is still something better than the alternative (no access to any funds or any ability to transact). We're also discussing an extreme worst case (and even in that case it's still better than frozen non-custodial fiat funds).

Flagging wallets to exchanges also requires targeting and many people wouldn't get hit by this. There are also a lot of cases that benefit from self-custody in a world that doesn't have this extreme global coordination to sanction crypto.

Imagine the case where you're a random Ukrainian citizen in Russian occupied territory trying to get your wealth out across a hostile border. Your crypto wallet is not likely to be flagged to exchanges (even if it was most exchanges wouldn't care). You can memorize the seed words and get out safely with the ability to recreate your wealth on the other side.

This has already happened at least once: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...

If you're a random Ukrainian citizen in Russia, you can buy assets outside Russia and have your wealth on the other side before the sanctions. The fact that you can buy Bitcoin in Russia from other Russians and leave is only a temporary workaround with Russia not yet regulating it. People consistently mistake the fact that Bitcoin hasn't been regulated with the idea that Bitcoin can't be regulated, which is false.

It’s harder to regulate and easier to buy than assets outside of Russia.

This is probably why Chinese wealth leverages it to get around attempted controls by the ccp despite regulation.

> It’s harder to regulate

Why? It is just as easy to regulate as any other tracked asset. Physical items are much harder to regulate.

China simply hasn't started enforcement.

It’s harder to enforce regulations for self-custody crypto than it is to enforce regulations on centralized banks that hold wealth for you.

Mostly because it’s harder to confiscate (more akin to a physical item in your possession)