RB,
Not to disparage the highly-respected Mr. Dalio, but I would bet on nationalization of the cryptocurrencies out there now. My reading is that Central Banks, under the BIS, are the future of cryptocurrencies. [I see the current crop of CCs as the “beta test” for a global CC.
Best regards,
prodagal
There is no such thing as “nationalization of cryptocurrencies.” They are decentralized and entirely outside of a governments’ control even in principle.
To see why, let’s wargame this. Since 60% or so of Bitcoin miners are in China, a CCP takeover would be the best shot at “nationalizing” Bitcoin. It would play out like this:
1. CCP announces that the Bitcoin protocol will be altered to conform to their dictates (say, introducing higher inflation and enlarging the block size). Since the BTC code is open source a couple CCP programmers make the modifications easily enough.
2. CCP orders all Chinese miners to implement the CCP-BTC code... or else. They comply to keep their heads attached.
3. Non-Chinese miners don’t implement the code, because users didn’t ask for it and don’t want it. Since Chinese miners control 51%+ of hashpower their form becomes dominant; non-Chinese miners are forced to adopt the CCP code to keep mining.
4. Meanwhile the Bitcoin community is in an uproar. The dev community quickly releases code restoring the original protocol and disqualifying any blocks conforming to CCP dictates (practically speaking, even if the CCP action came out of the blue, this would happen within a matter of hours.)
5. Meanwhile exchanges have halted trading in CCP-BTC almost from the beginning, knowing it is worthless. Withdrawals and deposits are also on hold.
6. The restored code is released and quickly adopted by non-Chinese miners. Since CCP-BTC blocks are rejected their fork becomes irrelevant (at best it becomes a marginal forked coin mandated for use within China and mocked and rejected everywhere else - think Bitcoin SV). 7. Exchanges reopen as soon as the free mining community begins producing blocks with the forked code. Life quickly goes back to normal for the Bitcoin community (though blocks are slow for a few weeks until the automated adjustments come - assuming Chinese miners are kept off BTC).
In this scenario the only thing the CCP accomplishes besides a temporary disruption is the destruction of the Chinese mining industry, if they are blocked from mining the concensus protocol. In other words it would be stupid for China to even try to nationalize Bitcoin. Other countries would have even less leverage. It’s the users who choose by consensus what code to run who ultimately define Bitcoin.