I can’t think of any. The current oil reserve is supposed to be used in the case of another oil embargo. But its actual use is to lower gas prices when the administration in power needs a political win.
I actually think the purpose of a Bitcoin reserve is to temporarily increase the price so tech-bros (re: Elon) can sell at a massive profit. Then buy back at a much lower price. It’s just a way to indirectly transfer federal dollars into administration pockets.
I can’t find any reason for the government to buy crypto and hold it in reserve.
Yes, but it provides a lower limit to the value. The lower limit of the value of a mark on a given distributed ledger is nil. Also most of your points are general to all blockchains, not particular to Bitcoin, which has problems specific to its protocol and the choices made at its inception.
Sorta? Proof: Gold exists. You just have it. I’m not sure how much “harder” it is to prove that a physical thing is what it appears to be than it is to prove that a particular cryptographic signature is validated for a particular distributed ledger by the consensus processing power of said ledger. Security: Eh? Digital currencies are stolen all the time, remotely. Theoretically one could make a very strong passphrase that would be virtually impossible to crack before the heat death of the universe, but in practice most passwords aren’t that strong and remote attacks are easy to iterate, while physical things take effort to get to and gold is heavy as shit. Plus. a determined and energy-rich actor could shoot for a 51% attack without sending a single troop across a border. Same for war pillage.
Most physical goods that are treated as stores of value are functionally rai stones. That’s basically what money is. It doesn’t matter where something physically is, but rather how do the parties to the transactions understand the exchange. And I mean, if a pirate steals your doubloons, he gets caught and hanged, or they are repossessed at the point of a gun from whoever he traded them to on the black markets, etc. If a hacker cracks your key, you can maybe find him, maybe not. If you find him you can hit him with a wrench until he transfers the numbers back to you, but if he expires first you’re SOL. Divisibility in Bitcoin is meaningless. State-issued currencies can be divided to whatever fraction the issuers deem necessary. Bitcoin particularly is hard-capped at a satoshi.
These are all social constructions. A sovereign state says you “own” a 100-acre plot of land. You “sell” half for some quantity of Bitcoin. The state later fails and some polite but armed people come and tell you all 100 acres are theirs now and if you give them trouble they will use a tool called a “gun” to make little pieces of metal called “bullets” poke holes in your head until you are no longer what could reasonably be described as “alive”. So with your passphrase in your head (and no new holes) you leave. Where do you go? Somewhere where there are other nerds who will take your distributed ledger units in exchange for the necessities of life (or a local currency with which to procure the same), but what do they get in exchange, really? A promise of labor? Nah, you’re Bitcoin “rich”. “Rights” to the land you just left? Nope, the gentlemen with the guns have that. All they get…is Bitcoin, which is only worth whatever the faithful believe it is worth, or what a state or state-like actor tells you it’s worth by the barrel of a gun.
Apples and oranges when speaking of gold, USD, and other mediums of exchange, but yeah blockchains are cool and interesting and even potentially useful in their own right.
That’s.just.false.
Is it though? Is it “better”? Bitcoin specifically, as I think I mentioned before, insofar as it is an “asset” at all, is deflationary, which makes it a lousy medium of exchange. You’re basically saying that the supply of gold (or other material mediums of exchange) can increase, as if it’s a bad thing. Stability of value (something Bitcoin still lacks) is a good quality in an asset to be sure. Deflation on the other hand is just wealth transferring to someone for not doing anything. Essentially economic rent. Gold is generally deflationary too, but that’s a problem it shares with the Bitcoin ledger. The little bit of potential increased production of gold around the margins isn’t even a bad thing.
This isn’t a common problem in stable nation-states, though in a war zone or active coup sure, a passphrase might be easier to secure.
I bought beer with Bitcoin once. Buying things with Bitcoin is neat. But…can the factory that makes the ASICs buy the components with Bitcoin? Can the component manufacturers buy their materials with Bitcoin? Do all the workers down to the miners of rare-earth minerals take their wages in Bitcoin? Then pay their rent and buy their groceries with Bitcoin? No I think they use their local currencies. I expect even the ASIC resellers mostly have to sell their Bitcoin for legal tender before then use that legal tender to purchase…things. And for any given nation-state, the collapse of that state would probably impact the value of Bitcoin negatively relative to the level of investment from the people. If the USA goes Mad Max (Australian setting, I know), even put aside the computers and network access needed to maintain a blockchain (other countries exist, etc), what is the impact of the evaporation of all the USD which were use to acquire BTC on the exchange rate for said BTC in the still-existing nations? Do you think all the Bitcoin rich American refugees crossing into Canada and Mexico are gonna get more poutine/fajitas per satoshi than before the collapse? Less? About the same? Come on now.
ftfy
Like any other fiat currency, blockchain currencies (including Bitcoin) rely on faith and credit. USD derives its value from the USA’s ability to swing its dick around internationally. Gold derives its value from speculation + (utility * rarity). Blockchain currencies, separate from their ability to be converted to state-issued currencies, derive their value from the full-faith-and-credit of nerds.