Texas Governor Greg Abbott signs strategic Bitcoin reserve bill into law
theblock.co

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15 points

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austinallegro

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11 days ago

25 comments

bediger4000 ・ 11 days ago

What eventuality is Texas preparing for? How does a Bitcoin reserve help in any way?

  • elzorroplateado ・ 11 days ago

    TX is preparing for more waves of USD inflation. The conventional understanding is that Bitcoin allows its holders to protect themselves from massive waves of currency debasement. A Texas Bitcoin Reserve throws a massive power re-distribution back into the its hands and out of the those of the Federal Reserve System. Sure, TX could 'hodl' their oil, but sometimes it's good to have a digital savings technology that cannot be debase.

    • wredcoll ・ 11 days ago

      > but sometimes it's good to have a digital savings technology that cannot be debase.

      I'm sorry, a what? Digital savings technology? Bitcoin? The "asset" famous for having zero backing and incredibly wild price swings? How is this supposed to work?

      • elzorroplateado ・ 11 days ago
        ・ 4 more

        Yes. Bitcoin is a robust, networked, digital savings platform. That is its purpose. And if you think it has zero backing, why is it that can't people simply email it to each other? Because Bitcoin figured out how to automate digital uniqueness and prevent digital copies. I guess you will have to look into how it works.

        • NewJazz ・ 10 days ago
          ・ 2 more

          Bitcoin's original purpose was not to be a savings platform, no.

          • npoc ・ 6 days ago

            New assets monetise in stages.

            1) Store-of-value (volatile, increasing value)

            2) Unit-of-account, and medium-of-exchange once it has absorbed most value and so more stable in value, and people have sold all their lesser money into the market leaving them with only their harder money.

            See Gresham's and the Thier's Laws

        • tchock23 ・ 10 days ago

          I looked into Tether and that was all I needed to see.

    • lesuorac ・ 11 days ago

      > TX is preparing for more waves of USD inflation.

      I mean, the guy sponsoring the bill straight up said its so Texas can invest in the highest performing assets of the past 5 years.

      So, it's not in preparation of USD inflation.

      • Dig1t ・ 11 days ago
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        It can be both. Bitcoin is useful in the same exact way that gold is. Governments the world over have stockpiles of gold, it’s an asset that goes up over time and also resists inflation.

        • bediger4000 ・ 10 days ago
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          Gold has both industrial uses and aesthetic desirability. I was not aware of those properties in Bitcoin! Thank you!

          • npoc ・ 6 days ago

            That type of demand is unrelated to its monetary demand. Gold's monetary qualities are robustness, divisibility, scarcity, fungibility, portability etc.

            Bitcoin dematerializes the monetary qualities of gold into a superior, digital form.

kemotep ・ 11 days ago

What makes a strategic bitcoin reserve make more sense than like a strategic oil reserve or a sovereign wealth fund with a highly diversified portfolio?

I mean isn’t this like Texas just saying they are going to budget buying a bunch of Nvidia stock or Tesla stock or something?

  • npoc ・ 6 days ago

    Bitcoin is the hardest asset mankind has ever seen - harder than even gold and it's digital. Its optimised (theoretically ideal?) for exchanging and storing large amounts of value for large amounts of time. Nothing comes close.

  • wredcoll ・ 11 days ago

    Presumably this makes money for specific people selling bitcoins?

  • michaelmrose ・ 11 days ago

    A strategic oil reserve is an actual thing you can use instead of buying it abroad should it come to pass buying it abroad becomes problematic or expensive.

    A wealth fund is for folks with a surplus in order to get value out of their investment.

    Unlike BTC these things make sense. This is gambling.

    • Dig1t ・ 11 days ago

      [flagged]

      • michaelmrose ・ 11 days ago
        ・ 3 more

        None of this is true because even if you protect it properly you can be locked away indefinitely until you comply with any order to seize it.

        Anyone who accepts money that is supposed to be lawfully seized themselves becomes guilty.

        Most importantly this virtue is worthless for a US state which can trivially do any business it needs doing in USD

        • Dig1t ・ 10 days ago
          ・ 2 more

          Locking you away is completely orthogonal to the government being able to remotely seize your money, freeze your bank account, etc. at the end of the day the government physically does not have the power to take your money away from you. That is valuable regardless of whether you are locked up or not.

          Say I’m locked up because the government doesn’t like some political speech I made. They are trying to take my money but can’t. They lock me away forever, but before I went away I shared my encryption password with my uncle. My uncle has control of my money now and can move it wherever he wants. The government has no say in what he does with it. They don’t even know that my uncle is in possession of my passphrase until he decides to do something with it.

          >Most importantly this virtue is worthless for a US state which can trivially do any business it needs doing in USD

          My comment was explaining why Bitcoin has intrinsic value. The main reason TX would buy it is exactly the same reason they would buy gold.

          Governments all over the world buy and hoard gold for very good reasons.

          It’s simply a thing that you can invest in that has performed extremely well. It resists inflation in the exact same way that gold does. It also has extremely low overhead to manage and protect.

          • michaelmrose ・ 10 days ago

            The government can probably keep your uncle or whomever from using the funds as this is ultimately very traceable.

            Also most people won't literally rot in jail until they die to keep the funds out of the government from seizing it.

            Usage of BTC is only really free in lawless countries or when used for clandestine activities. EG its great for buying drugs on the internet and paying randomware authors.

      • kemotep ・ 11 days ago
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        Is it not possible to track all transactions on the blockchain?

        It would then seem trivial to implement a block list of wallets that have engaged in behaviors that the government wants to ban, including money laundering like Tornado cash and other bitcoin tumbling services.

        Cash is the only form of money that has the properties you are talking about. Additionally Bitcoin is not money.

        • Dig1t ・ 10 days ago

          Yeah you can track all transactions, but any blacklist system you come up with is likely to be defeated because of the decentralized nature of the coin. i.e. people can just ignore the blacklist. Also you can easily taint other people’s wallets by just sending them some bitcoin:

          A: Recipients can’t refuse transactions. I can go send all of my friends a few dollars from my wallet that’s on the government list and oops now all of our money is tainted. Do we all just consider our money to have disappeared? No, most likely we continue to live our lives and ignore the government list.

          B: A huge number of people will accept free money even if it puts them on some kind of list.

          C: Even if one of my wallets is on some kind of government list I can still transact with anyone willing to transact with me. A tainted wallet is still useful. For example I am perfectly willing to sell my motorcycle to Bob if he pays me in Bitcoin even if it puts my wallet on a government list. I know that Nancy and Pedro will accept coins from tainted wallets and I want to buy something from them. All of these transactions take place without consent of the government.

          Cash is useful yes. But one big advantage: a SWAT team can break into your house and take your cash away with guns.

          Bitcoin, if the key is encrypted, cannot be taken away by force. I can share my password with my family/friends and even if I’m arrested my mom can still use and move my money for me.

          You can come up with all kinds of systems to make peoples lives more difficult when using bitcoin yes. But at the end of the day the power to forcibly take someone’s money is missing and so all these systems will ultimately not be enough to prevent it being used as money.

          >Bitcoin is not money.

          Anything is money if you use it as a medium of exchange.

      • NewJazz ・ 10 days ago
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        This is a tautological argument.

        What are we going to do next, create a strategic reserve of Cowrie shells? Oh wait those can be used as fertilizer.

        • Dig1t ・ 10 days ago
          ・ 2 more

          Well the key difference between cowrie shells and bitcoin is that the government can forcibly enter your house with guns and take away your cowrie shells. With Bitcoin, a SWAT team can’t take anything away from you without your consent no matter what. That fact is the value. Nothing tautological about it.

          • acdha ・ 10 days ago

            > With Bitcoin, a SWAT team can’t take anything away from you without your consent no matter what.

            This is pure tautology. They can toss you into jail or beat you until you “consent”, and they can penalize any legitimate businesses who do business with you – Bitcoin is designed to make it easy for governments to do that because the public ledger gives them an unprecedented degree of visibility compared to cash.