Will Governments Attack Bitcoin? with Lyn Alden
Summary
TLDRThe video discusses potential government crackdowns on Bitcoin and if authorities could target user assets. Speakers acknowledge governments taking extreme actions is unlikely currently due to polarized politics and pushback from pro-crypto groups. However, privacy, energy use, surveillance and taxes remain battleground issues. There's now over $1 trillion in Bitcoin exposure in the US, making an outright Bitcoin ban impractical. Complacency is dangerous - the crypto community must remain vigilant in defending the network and its decentralized qualities.
Takeaways
- 😀 There are risks of governments trying to crack down on Bitcoin, but the US currently has a polarized political environment that makes major sweeping action difficult.
- 😯 There is legal precedent of pushback against unconstitutional or unreasonable government overreach related to open-source cryptography and Bitcoin ETF regulation.
- 🤔 Lynn sees the main privacy, surveillance, tax, and energy usage as the main areas where government may try to restrict Bitcoin.
- 😃 Jason believes over $1 trillion in Bitcoin exposure now exists in the US across various holders, making outright Bitcoin bans very difficult.
- 😕 Ongoing vigilance is still needed as Bitcoin's success is not guaranteed without continuing human activity and support.
- 👍 The SEC's approval of spot Bitcoin ETFs and major financial companies offering Bitcoin exposure helps deter drastic governmental action.
- 😡 Historically, one party controlled 70% of Congress and threatened the Supreme Court when gold was made illegal, unlike the current polarized climate.
- 🤨 The government trying to drive Bitcoin's value to zero with policy would face extreme uphill challenges given current exposure/adoption.
- 🧐 Tax penalties and restrictions on certain Bitcoin retirement accounts remain one possible regulatory attack vector.
- ☺️ Cryptography activists legally fought back in the 1990s against munitions export restrictions on open-source code, helping set a strong legal precedent.
Q & A
What are some of the risks that the US government could potentially take against Bitcoin?
-Some risks include increased regulation around privacy and surveillance of Bitcoin users, unique tax penalties targeted specifically at Bitcoin, and restrictions on Bitcoin mining's energy usage.
What are some reasons why the US government today would have more difficulty banning Bitcoin compared to when they banned gold in the 1930s?
-The political environment is much more polarized today, making it harder to take drastic actions. Also, there are many more legal resources ready to push back against unconstitutional actions compared to the 1930s.
How did Phil Zimmerman successfully resist government crackdown on cryptography in the 1990s?
-He published the code in a book, relying on First Amendment protections of free speech. The government eventually had to back down from prosecuting him.
How might the approval of Bitcoin spot ETFs make it harder for the government to take action against Bitcoin?
-The mainstream acceptance signified by SEC approval and big firms like BlackRock trading Bitcoin ETFs makes it politically riskier for the government to crack down.
Where does Brandon think the main regulatory battleground is shifting to regarding Bitcoin?
-He believes the battlefield is moving to issues around privacy, surveillance, taxation, and energy usage monitoring rather than outright bans.
What are Brandon's estimates for how much Bitcoin exposure already exists with US individuals and institutions?
-Brandon estimates over $1 trillion worth of Bitcoin and Bitcoin-related assets are already held by hedge funds, mining companies, MicroStrategy, and other entities.
What does Brandon say is the significance of so much Bitcoin exposure already existing?
-It would make it extremely difficult politically and economically for the US government to try to reduce that $1 trillion to zero value.
What does Lynn warn we still need to be vigilant about even with positive Bitcoin developments so far?
-We still need to watch out for potential increased regulation around privacy, surveillance, taxation, and energy usage related to Bitcoin.
What does Brandon say about whether Bitcoin's ultimate success is inevitable or depends on ongoing human activity?
-He says Bitcoin's success is not pre-ordained or separate from human activity - it still depends on the continued efforts of its supporters.
What were some tactics used in the 1990s to resist government crackdowns on cryptography?
-Publishing code in books to invoke First Amendment protections, and making T-shirts with code printed on them to protest export controls on cryptography software.
Outlines
🤔 Government regulation risks for Bitcoin
Lynn discusses the risks and possibilities of the US government trying to crack down on or confiscate Bitcoin. She examines historical precedents like the ban on gold in the 1930s and more recent legal battles, concluding there are some areas of concern around privacy, energy usage, surveillance and taxes but also roadblocks that make extreme crackdowns unlikely.
😮💨 Main regulatory battlegrounds ahead
Jason agrees the battlefield has shifted away from direct attacks on Bitcoin as an asset, given widespread institutional adoption. Instead he sees privacy, surveillance, energy and taxes as the main areas where Bitcoin the network will continue facing pressure from regulators.
Mindmap
Keywords
💡Bitcoin
💡government
💡regulation
💡privacy
💡tax
💡energy usage
💡legal challenges
💡retirement funds
💡dictatorship
💡win
Highlights
Lynn discusses the political climate in the 1930s when gold was made illegal in the US, noting one party had 70% of Congress and could push through policies
Lynn argues the current US political environment is polarized, making it hard to push through major sweeping policies, especially unpopular ones
Lynn notes the SEC recently lost in court over blocking Bitcoin ETFs, showing decent rule of law and legal pushback still exists
Lynn cites the 1990s precedent of Phil Zimmerman publishing cryptography and relying on free speech protections, forcing the government to back down
Lynn thinks tools exist to push back against extreme government actions against Bitcoin, but vigilance is still important around privacy, tax, etc.
Jason agrees the main battlegrounds now are privacy, energy, surveillance and tax related to Bitcoin
Jason estimates over $1 trillion in Bitcoin and Bitcoin-related exposure already exists in the US, making it hard for the government to go to zero
Jason stresses we can't be complacent and Bitcoin does not just magically win separate from human activity
Lynn brings up the 1930s political climate when FDR had unusual power to take actions like making gold illegal
Lynn notes recent SEC loss in Bitcoin ETF court case shows decent legal pushback still exists
Lynn discusses 1990s precedent of Phil Zimmerman using free speech to resist government cryptography controls
Jason estimates over $1 trillion in Bitcoin exposure likely already exists in the US
Jason stresses Bitcoin does not just automatically win, it depends on continued human activity
Lynn says privacy, tax, energy usage are likely next battlegrounds around Bitcoin
Jason agrees privacy, surveillance, tax are main issues Bitcoin faces next
Transcripts
and speaking of the government a popular
question we get especially in the chat
now is uh people asking and this is for
Lynn is specifically what are the risks
that the government can come after
Bitcoin um now everyone not saying
anyone saying that's a probability but
also as Brandon quidam here at Swan who
we all know and love is he he has a
famous quote where he says uh the
government is hungry and your assets
look tasty if things happen to the fiat
currency he's going to love that I
brought that up as things uh get maybe
more desperate for the government or for
Fiat whatever do you do you potentially
see them coming after Bitcoin are there
attack vectors to be concerned about um
so Lynn I'd love your perspective there
so first of all I point out that with
with so many countries in the world
obviously some countries are more at
risk than others um so to I'll Focus the
rest of the question on the United
States perspective um you know the the
the most commonly cited one is back in
the 1930s when they made gold illegal um
but one point one important piece of
context there was that one political
party had about 70% of Congress uh they
had a super majority they could do it
they could even like you know kind of
pack the Supreme Court and they even
kind of threatened to at certain points
it was a very um like Society all kind
of coester on one poll and was able to
do almost anything uh and so whereas
today in the United States we have a
very polarized political environment um
where it's hard to kind of do really
major sweeping things um especially that
are that would be somewhat unpopular in
addition we saw from the SEC for example
I mean they they lost in court um about
kind of you know their their ongoing
blocking of the spot Bitcoin ETFs and
and their their reasoning was found to
be um you know arbitrary and capricious
um by uh appeals court um and so we
still have decent rule of law and a
fairly polarized environment which means
there's a lot of legal Firepower willing
to push back on things that that are
unconstitutional or otherwise go against
um you know kind of reasonable
interpretations of the law another
really good precedent was back in the
1990s when Phil Zimmerman um you know
published new forms of of Open Source
cryptography for people to use and it
got you know because it was open source
it got around the world and the United
States went after him criminally they
they opened criminal investigations for
exporting Munitions without a license
they were trying to kind of not let this
technology spread too much and so what
he did was he published the code in a
book and says well it's it's words and
numbers it's it's it's speech um and so
he kind of relied on the First Amendment
to protect him and the federal
government had to end up backing down
from that um Even Adam back was involved
in that kind of whole period of time
they would they would make t-shirts to
say this t-shirt is legal to export it's
it's it's illegal Munitions because it
has dangerous code written on it kind of
to show the absurdity of those laws
applied in that context and so I think
that there are a lot of tools that would
push back against some of the more
extreme things that could happen and I
also think that um you know some of the
basically this the SEC approval of the
spot Bitcoin ETFs and the marketing by
Black Rock and Fidelity and all that in
a lot of people's minds somewhat der
risks um the possibility of kind of
major Draconian action against Bitcoin I
do think it's still important to be
vigilant I mean there's there's
certainly going to be taxs around
privacy the private use of Bitcoin um
there's certainly going to be attacks
against um you know right now we're
seeing you know kind of them trying to
get information on the Bitcoin energy
usage of of Bitcoin monitors which is
kind of unprecedented relative to other
sectors and so there's there's there's
you know potentially legal um push back
against that um so there are areas that
I think to be concerned about um but uh
there are a lot of roadblocks
fortunately in the way of some of the
more Draconian types of crackdowns
including uh some of these retirement
structures I mean even if even one of
the one of the attack vectors is like
kind of a unique tax penalty against
Bitcoin and having it in certain
retirement accounts might or might not
but at least there's a chance that would
protect against those sorts of um
specific attack vectors I loved I loved
your whole answer there um and I really
appreciate you bringing up the political
climate around 6102 with Jason on the
call because I have a training video for
all the private guys where I talk about
that and talk about how FDR was probably
the closest thing to a dictator we've
ever seen and the political climate
couldn't be more different so thank for
making me look good there um but uh and
I want to I want to Echo um some of what
Lynn said probably even take it a step
well I would agree that I think the
battlefield has shifted to what you're
saying privacy energy surveillance tax
that that's where the real fight's
goingon to take place it's between
Bitcoin the asset and Bitcoin the
network and I think the ETFs and all the
development that has happened I mean
Bitcoin the asset is here it's it's in
Black Rock ctfs it's in people's
portfolio I've kind of run a rough kind
of calculation more of an estimation
really but if you look at all the
Bitcoin that American owns all the hedge
funds that have Bitcoin exposure all the
mining companies micro strategy you add
up all of that exposure you get a very
large very very large number there's
probably a trillion dollars of Bitcoin
and Bitcoin related exposure in the US
the government just trying to take that
to zero is going to be a extremely
uphill battle um but like Lyn said um we
can't be complacent this is not a done
deal Bitcoin does not just magically win
it's not it's not it's not pre-ordained
in a way which is separate from human
activity and and all of us um but it's
but I think surveillance privacy tax
those are the
[Music]
battlefields
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