What's the Point of Central Banking?

A central banker's job is hard. 

They're judged on peculiar goals, such as 'unemployment' and 'inflation'. These narrow goals are widely understood to represent quality of life ( for consumers ), ease of doing business ( for investors ), and integrity ( for governments ). Yet these narrow goals are poor proxies for the broader underlying goals, in an efficient environment where everyone has the same data, and disparate goals. 

Central bankers are in the market, besides speculators ( private profiteers ), and government popularity contests ( public profiteers ). And against those forces, central bankers implicitly defend citizen welfare, and human development.

A central banker's political legacy is therefore skewed by their allegiance, more or less, to any of these poles. Did their policies result in increased economic equality, or inequality?

Maybe that's the real goal of central banking.

---

Further banter :

The Fed is armed with a leaf-blower, and a hoover. Congress is the tree that sheds the leaves. The game is to have only so many leaves on the ground at any one time.

The Fed can't fundamentally fix problems generated by Congress. One is more specialised than the other, and therefore less responsible for the economic welfare of the nation's people.

Recap on how the rules that currently govern BTC are IMPLEMENTED / ENFORCED

• 1. BTC exists as the sum of transactions on a LEDGER run by a validator NETWORK ( 'the bank' ). 64% of the NETWORK is currently anonymous : it could be the mafia, BRICS, or CIA black-ops. But since many of the adults in the finance world support it, I guess they have done their homework on this. What do I know?
• 2. There's no moat to setting up new LEDGERS with the same or different rules, like instances of a boardgame, BTC2, BTC3, etc.
• 3. LEDGERS can undergo mitosis, e.g. BTC and BCH were the same until a point in time. This is sometimes referred to as a hard-fork or net-split.
• 4. Sibling ledgers may follow different rules.
• 5. The market capitalisation dominance of BTC, represents the fact that it presently holds the greatest brand-equity, or user-base. The value of BTCUSD is completely extrinsic to the internal functions of the BTC network, in the same way that a company's share price is extrinsic to the internal ops of the company.
• 6. If there was another disagreement about how to run BTC tomorrow, we could see another hard-fork.
• 7. The UN could hard-fork BTC and upgrade the protocol to make it a CDBC. This hasn't happened yet mainly because the tech is not well understood by states, nor are the economic implications. It's a rich field of research.
• 8. The trending SBRs are a gateway drug to UN-CDBC. Once many states have SBRs, they understand it better.
• 9. USDT is another CDBC testtube. TetherInc can remotely confiscate USDT and remit the backing USD to anyone it wants to.
  

• 10. The absence of a global ban on non-state-cryptocurrencies, is implicitly a policy of mutually assured enfeeblement, as states struggle to comprehend the new technology. Meanwhile, states aren't sure about how to handle NGO-cryptocurrencies, but they are tolerated as long as the Five Eyes appear to tolerate them.

Musings on the Fed's Guidance | Hidden Issues at Play

Powell knows it doesn't matter what he says now, because his job is to update his own advice every six weeks. :P

How do they come up with the 2% inflation ( LT-mean 3.28% ), and 4% unemployment ( LT-mean 5.68% ), numbers anyway? I'm really curious about the rationale.

Best guess is that the job involves some iterative guessing about how deflating the equity valuations would shock the unemployment number, round and round. The arbitrary targets are meaningless.

As productivity increases, unemployment should go up, AI whatnot. If wealth is distributed more evenly, unemployment is not intrinsically a problem. Inequality of wealth distribution seems to be the core issue, but that's not explicit in the mandate. But he would know all this, and have to work with it.

Strange times. But no stranger than any other.

Three types of analysis in discussions

( From coaching folks on analytical philosophy. )

• (a) are we trying to find words to describe a thought which we don't have good words for? ( semantics ) 
• (b) are we sure the words accurately describe the mental model of the subject matters, so we are testing hypotheses about the internal coherence of the model? ( syntax )
• (c) we have confidence in the coherence of the mental model and now wish to test it against hypotheses about the real world? ( science )

All distinct activities, which have clear boundaries in between each type.

Mother of Bubbles

Joie de vivre is the fundamental bubble, which sustains all others. I don't see any particular human experience or construct as necessary, so as I go about the world, I see only bubbles of exuberance.

My ideal for investing in bubbles is roughly :

1. Understand the physics of the underlier.

2. Understand the lens that the market has upon the underlier.

3. Understand the governance model. Are regulators involved? Are there hidden calls and puts? Where are all the exits, and who controls them?

4. Understand the externalities. Explore all contingencies. Unveil network effects and hidden counterparties.

5. Decide how many years of your life you can write off, in order to get involved.

6. Execute very carefully.

7. Decide that is ok to fail, before beginning anything.

Note on the Crypto Asset Sector

This is the output from [ Google Translate ] of a [ note I wrote to practice my Malay ]. The output is unedited, so there may be mistakes, and it certainly doesn't read the way I normally write in English. I may edit this to normalise the English in the future. Today it is just presented here as a handy reference for anyone I might have wanted to send the note to, in English. Sorry.

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1. My Story in the World of Currency Marketing

2. Critical Appreciation in Terms of International Political Economy

3. Five Important Dichotomies

1.

Back in the 80s/90s, when I was around 7 years old, I also issued my own currency. Tech at that time was not very developed, so I just wrote numbers, on orange manila hemp paper. I airdropped the money to my siblings (pitiful for them), and the orange money economy began. The value of the orange money collapsed not long after that, and the economy disappeared, due to the ingenuity of my siblings who mastered the concept of unlimited money supply controlled by radikyat.

For the next 30 years, I did not dare to invest in crypto assets before government regulators issued a strong policy on their use ... so I waited until various parties had caused a huge disaster, and finally after FTX collapsed, only then did I begin studying the crypto asset sector. This is based on the understanding that at any time, any nation that has the weapons to enforce its sovereignty, can ban the use of any foreign currency, including any crypto asset, in its territory in the blink of an eye.

Currently, I consider crypto assets to be an alternative asset class whose principles have not yet been firmly established by any nation. If the government determines that citizens can invest, invest ... with the warning that one day there is also a possibility that it can be banned.

2.

Summary of the current situation in international political economy / EPA / IPE: national currencies are agreements, that is, international tools that enable trade and the transfer of power between certain parties, to protect the security of that party. From this point of view, currency tools can be weaponized by their parties.

However, every nation in the world has not yet banned non-sovereign / non-national currencies, because the presence of non-sovereign currencies can weaken the economic administration of every other sovereign nation. This is called a strategy of mutually assured weakness. Crypto assets are weapons of mass weakness. This is the pattern of governance.

If the entire world could be federated under one government, then the use of crypto currency tools/weapons would disappear, and their value would decline. But we do not expect this to happen in the near future.

3.

**Currencies** can be classified in detail. The following dichotomies are separate, and do not overlap with each other:

• ... First Dichotomy: there are 'national / sovereign' currencies, and 'non-national / non-sovereign' currencies;
• ... Second Dichotomy: there are 'commodity / intrinsically valuable' currencies, and 'fiat / extrinsically valuable' currencies;

**Transfers** of currencies must also be classified in detail.

• ... Third Dichotomy: 'commodity / intrinsically valuable' currencies can be carried out 'physically', or 'representatively / in accounting notation'; while **all transfers** of 'fiat / extrinsically valuable' currencies are only 'representatively / in accounting notation';

(Although people consider national paper money to be 'physical' currency, paper money is actually 'fiat' currency, based on the understanding that paper money is an accounting symbol with no intrinsic value. )

• ... Fourth Dichotomy: **representative transfers** of currency can be done on any medium, including 'non-electronic medium' (e.g. paper money as a token, or accounting written on paper documents), and also 'electronic medium' (e.g. electronic tokens, or accounting stored electronically).
• .. Fifth Dichotomy: *representative transfers in accounting** can be done on a 'cryptographic ledger', or 'without a cryptographic ledger'... where crypto can actually be done on paper too, although it is not convenient. So when the concept of 'sovereign/national bank digital currency / CBDC' is presented it may not involve crypto.

---

End of original note. 

Moving on ...

How Does Currency Work in General?

"3. Five Important Dichotomies"

Between  sharing this, and making my dinner ... it occurred to me that there may be a bit of work to be done here vis-a-vis an analytical philosophy of money, i.e. 'what does it mean, when we say, money? or a 'dollar/unit-of-other currency'?

From what I gather from recent conversations, broadly there is an INFLUENTIAL narrative that the value of money lies in its repayment, and so far I have briefly argued that any promise of repayment depends on an IMPLICIT promise of limited supply. In more detail, any REAL repayment is CONTINGENT upon an implicit ASSURANCE of a specific VELOCITY of money supply.

After revisiting the five dichotomies I jotted down in the note above, I found that my third and fourth dichotomies lack clarity, and may imply some confusion. 

Putting these two broad concerns together, it seems there is a need to articulate a Kuhnian paradigm of what money is.

But I will only attempt this after dinner. ( It was in the microwave, and now I have to eat it. )

Sabah has a new TYT

18 December.

This week I read about the appointment of Sabah's new TYT ( tuan yang terutama, the head of state). 

The TYT role is similar to a sultan's role in those states with 'Malay rulers' - except a TYT does not have the status of 'Malay ruler' - therefore the TYT does not preside over Islamic matters, and so Sabah's head of Islam role short-circuits to the Agong himself. The TYT also represents Sabah on the Conference of Rulers, but as ... non-Malay-rulers do not participate in matters pertaining to Malay rights, Islam, or the appointment of the Agong and Deputy Agong, and ... since the COR meets on few other matters, therefore ... the role of the TYT on the COR is largely symbolic. The intricacies of this pattern extend into the protocols of Sabah itself. 

Head of the legislative body (state parliament). Where Malaysia has a Prime Minister appointed by the Agong, Sabah has a Chief Minister appointed by the TYT.

Circularity / 360 feedback. However, the TYT himself is appointed by the Agong, ON THE ADVICE of the CHIEF MINISTER.

The appointment of the TYT has attracted controversy. I found a minimal history of the relevant issues on Wikipedia.

https://en.wikipedia.org/wiki/Musa_Aman#Controversy

---

Link to article on the Chief Minister, who advised the Agong, to appoint this TYT : https://en.wikipedia.org/wiki/Hajiji_Noor

Recent coalition history :

https://en.wikipedia.org/wiki/Gabungan_Rakyat_Sabah

Recent party history :

https://en.wikipedia.org/wiki/Parti_Gagasan_Rakyat_Sabah

Neurodivergence is a Pleb Term

Summary of a short exchange I had with a psychologist, which reflects views I have had since college in the early 2000s. I might be wrong, but to be clear, my view is :

1. The term neurodivergent is in the dictionary.

2. The term is furthermore used as jargon in the field of psychology.

3. In the field, the term refers to statistical deviation from a set of behaviours deemed to be normal.

4. I have referred to neurodivergence as a 'pleb term' .

5. I make this reference because I do not find it agreeable that the field has defined a set of behaviours deemed normal, without clearly highlighting that these normal behaviours are defined based on cultural norms, which are social facts, but of no other meta-ethical foundation. ( My view is that all moral positions are arbitrary, and to pick one as normal is a blight upon society, and the intelligence of people. )

6. Moreover it is disingenuous to frame psychology as a discipline, at this point in time, as having a seamless rooting in the natural sciences. So norms in psychology are neither rooted in clear meta-ethical foundations nor the natural sciences ... they are very much cultural norms.

7. I believe it is appropriate to refer to people who endorse specific cultural norms as 'plebs', and therefore I believe it is appropriate to refer to neurodivergence, which assumes specific cultural terms, also as a 'pleb term'.

8. What is most annoying is the concept of diagnoses based on social behaviour, which are classified as neurological instead of cultural. With regards to what sort of social behaviour is deemed normal, much of these are differences in cultural preference. Yes, all culture supervenes on neural states. No, please do not refer to behaviours as neurological rather than cultural, UNLESS THERE IS A WELL-DEFINED NEUROLOGICAL PATHWAY to be declared diverged from.

---

Further banter :

... the designation of a normal range of behaviour is political engineering. Just because most of us feel good when people smile and return smiles doesn't mean 

• (1) the underlying neural pathway is simple, or thoroughly mapped, 

• (2) that anyone should be socially obliged to comply with a social norm, even if that social norm has a simple or thoroughly understood underlying neural pathway. 

The socio/cultural elevation of 

• (i) a high frequency behaviour to 

• (ii) an informally expected behaviour (see high-context culture), to 

• (iii) a formally expected behaviour (low-context culture), 

is a very distinct progression, that needs examination, lest people abuse each other about expectations without having established rules of abuse. 😛

Further banter :

re :"study of psychiatry is by definition difficult to formalise, whereas there are many existing bridges to neurology, and we still know so little about the sum of all parts" : 

I think we are in complete agreement about (i) the state of the art (ii) the reasons for the current state of the art.

We probably differ in 'socio/cultural/political' preference, about what sort of language/behaviours should be condoned in the public sphere, given (i).

I have a specific view of the world which is quite boring ... I actually find that every iota of my personal experience is quantifiable, so I am not waiting for the rest of the world to come to the same conclusion. I simply live my life, and exert my politics in the world, based on my personal experience. 

Culture is software ; meat is wetware ; as information systems, cultures are much, much simpler than meat. Which is why the current attempt to implement AI by modelling the meat is so wasteful. 

All the best, to everyone else, who does the same from their various normal/non-normal points of view 😃

 

 

Discussion on Physical Mechanics of Valuing Cryptocurrencies

Point 1 :

"they are breaking the unit of Bitcoin into Satoshis, haha, so much for limited supply"

Response 1 :

I'm not sure that you understand math. Shifting the unit of gold from ounces to nanograms would do nothing to the value of gold. The physical supply is the same.

Likewise the physical supply of Bitcoin is constrained. 

Of course the choice to value Bitcoin is binary, such as the choice to value gold, or maize. The population of investors could instantly choose to value either at near zero - the only reason they don't is due to booked accounts receivable which they don't want to give up.

There are no intrinsically valuable things on earth, not meat, not minds, not feelings, not love, not family, not friendship ... each of these is given meaning by some idiot. Some idiots happen to have have BTC / USD / gold / maize accounts receivable, and that's why those things have value. LOL

Point 2 :

"there is no PHYSICAL limitation"

Response 2 :

Physical supply is limited by a machine, and the use of the machine is by consensus of users.

The users can choose to use a different machine, but as long as they use this one, supply is limited. 

Surely you understand the nuance, or, you don't actually know how the machine operates

Point 3 :

"the physical machine limits a NON-PHYSICAL SUBSTANCE ; NFTs are an example of a NON-PHYSICAL SUBSTANCE and we have seen that market crash"

Response 3.1 :

An NFT is a pointer to something that isn't meant to be used as a unit of currency. Those are like traditional trading cards, we know exactly how those markets work, so let's not get distracted here.

Reponse 3.2. :

3.2.1.

The USD is basically a tool for the communication of value. It is a contract regarding the supply of USD, and the ability of anyone else to use USD as a meaningful denominator of other contracts i.e. payments. The USD has no intrinsic value, it is based on a promise of supply limitations. ( The notion that it is based on the promise of repayment is a strawman, because repayment is only meaningful in the context of the promise of limited supply. )

In the paragraph above, you can swap in any state currency. 

Imagine if NGOs like the Methodist church printed their own currency, MCD, you could swap that into the paragraph above for USD. The only reason you would trust MCD less is because MCD is a lesser known entity, and fundamentally you have no control over MCD or USD money supply.

3.2.2.

Now imagine there was a technology to limit XYZ currency supply. The methods of 1. decentralised ledgers, 2. cryptographic hashing, basically combine to give you a bank where anyone can check money supply at any time ... the moment money supply changes, every holder of the currency may know it quickly and cheaply. This is the ONLY technological advancement that has been introduced. ( Only  a small lie, for the purpose of this point. ) If they don't like the rules of the bank, they can start their own bank ad infinitum, which is called a netsplit, and you can refer to BCH vs BTC for example.

The fact that people would go long BTCUSD simply tells you how little faith they have in the US government's promises of limited supply. 

The fact that people go long BTCBCH, and the difference in market cap of BTCUSD vs BCHUSD, tells you something else, which is non-trivial.

---

Further banter :

Well you say, 'if there is a rock, and rocks build houses, and people want houses, so rocks have present value, anything else is speculation', that's a valid lens. 

Symmetrically, I say, 'if there's a rock, and some clown in jersey wants to trade it for a wooden house, so rocks have value, anything else is speculation', that's a valid lens too.

The only difference is you put faith in the imagery in your head, and I put faith in the imagery in mine. Digging down to the fundamentals of what people do in their heads, is probably beyond the scope of a comment thread on LinkedIn. :)

Further banter :

we could go into anthropic principles, and life goals, and the architecture of political influence begining with the grassroots and ending with the state. But, to what end? In a comment thread like this, there's little room for specifics. If people disagree and want to drill into fundamentals, those are long and deep conversations.

In my own life, I'm basically a hermit. I live on military rations, repair my clothes, and drive a 20-year-old car, and budget everything around a minimum wage job. But I keep tabs on fashion, food, cars, and macroeconomics because other people care about them.

So nearly nothing in life depends on what I value it as. Mostly economics is about other people's values. :)

So the value of X is whatever I can get paid for X right now. Everything ELSE is speculation. The intrinsic value NOW is what it is now. The intrinsic value in the FUTURE is speculation. 

Exporting US Inflation : Bitcoin is a Ploy

The proposed Federal Bitcoin Reserve would be a fundamental step in the global evolution towards Central Banked Digital Currencies. But it remains unclear if this threatens, or enforces, American Exceptionalism and USD hegemony.

---

Running the simulation :

• 1. US enacts BTC reserve in 2025.
• 2. US borrows USD at T_IRR, and goes long BTCUSD ; BTCUSD goes up ; at this time roughly 78% of US debt is still held by domestic counterparties, and 22% is held by foreigners.
• 3. BTC_IRR > T_IRR, with near certainly in the 5-year-term, and probably in the 15- and 50-year-terms. ( Caveat : 8. )
• 4. ( Reversal of 2. )
  As BTCUSD goes up, US goes short BTC, and repays its USD debt. BTCUSD price velocity is thus moderated by the rate at which the US sells BTC to pay off USD debt. 
• 5. ( Effects of 4. on 3. )
  Therefore this strategy works for the US if it holds the reserve for a long-enough time, until most other nation-states have BTC reserves also, constricting BTC_ACTIVESUPPLY, such that the BTCUSD price has appreciated astronomically from 2025. 
• 6. ( Effect of 4,3. on DXY )
  If the US uses its BTCUSD investments to pay off USD debt, it just means that the US is chopping ( or at least throttling ) USD M2, tautologously moderating the reason for BTC price appreciation which makes it a bankable investment in the first place. ( There may be other reasons that BTC is a bankable investment. )
• 7. ( Logical conclusions of 5. )
  If all nation-states horde BTC, the end-game is the same as if no nation-states horde BTC, except that now there would exist a common understanding of how digitally constrained money supply works. This puts the long-term BTCUSD price much higher than it is in 2024, but not at infinity, as it becomes some clarified function of global M2 ( all commodity prices are some murky function of global M2 ).
• 8. ( Possible implications of 7. )
  In some near-future when ( a sufficiently powerful majority of ) nation-states, and global monetary governors (such as the IMF) have reached a comfortable relationship with BTC pricing, then the case for uniformly replacing BTC with a more sophisticated global currency technology would be clearer to all. This is the general evolution-or-obsolescence case for BTC, which may see BTC either 
• 8a. ... adapted into a global CBDC ( where the UN-or-equivalent controls all the validators, or splits the network ), or 
• 8b. ... being banned, with nation-states opting to switch from allowing non-state cryptocurrency use, to banning non-state cryptocurrency use. This could be supplemented by the introduction of a per-state CBDC coupled with international CBDC protocols, or a single unified CBDC ( other than a direct descendant of  the BTC network ) at the global level. 

There are many reasons why each of these options is a pro/con for each state. To be elucidated elsewhere. Modelling these would fun.

---

This note was originally titled, 'Bitcoin as a Global Reserve Currency : Price Stability, then Evolution, or Obsolescence?'

I am also starting to wonder if the US BTC Reserve enactment would throttle the price growth of Bitcoin, while boosting valuations for non reserve currencies like LTC. It's basically increasing correlation between USD and BTC. So simply by holding BTC in reserve, there's a fed-put on the BTCUSD.

These are just thought floating around in my head that I've been scribbling down. No proper research has been done about this and there's probably some critical flaws in my hypotheses.

---

Further banter :

thanks. I'm just here for free tuition.

(1/2)

- The intended purpose of a thing is irrelevant to the functions it actually fulfills. There are now 'newer technologies than bitcoin for ( all sorts of things related to decentralised immutable ledgers )'. 

- BTC's value at the present is (FWIW) due to its (admittedly outsized) role as the 'lingua franca' for the asset class ... at about 60% of capitalisation. 

- The 'intrinsic value' of any fiat ( USD, BTC, etc. ) is basically zero, and its extrinsic value is a bunch of trust in a promise of limited supply. (There's a commonly cited argument that the value of state fiat is down to the state's promise to repay state debt, but that's a flawed perspective as real repayment of state debt is contingent on the more fundamental promise of limited supply of state fiat.) State fiat, or currency in general, functions as a language for denominating obligations, and has no intrinsic value. (You may disagree, I'm just elaborating on my position.)

- Back to the 'current' function of BTC. ( I have a word limit. Hah. ) Reports seem to glomp Fed and Tresury holdings https://www.federalreserve.gov/data/intlsumm/current.htm . 

(2/2)

- Regardless of whether the Fed or the Treasury holds it, the reserve asset would be 'on USGOV' from the point of non-US parties.

- We're discussing the proposal that USGOV could add BTC to its reserve assets. There's no reason to to do so, EXCEPT, that the asset has been marketed to public as a hedge against USD M2 expansion, and every ex-USGOV is buying it as a potential replacement currency vs the USD. Of course you wouldn't be able to agree with this point if you disagreed with the 'intrinsic value of any fiat is zero' specified above; but assuming this is true, then by extension ...

- The very act of USGOV holding a large quantity of BTC, should cause an increase in USD-BTC correlation ( which you seem to agree with ), which implicitly runs contrary to very 'current reason' that people hold BTC, regardless of its originally intended use. At some magnitude of USGOV holdings of BTC ( because we are examining the proposed strategy ) this tempers or outright reverses the rise of BTCUSD.

- At that point, USGOV doesn't even need to sell BTCUSD, it just holds it as a reserve currency. And the THREAT of a BTCUSD sale, followed by a reduction of M2, would temper / reverse BTCUSD price growth even more.  

 Further banter :

Yours is a commonly cited valuation of currencies - I have argued elsewhere in this comment tree that 'the repayment reason' is a strawman, which fundamentally depends on 'the limited supply reason'. Briefly :

There are actually three parties involved in the use of a currency.

• - ( A : they who control its circulating supply )
• - ( B,C : they who use it to denominate obligations )

B and C can only use a currency if A sticks to a promise to reasonably limit supply. The unlimited supply of the currency by A would deflate the value of the currency over time, thus making it useless to B, and C as a denominator of value.

This is true of all fiat ( non-gold backed ) currencies, regardless of whether that fiat is issued by a state ( USD, EUR, etc. ) or a decentralised community bank ( BTC, BCH, etc. )

Further banter :

Facts : it's NOT unlimited, because when it IS unlimited, you get Zimbabwe. B and C can only have the faith to use A's currency, because there's an implicit understanding that the expected rate of inflation is low. If it were high, B and C would simply switch to another currency.

The technology of distributed immutable ledgers, simply lets anyone set up their own currency. It's just plain old NGO-issued currency, BUT WITH MUTUALLY ASSURED CONTROLS OVER SUPPLY.

Caveat : average cryptocurrency user has no idea how it works ... hence no actual control over its supply ... but for whatever reason they trust the NGO community bank more than states. So they go long one fiat, and short the other.

Nothing complicated. Just a plain old loss of trust, resulting in trades. But at scale, it becomes stupidly interesting lol. Now BlackRock ( you know the news ) 

Further banter :

Well, the problem is partly because US and USD exceptionalism is an offensive play to begin with. No one knew how to get around it because all the other roads (currencies) sucked.

The technological innovation was simply to create a road (currency) that any NGO with a communications network could use to set up a central bank with controls visible to the users.

With that in place, at this point, it is US/D exceptionalism which is under attack. The US has various levers for defense. It can, as you say, go deflationary and spike unemployment ... or it can do (one of the other funny/stupid things we're discussing). 

Further banter :

the 'why haven't they just banned BTC yet?' Is one of the more interesting questions.

So far there are 2-3 angles I have on this :

• 1. It's a mutual assured enfeeblement strategy, to backdoor all state-fiat, since every state doesn't want too much strength in any other state's fiat.
• 2. It's a deer in headlights reaction to not knowing how states can efficiently use decentralised ledgers, blockchains, CDBCs, for defense or offensive purposes. So everyone just tolerates it while they look at testtubes like Tether, where TetherInc can remotely confiscate any USDT and remit the backing USD to TetherInc cooperates with.
• 3. States have some vested interest in the existing BTC network. No idea who the 64% of anon validators are right now. Right? 

Further banter :

No, no, not quite.

"Bitcoin is simultaneous long-and-short position versus global carry" - I finally got to read the details on December 2024's latest jargon.

Bitcoin is not so 'short global carry', because BTC's price in other currency terms will deflate if those currencies are rebased ( monetary deflation ). This is also why the creation of a US Strategic Bitcoin Reserve is both a short-term booster, and a long-term dampener on the BTCUSD pair. 

First of all, everyone is familiar with the concept that if the US has an SBR, then SBRs become mainstream, and 'every' country will have one too.

In the short-term, SBRs drive down Bitcoin supply, and thus drive up BTCUSD. But in the long-term, the very feature of Bitcoin which gives it value is eroded ... Bitcoin's value is mainly derived from decorrelation with the global M2, or the unhinged money printers which are the collective fiscal irresponsibility of the world's governents. So by the time every state has Bitcoin, Bitcoin's price appreciation will start to stabilise, implicitly becoming a low-tech CBDC.

At that point, it's rather likely that the UN either (a) builds a CDBC protocol around using Bitcoin, (b) forks Bitcoin or establishes an alternative which is more technologically sophisticated which becomes the UN-CDBC, or a protocol around a bunch of per-state CDBCs. The (b1, b2) contigencies are that Bitcoin continues to co-exist with UN-CDBC, or becomes outlawed/denigrated.