Bitcoin and the Reality of Power
Governments no longer fight Bitcoin. They absorb it. The CFTC classifies it as a commodity. Congress passed stablecoin legislation with bipartisan support. The U.S. now holds seized Bitcoin as a strategic reserve rather than auctioning it off. Exchanges operate under federal frameworks. Compliance has become the price of access.
For some observers, this feels like victory. For others, it looks like the slow capture of what was supposed to remain uncapturable.
What it actually reveals is something older and more durable. No asset exists outside power dynamics.
Bitcoin does not escape this truth. It illuminates it.
From the beginning, Bitcoin existed in two worlds at once. At the protocol level, the network processes transactions without regard to borders, identities, or laws. That layer remains difficult to alter. Yet most people interact with Bitcoin through the human layer above it. Exchanges, custodians, on-ramps. That is where power has always lived.
Governments do not need to break Bitcoin to control how it is used. They shape the edges instead. Exchanges become licensed. Cash conversions require reporting. Custodians adopt compliance standards. Certain wallets are treated as responsible while others become suspicious. A rule here. A requirement there. A delay. A threshold. Eventually, freedom still exists in theory while everyday life flows through approved channels.
This pattern has appeared many times before. Silver coins were clipped rather than banned. Gold ownership was restricted rather than erased. Cash use declined under the weight of monitoring and stigma. Each asset survived, though its role narrowed. Bitcoin fits this lineage. Its novelty lies in its design, not in its immunity to power.
The idea that Bitcoin could remain untouched by states assumed a world where power would simply step aside. That assumption never matched history. Power adapts. It absorbs threats. It exploits opportunities.
This becomes especially clear when considering confiscation. When a state seizes Bitcoin, it does not destroy value. It captures it. Early on, the U.S. auctioned seized coins for a fraction of their future worth. Now it consolidates them into a strategic reserve. The shift does not signal belief in Bitcoin as a future currency. It signals recognition of utility. States can suppress retail use while profiting from control. These positions do not conflict. They reinforce authority.
Individuals face off-ramp constraints, explainability demands, and compliance risk. Sovereign actors transact outside retail markets, accept illiquidity, face fewer consequences. Bitcoin becomes a tactical asset rather than a philosophical one.
This helps explain why major powers do not treat Bitcoin as a core reserve. Gold remains dominant for a reason. It settles without software. It carries centuries of precedent. It fits bilateral agreements. Bitcoin remains useful but secondary. A tool, an experiment, a pressure point.
Meanwhile, individuals confront harder choices. Holding Bitcoin now involves tradeoffs. Self-custody means managing keys, updating software, monitoring wallet standards. Sovereignty requires competence and patience. Compliance offers convenience and peace. Some exit to physical assets entirely. None of these choices are wrong. Each reflects a different tolerance for friction.
Bitcoin occupies a different space. It is fragile at the edges and resilient at the core. It resists debasement while remaining vulnerable to control at the interface between code and life. That tension defines its future.
Expecting Bitcoin to overthrow power misunderstands both Bitcoin and power. Expecting it to remain untouched misunderstands history. Bitcoin was never going to eliminate authority. It was always going to change the terrain.
That change still matters.
Bitcoin introduced a form of value that cannot be diluted or erased through decree. It raised the cost of control. It created an option that did not previously exist. That option may be narrow. It may demand effort. It may never become universal. Yet its presence alters calculations on both sides.
Power still wins many battles. It always has. Bitcoin ensures the contest never fully closes.
Bitcoin does not end history. It joins it.