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In my day, Internet bandwidth was contended, i.e. we sold more bandwidth than we had available because we knew that not everybody would be using their full bandwidth at the same time. That made bandwidth affordable.

Contention ratios were both an art and science and sometimes we got them wrong.

Institutional Bitcoin WILL eventually be contended (rehypothecated), the same as gold or shares are today.

There are people that own gold on paper and there are people that own physical gold in their safes.

We don't want paper Bitcoin, but it's going to happen and has already happened with exchange collapses like FTX.

You own gold if you have a safe with gold in it, you own Bitcoin if you hold the keys for it.

Everything else is trust.

You don't need to trust if you own the keys.

If you wish to borrow against your Bitcoin, you HAVE to trust that your lender won't use your Bitcoin while it is in their custody.

Your comfort level for trust is your personal choice.

Matt 7mo ago

I agree, but I think paper Bitcoin will be a lot easier to call bullshit on than gold. Like I can just spin up an address in 10 seconds and demand my Bitcoin be sent there. Gold is a lot more cumbersome in meaningful amounts, which is the whole reason we ended up with paper to begin with.

You can't really shuffle paper around to appease a run on Bitcoin as easily. It's either in my address or it isn't (which requires very little effort compared to gold), and I think manipulation will be harder because of that. But I could be wrong. My understanding of that world is limited.

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Discussion

Matt 7mo ago

And I actually had a large amount of gold before I liquidated it for a 100% sats position. It was dispersed in valuts I'd never seen with a little in a safe I controlled somewhere.

It was a fucking nightmare dealing with large amounts. So much so that I probably wouldn't have if I didn't have to for the Bitcoin transition. I can imagine that friction decreasing the chances of 24/7/365 EASY global bullshit calling.

mike 7mo ago

Also gold can be impure, so your 1KG bar, may contain more impurities than you think.

But yes, the whole point of Bitcoin is not only the control your keys give you, but the ability to verify by signing using those keys.

We seem to be leaving that philosophy behind rapidly in the corporate world.