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Don’t know about “wrapped bitcoin” but as long as it’s not “paper” bitcoin, i.e, it counts against the $21M, I’m inclined to count it as “real.”

Purists bitch about all kinds of things, but I’m starting to think MSTR, ETFs, (and maybe even this wrapped bullshit) are just different custody solutions that come with trade-offs, one of which is counterparty risk.

People *should* act in their self-interest, do what will preserve their wealth, take care of their families. If they feel safer with Saylor holding the coins, fine. If they feel safer holding themselves, fine.

Either you believe in the tech or not. If the tech is as advertised, the limited supply and inability to censor should coopt the institutions and governments, not the other way around. If it’s easily capturable, once it’s in Saylor’s coffers, then it wasn’t really freedom tech to begin with.

They always say bitcoin is for enemies. They should add: “Even large ones.”

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Discussion

WARTIME PSYCHOPATH™ ☣️⚔️ 11mo ago

Should have stopped at "but"

Sam of the River 11mo ago

It's clear you have much to learn.

Purp1eOne 11mo ago

maxis will maxi. I just figure out the best way to make the most amount of money at that moment in time. Although 90% of that is bitcoin and mstr I do "gamble" with all kinds of other assets.

If that makes the bitcoin maxi cult mad so be it.... its my money and they preach all the time about Individual sovereignty so.....

Chris Liss 11mo ago

exactly -- no one is telling them they can’t custody how they prefer.

BITwise 🐳 >>= RIGHTish 11mo ago

wBTC is a bitcoin IOU represented by a shitcoin.

You deposit BTC

They issue you wBTC shitcoin that's "pegged 1:1 against bitcoin fiat price".

What happens to the deposited bitcoin? Is it full reserves? *bigwink* that's for me to know and you to find out.

Chris Liss 11mo ago

Right, I’m not saying that would be *my* preferred form of custody, but if Trump bought $47M worth of it, it’s the same as if he bought it via an ETF, right? An IOU with legal recourse, but counterparty risk.

BITwise 🐳 >>= RIGHTish 11mo ago

Devil is in the details. An ETF at least has oversight and legal responsibilities around reserves and is regularly audited.

Issuers of wBTC only have to say: trust me bro. There is no audit (that I'm aware of). For all we know wBTC issuers hold just as much bitcoin as FTX did.

Chris Liss 11mo ago

No doubt, there are different details with respect to the nature of counterparty risk. But if you’re removing a bitcoin from the supply to own the IOU, it’s real IMO. If they’re FTXing it though, and rehypotheticating then that’s a different story.

If someone goes in big with $47M and removes coins from supply, that’s real to me, poor choice of custodian notwithstanding.

BITwise 🐳 >>= RIGHTish 11mo ago

The rehypothication is the entire problem. There is zero guarantee that they are not rehypothicating. And gun to my head, if I had to guess if they're doing it, I'd say yes. Greed is powerful. Don't forget we are talking about the crypto market here where greed is leveraged.

wBTC was created so shitcoiners can maintain BTC price exposure and hold tokens on the issuing shitcoin protocol without having to go through the process of unwinding to Bitcoin which runs on a separate protocol. It is commonly used in layer 2 shitcoin "decentralized" exchanges . Many of the penny stock type shitcoins only trade on these dex's so this allows shitcoiners to have a "cash balance" on that shitcoin protocol for immediate trading.

BITwise 🐳 >>= RIGHTish 11mo ago

I logically agree with you when you say if it locks bitcoin up, regardless of custodian, then it's [representing] real bitcoin. That's assuming it's actually truly locking up bitcoin. Big big BIG (and dangerous) assumption though.

But even suspending disbelief and trusting that it is... it's a bit like a blood diamond. Yeah it's a diamond but what did it take to produce?

And worse yet what is it being used for? To scam more fools.

Perpetrated by the first family no less.

Chris Liss 11mo ago

in that case — maybe not real. I mean there is *some* concern with MSTR and the ETFs even. Those are well regulated, large institutions, but so was Enron. Same with coins on exchanges — have they done proof of reserves?

I guess it’s a fine line between convenient custody with counterparty risk and not removing it (for sure) from the supply.

And the big risk of self-custody (losing the keys) is actually the opposite of rehypothetication.

But large institutions are the preferred custody model for many, and I’m fine with that, though proof of reserves should be required the way banks are required to own treasuries.

BITwise 🐳 >>= RIGHTish 11mo ago

End of the day, that's why bitcoiners say not your keys not your coins. It's the only way to know for sure. Everything else is a nonzero custodial risk.

All these structures you're talking about are simply the legacy system rebuilt on a digital platform and effectively produces no real solutions. It only presents solutions to problems they created themselves - no different from the legacy fiat financial system as a whole.

Yes, look at Enron. Look at FTX. *insert find the difference between these two pictures meme*

The only real innovation here is the bitcoin network. If it sits anywhere else, you're just risking your wealth for price exposure or convenience.

Chris Liss 11mo ago

I understand that, but let’s say you’re 70, and your nephew holds the coins in cold storage. Allegedly. That’s also counterparty risk — maybe he took your funds and did something else with them.

People are not ready en masse to self-custody with the current tools, but MSTR surely is ready to put the stock and bond market’s capital into it.

So the question is do those things coopt bitcoin (fake paper bitcoin on legacy financial rails) or does bitcoin via MSTR and the ETFs swallow the financial system into its rails (held in cold storage by MSTR.)?

Dave🐸 11mo ago

your keys: bitcoin

ETF and MSTR: IOU

PV🤙🏽

b799e60f... 11mo ago

And we all know what happens with IOUs right?

b799e60f... 11mo ago

Truth is: not your keys, not your coins.

I see nations moving towards paying in cash and card to pay via QRCode (Brazil, for example). The leap is high, but not impossible.

Those who trust other men to secure their treasures, will be stolen and raped by the same men.

Believing in IOUs will put people in the same position of imminent domain in the US, where the government said fuck it and let’s steal these fuckers gold (Americans) and make fiat a standard.

The point is very simple: you do whatever the fuck you want, as long as you do not fuck with other peoples property and/or rights. Wanna bet on ETFs and stocks? Go right ahead. Wanna bet on Bitcoin? Sure, go ahead. Everyone will deal with the outcomes based on the path they choose.

BITwise 🐳 >>= RIGHTish 11mo ago

I think the world is not necessarily black and white. Things like ETF and MSTR sit somewhere Grey. Yes ideally everyone should self custody but that's not realistic in the short term or even in the relative long term for that matter.

I believe key is looking at whether it is a net negative or positive. ETFs and MSTR have gone a long way to onboard a certain population that would otherwise never have any bitcoin exposure or even hear about it. Now those people are paying attention.

Having your family members hold keys for you is absolutely a net positive. Not your coins but theres reputation and family harmony holding parties accountable. Another net positive.

wBTC does very little for advancing bitcoin in the long term. It only enables more shitcoinery and degenerate gambling. Yeah you're free to do it if you like, but it does nothing to advance bitcoin and sound mo by. It only greases the shitcoin casino wheels which in turn gives bitcoin a bad rep. Net negative by far.

Chris Liss 11mo ago

Yeah, you’ve sold me on wBTC being out of the question, not that I was ever considering it as an option for me or anyone I know. Just whether it was “real” BTC for the purposes of the scam coin buy or not.

But the bigger question isn’t just whether MSTR and the ETFs are net positive, but whether bitcoin via those vehicles will co-opt the legacy system or vice-versa.

BITwise 🐳 >>= RIGHTish 11mo ago

Yeah it'll be interesting to see how that plays out. But im not reslly worried. I am in the camp that they coopt the legacy system and not the other way around.

The economic basis of bitcoin is sound. The problems with our current economy are painfully obvious, even to no-coiners at this point. The solution is bitcoin but there is a psychological barrier to adoption. The ETFs and MSTR go a long way of breaking that down and legitimizes bitcoin to many who would otherwise yell scam.

When it comes to those who control the ETFs and MSTR, control of bitcoin is based on hashrate not on # of coins owned. This is not an equity and bitcoin isn't a company. If any of the ETFs or Microstrategy decide to fork and do their own thing or attempt to wrestle control, they have no power unless they fork or attempt a 51% attack.

A 51% attack does nothing to change the actual underlying programming of bitcoin and will only be marginally effective in allowing them to censor or fasttrack certain transactions in the short term. Having 51% is not even a guarantee. Consensus still applies and eventually even Blackrock can run out of money.

If they choose to fork, again consensus will apply. They'll no longer be compatible with legacy bitcoin (real bitcoin). Unfortunately it's the shareholders who will suffer holding an ETF now backed by a shitcoin (Blackrock Coin). I'd be very surprised if anything more than a negligible amount of hashrate flows into a Blackrock coin. We've seen this play out before re: BCH/BSV

2Pac 11mo ago

There is no legal recourse with wBTC, it is built on a centralized ledger Ethereum Foundation with a 70% premine, proven not to be immutable, see DAO hack. Learn what ETH is and it would worry you too.

Chris Liss 11mo ago

I once tried to understand ETH, gave up.

2Pac 11mo ago

It’s absolute dog shit that’s all you really need to know

TheBitcoinManual 11mo ago

It just seems unnecessary, BitGo was approved as a custodian for the 21Shares' US Spot ETF, so could have gone for that option too. You're also dealing with the operational risk of the multi-sig that's constantly updated as capital flowing in and out that backs wBTC and the smart contracts that issue them, that oracle could be compromised and issue more wBTC than is held

But hey to each their own!

I'll stick to on-chain, there is no second best

hodlpleb 11mo ago

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