Is there an explanation for why this won't happen?

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Bankers gonna bank.

True true

Damus has too many bugs.

They can’t make more #bitcoin ?

Fixed supply will kill paper btc over time if they try to create paper btc

At low prices real stackers are gonna gobble up all the corn

How are they going to deal with the ones who are smart enough to self custody? Are they going to do any proof of reserves on a regular basis or are they going to subject themselves to the ridicule and destroy any semblance of trust and credibility they still have?

Governments hoard gold but paper gold is still used to manipulate the price. I’m not sure tbh. Was hoping someone bigger brained than me could answer

It will be quite hard, because unlike gold, Bitcoin supply won’t double in the next 100 years. Also unlike gold, people can audit third party and self custody. You can’t easily audit gold by your self nor self custody a really large amount of gold.

Yeah good point. Everything is verifiable on the blockchain. That said, FTX managed to create paper bitcoin before the implosion.

They will most likely try. But I don't see it last because it's so simple to verify.

If they can't provide their proof of key, would will trust them? Exchanges can do that with plebs because they are mostly unregulated casinos but that's not going to work for larger whales.

In case of hyperbitcoinization it will be difficult to keep the exchange rate low (or in case of hyperinflation of major fiat currencies).

Different exchange rates will probably emerge (the "official" one on public paper trading markets, and the real on in p2p markets).