Custodians, ETFs etc can print Bitcoin for free, so there's no 21 million cap on supply unless people demand to hold their own coins.
There's currently no compelling reason for the vast majority of people to hold their own coins, in fact it makes more sense to use a custodian and have a guaranteed offramp.
You just made the compellling case in your first paragraoh
That's compelling for us, not for 99% of people. For them, money is a proxy to products/services, not an ideology.
Guarunteed offramps into the real economy are more valuable to them than self custody.
i feel and agree with the spirit of your take, but such a function would be impossible...and in fact to force individual ownership of cryptographic keys would only be possible with a centralized authority in charge to enforce. thus, the only option is for a critical mass of people to actually want to hold their own keys.. and that may not happen.
They cannot print bitcoin for free, and they have nothing to do with devaluation of said asset and accordingly the market exchange rates. There is the risk of massive withdrawls 24/7, which causes exchanges to hold more on reserves than they might. They don't want to be the next ftx.
This is opposed to the usd, which can be created and destroyed at will by the fed, whether or not a commercial bank issued a loan and crested fake fiat dollars or not.
Similar, but different.
As far as people holding, I highly disagree as well. I have been locked out of withdrawls from savings twice in 2007 and 2008,, and I, like most people, do not keep cash in my brokerage, aka, exchange, account.
Perhaps there will be 1:1 bitcoin banks that charge a small fee in the future. Like custodia wants to do, but with bitcoin not dollsrs.
That would be much better. Not amazing, but better
They can print it for free the same way they print gold for free.
They can always print enough fiat to cover any withdrawals, the same way it works with paper gold.
Practically no one is going to withdraw their paper bitcoin into real bitcoin, the same way no one withdraws their paper gold into real gold.
They are withdrawing to spend it in the *real* economy (which produces all the stuff they want) and they need fiat to access that.
This also makes guaranteed offramps more important to them than self custody or verified holdings.
Huge difference though.
Paper gold is pointless, and mostly just for etf and futures. Nobody really knows the gold supply, not usd created outsode of the fed.
Bitcoin is easily auditable.
The key difference is that if you have bitcoin on say coinbase, and want to buy a gift card at bitrefill, coinbase has to pull actual bitcoin from their wallet and send to bitrefill.
Unlike dollars, where it is just a ledger entry at the various banks amd settlement layers. With the exception of physical cash, which they also must obtain and give the actual item.
The amount of actual cash in the us economy is controlled closely by the fed, treasury, and mint. It is subject to endless printing like mortgages, loans, stocks, sears cards, etc.. currently I believe it is at 2 Trillion, and has been pretty stable for a while.
Huge difference.
Sure, it's an improvement over gold, but the 99% of people who don't care about verifying gold reserves also won't verify bitcoin reserves, they just want exposure to the price.
How many people bother to verify binance and coinbase's utxos and compare this to their accounting books?
Moving coins from coinbase to Bitrefill is only a thing because the banks don't let you hold paper bitcoin (yet). When they do, there's no need for real bitcoin to be in the loop at all unless the user really wants to buy something which cannot be purchased with anything other than real bitcoin (that's the forcing function I'm saying we need to build).
Compare utxo to their own books? What are you talking about?
You don't own a utxo unless you hold keys. Just like you don't own a dollar unless you own coin or cash.
Compare a custodian's utxo set to the custodian's liabilities.
I understand what you're saying, bitcoin is obviously much easier to audit, I just can't see any reason why sufficient numbers of people will ever care.
I agree.
I also fail to understand why I should care? If they want to invest their fiat into bitcoin, then never actually withdraw it, so?
Stupid? Yes.
Pointless? Yes.
My issue? No.
