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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.

Liberty Farmer 1y ago

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.

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Discussion

gsovereignty 1y ago

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).

Liberty Farmer 1y ago

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.

gsovereignty 1y ago

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.

Liberty Farmer 1y ago

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.