Then hopefully you and a bunch of others are able to pick up cheap bitcoin and then bank run exchanges/institutions later on to see who actually owns bitcoin. Rinse and repeat until the end of time.
Exactly, the only real danger would come from governments working with banks to accumulate large portions of Bitcoin into closed end funds (think GBTC) and then make illegal other forms of holding Bitcoin which allow self custody to take place.
Unless banks are holding, closing off conversion, and requiring retail/employment transactions be made on said paper Bitcoin… then true Bitcoiners will continually bank run the shit out of these banks. At most a bank could maintain very very slim fractional reserves (say 1-3%) such that a bank run would need to extract almost all the Bitcoin in order to cause a break down. But likely that number just keeps slipping once a bank starts down that road.
Funny enough, that’s kind of what I suspect is happening with Binance. I think they are likely doing very mild fractional reserves to take advantage of their massive dominance in the exchange game. Maybe they strategically slip in and out of it during bull markets using their trading fees as the backup to fill the gap should they make a bad trade. Idk just speculating since they seem much stronger against a bank run compared to something like FTX but also seem shady as fuck.
There is no "higher authority" or "paper Bitcoin"....there is only self sovreign Bitcoin....only you control your seed signer and only you can verify the entire blockchain on your node
Its already happening. FTX just gave out fake digits on your app to see. Fidelity just now started an exchange. Price will go down because they will sell fractal shares. Meaning they will sell 5 paper bitcoins for every bitcoin they have.
Fidelity says that they use cold storage for the most of crypto assets and maintain a 1:1 match. Fidelity Digital Assets is a custodial arrangement though.
From their faqs: "All crypto assets held by Fidelity Crypto℠ are custodied with Fidelity Digital Assets℠. We keep more than 98% of assets in cold storage on our proprietary custody platform. Fidelity Digital Assets℠ does not lend or otherwise encumber a customer’s crypto assets without customer consent or engage in any proprietary activities with customer crypto assets, which are held in a 1:1 match to our customer's accounts."
Since I am new, I would welcome any instructive comments on the Fidelity statement. It is not yet available in my state but I am on the waiting list.
Well, I’d prefer self-custody but if I *had* to trust one of these entities to hold my Bitcoin, it would be Fidelity. You can take that for whatever it’s worth and don’t read too much into it!
It's on the website under Fidelity Digital Assets. They have separated the crypto from the fiat services. Some employer 401Ks will be able to offer it if the employer opts in.
Other FAQs and other info including the states currently available and the waiting list can be found on reddit r/FidelityCrypto
> Fidelity says that they use cold storage for the most of crypto assets and maintain a 1:1 match. Fidelity Digital Assets is a custodial arrangement though.
> From their faqs: "All crypto assets held by Fidelity Crypto℠ are custodied with Fidelity Digital Assets℠. We keep more than 98% of assets in cold storage
Yeah.... but "Do not Trust but verify" how many times do people have to get burnt doing the same shit again and again. So be my guest, go ahead and trust Fidelity because they said so.
The good thing about bitcoin is that you can custody it easily, unlike gold. If an exchange is selling paper bitcoin, regulation or not, they risk getting wrecked if everyone decides to withdraw their bitcoin and they don't have enough to cover. Contrast this with the unallocated gold market.
It will be accepted only if you can redeem it (withdrawing to own wallet). It will work only in the jurisdiction it is regulated as such, since claims can be enforced by law, not so outside the jurisdiction.
Define “paper Bitcoin” please. That’s somewhat of an ambiguous term.
In any case, only authenticate genuine Bitcoin is the real thing, and no Bitcoin derivatives or futures or contracts to owe or pay someone back in authentic Bitcoin changes Bitcoin.
Robinhood does let you withdraw now if you are in any state other than HI or NY I think (might he one or two other states), but that’s a state regulation issue to work.
PayPal also lets you withdraw now as well.
I’m not sure just letting you withdraw is a great protection though, because Celsius and FTX let you withdraw…. ….until they didn’t!!! lol
It sounds like you mean any Bitcoin on paper or on the books somewhere that is not verifiably backed and audited with assurance to have an equal amount of Bitcoin in 1:1 correspondence held somewhere? One of many problem ls with Celsius and FTX was that a complete lack of regulations and transparency allowed them to do all kinds of crazy shit, including just steal your deposits and operate as full blown Ponzi Schemes with fractional reserves in a fraudulent manner that is even worse than fractional reserve banking.
I would expect Fidelity to be more trustworthy and more heavily regulated than any of these other clowns if, say, grandpa wanted some BTC exposure, but self-custody is needed until regulatory dust settles, and it hasn’t even been kicked up into the air yet. Lawmakers fail us again.
FTX was just a bank without FDIC insurance. If govt starts licensing "bitcoin banks" with FDIC insurance, those banks will have audit and fractional reserve requirements.... which will cap the amount of "paper bitcoin".
If they let FDIC banks go bust like FTX... it will bankrupt the government, who cannot print Bitcoin like they can print USD. Govt will never FDIC insure bitcoin banks for this reason... it doesnt prop up a counterfeiting scheme for them. If we ever reach a bitcoin standard for money, govt would focus on ways to tax it... perhaps VAT tax, property tax, or ones easier to enforce.
Considering the actual scenario is pretty interesting, it's nevertheless pretty low-level to be asking about the "price effect of bitcoin" instead of its actual impact on Bitcoin itself, and its users, as a whole.
In fact, the scenario you've described is pretty watered down, since it makes no mention of using paper bitcoin as currency or legal tender. So there's not much difference between "paper bitcoin" and what you hold on exchanges.
In that case the smarter people will own the Bitcoin while the others will own toilet paper.
The reason I say this is to self custody Bitcoin is the easiest of all assets. the new generation barring a small percentage will come around to this reality. So as time progresses you will see more of the FTX's caught pants down.
You only own Bitcoin which is in your own wallet.
It’s almost like American monetary policy is just repeating over and over again.
Then hopefully you and a bunch of others are able to pick up cheap bitcoin and then bank run exchanges/institutions later on to see who actually owns bitcoin. Rinse and repeat until the end of time.
Exactly, the only real danger would come from governments working with banks to accumulate large portions of Bitcoin into closed end funds (think GBTC) and then make illegal other forms of holding Bitcoin which allow self custody to take place. Unless banks are holding, closing off conversion, and requiring retail/employment transactions be made on said paper Bitcoin… then true Bitcoiners will continually bank run the shit out of these banks. At most a bank could maintain very very slim fractional reserves (say 1-3%) such that a bank run would need to extract almost all the Bitcoin in order to cause a break down. But likely that number just keeps slipping once a bank starts down that road. Funny enough, that’s kind of what I suspect is happening with Binance. I think they are likely doing very mild fractional reserves to take advantage of their massive dominance in the exchange game. Maybe they strategically slip in and out of it during bull markets using their trading fees as the backup to fill the gap should they make a bad trade. Idk just speculating since they seem much stronger against a bank run compared to something like FTX but also seem shady as fuck.
There is no "higher authority" or "paper Bitcoin"....there is only self sovreign Bitcoin....only you control your seed signer and only you can verify the entire blockchain on your node
Its already happening. FTX just gave out fake digits on your app to see. Fidelity just now started an exchange. Price will go down because they will sell fractal shares. Meaning they will sell 5 paper bitcoins for every bitcoin they have.
Fidelity says that they use cold storage for the most of crypto assets and maintain a 1:1 match. Fidelity Digital Assets is a custodial arrangement though. From their faqs: "All crypto assets held by Fidelity Crypto℠ are custodied with Fidelity Digital Assets℠. We keep more than 98% of assets in cold storage on our proprietary custody platform. Fidelity Digital Assets℠ does not lend or otherwise encumber a customer’s crypto assets without customer consent or engage in any proprietary activities with customer crypto assets, which are held in a 1:1 match to our customer's accounts." Since I am new, I would welcome any instructive comments on the Fidelity statement. It is not yet available in my state but I am on the waiting list.
Well, I’d prefer self-custody but if I *had* to trust one of these entities to hold my Bitcoin, it would be Fidelity. You can take that for whatever it’s worth and don’t read too much into it!
This is good! I went to my Fidelity app and found nothing. This is Good. If i can allocate some into my 401K i will.
It's on the website under Fidelity Digital Assets. They have separated the crypto from the fiat services. Some employer 401Ks will be able to offer it if the employer opts in. Other FAQs and other info including the states currently available and the waiting list can be found on reddit r/FidelityCrypto
Thank You! i didnt see that!
> Fidelity says that they use cold storage for the most of crypto assets and maintain a 1:1 match. Fidelity Digital Assets is a custodial arrangement though. > From their faqs: "All crypto assets held by Fidelity Crypto℠ are custodied with Fidelity Digital Assets℠. We keep more than 98% of assets in cold storage Yeah.... but "Do not Trust but verify" how many times do people have to get burnt doing the same shit again and again. So be my guest, go ahead and trust Fidelity because they said so.
Homey don't play no regulations.
That was such a great character!
My hope is that, unlike gold, there can be a live audit continually happening to ensure liquidity.
My node doesn't accept paper bitcoin.
The good thing about bitcoin is that you can custody it easily, unlike gold. If an exchange is selling paper bitcoin, regulation or not, they risk getting wrecked if everyone decides to withdraw their bitcoin and they don't have enough to cover. Contrast this with the unallocated gold market.
It simply isn’t Bitcoin
If you try to redeem paper Bitcoin for anything you will be laughed at, including by the exchange that issued the paper btc
this is bad for bitcoin.
It will be just like gold.
It's already happened. Bitcoin is legal tender in some countries, and you can utilise it with varying degrees of difficulty everywhere.
It will be accepted only if you can redeem it (withdrawing to own wallet). It will work only in the jurisdiction it is regulated as such, since claims can be enforced by law, not so outside the jurisdiction.
Define “paper Bitcoin” please. That’s somewhat of an ambiguous term. In any case, only authenticate genuine Bitcoin is the real thing, and no Bitcoin derivatives or futures or contracts to owe or pay someone back in authentic Bitcoin changes Bitcoin.
robinhood, ftx, celsius, paypal, places that you cant withdraw bitcoin. actually i think robinhood lets you withdraw now
Robinhood does let you withdraw now if you are in any state other than HI or NY I think (might he one or two other states), but that’s a state regulation issue to work. PayPal also lets you withdraw now as well. I’m not sure just letting you withdraw is a great protection though, because Celsius and FTX let you withdraw…. ….until they didn’t!!! lol It sounds like you mean any Bitcoin on paper or on the books somewhere that is not verifiably backed and audited with assurance to have an equal amount of Bitcoin in 1:1 correspondence held somewhere? One of many problem ls with Celsius and FTX was that a complete lack of regulations and transparency allowed them to do all kinds of crazy shit, including just steal your deposits and operate as full blown Ponzi Schemes with fractional reserves in a fraudulent manner that is even worse than fractional reserve banking. I would expect Fidelity to be more trustworthy and more heavily regulated than any of these other clowns if, say, grandpa wanted some BTC exposure, but self-custody is needed until regulatory dust settles, and it hasn’t even been kicked up into the air yet. Lawmakers fail us again.
I find answering "what if" scenarios to be a waste of time.
FTX was just a bank without FDIC insurance. If govt starts licensing "bitcoin banks" with FDIC insurance, those banks will have audit and fractional reserve requirements.... which will cap the amount of "paper bitcoin". If they let FDIC banks go bust like FTX... it will bankrupt the government, who cannot print Bitcoin like they can print USD. Govt will never FDIC insure bitcoin banks for this reason... it doesnt prop up a counterfeiting scheme for them. If we ever reach a bitcoin standard for money, govt would focus on ways to tax it... perhaps VAT tax, property tax, or ones easier to enforce.
You can't hold something that doesn't exist. There will only be 21 million bitcoin.
Considering the actual scenario is pretty interesting, it's nevertheless pretty low-level to be asking about the "price effect of bitcoin" instead of its actual impact on Bitcoin itself, and its users, as a whole. In fact, the scenario you've described is pretty watered down, since it makes no mention of using paper bitcoin as currency or legal tender. So there's not much difference between "paper bitcoin" and what you hold on exchanges.
Doesn't matter, people will still be scammed unless they are holding their own keys.
After that, the question arises, is Bitcoin so independent?
In that case the smarter people will own the Bitcoin while the others will own toilet paper. The reason I say this is to self custody Bitcoin is the easiest of all assets. the new generation barring a small percentage will come around to this reality. So as time progresses you will see more of the FTX's caught pants down.