RE: The Two Sides To Banking Handling Crypto

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In general, very good overview @chekohler, except for this one:

A total bank run, while I don't think they'll allow it, we'll have to find ways to hold ownership of our funds or risk a repeat of the situation we find ourselves in with fiat money.

Logic will not allow it: The more fiat money they offer, its value will be lower, and less people would want fiat. The best they could try would be a ‘gold trap’ to divert people from decentralized cryptocurrencies into a controlled financial system, or – much more likely – a trap of centralized (state issued) cryptocurrencies that are ‘same as bitcoin’.

No, they never could issue something same as bitcoin, or takeover bitcoin itself. It’s the nature of things. They are only masters of deception and cannot oppose the laws of nature.



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I think you're right about that, it could be a bait and switch once they've captured enough purchasing power in BTC and now hold this asset under management for people. Also, many of the banking BTC may be off-chain transactions where they can use money multipliers to "create BTC" out of thin air and just transfer it between accounts like they do now with fiat.

It's up to the BTC community to be vocal about the distinction between on-chain holdings and off-chain promises

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yes, i don't understand how all the speculative funds affect markets, like Grayscale BTC (GBTC), do they actually have any BTC? like Silver and Gold ETFs, these are just speculative/tracking products as I understand it ... the effect on prices of actual, scarce products often baffles me

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I'm as clueless as you, I'll need to do research on it, I know grayscale has been buying up BTC but I don't know how much of it is fully collateralised. I mean, it should be easy to buy 1 BTC for them peg it 2 to 1 to BTC and then effectively "print money" same like the USDT/Tether cartel

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i just parked some gains yesterday for the first time into USDC. at least i'm able to trade into that with no fee (at least none i noticed), so that's cool

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Nice and you can still earn interest in USDC with Celsius so you don’t really lose that 8-11% is a pretty sweet deal! If only this was smart contract based and not custodial based I think I’d be far more bullish on it if I always owned the keys

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they can use money multipliers to "create BTC"

Yes, you are right, in fact, they are doing it right now with that ‘bitcoin futures’ thing… This is still keeping bitcoin price so low. As long as there is enough gullible people who believe that it is possible keeping bitcoin with someone else (bank, post, state, insurance company…) those scoundrels will be ‘in business’. That is the same kind of scam when gold was exchanged for ‘paper with the guaranteed interest’. Therefore, I say that a financially smart part of the humanity will survive. The rest will serve as an ugly example.

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I only recently learned about the "paper" gold and the derivatives built on top of it, because people talk about gold as sound money but when you can build so much shit ontop of it then that sound properties are diluted.

At least with BTC the chain remains the only settlement layer

You paint an awfully grim picture but yes as its always been it will be financial Darwinism, I just hope BTC holders like myself won't rest and still try to push education and peaceful protest against this obvious gambling and Ponzi scheme.

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