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31 sats \ 5 replies \ @Undisciplined 12 Jan \ on: ETFs are Just a Custodial Abstraction of Bitcoin bitcoin
That's definitely true from a technical standpoint. Conceptually, though, gold notes were very similar to an L2, right? Hypothetically, there was a lump of gold somewhere that corresponded to the gold referenced in the note. Of course the unsolvable problem was issuing multiple notes on the same gold.
It's a social layer.
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I'm fine with that terminology. Just trying to get concepts and terms straightened out, too.
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What I think is that the ETF is more like a gold note. Legally the ETF manager you buy from is required to acquire btc. This is enforced by a social layer. Not a cryptographic one. Banks that issued gold notes could cheat. ETF managers could as well. Governments could take the gold in the banks. They could also take the BTC on Coinbase.
Is see the two as very similar. That is if I am understand them correctly. However this illustrates to me the wisdom of self custody.
Stay humble, stack sats
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I agree. One notable difference between gold notes and the ETF is what investors are entitled to.
If you caught someone forging gold notes, they would be required to compensate you in the amount of gold specified.
If you catch an ETF manager cheating, they would be required to compensate you in fiat (and probably less than the amount you'd need to actually buy the quantity of Bitcoin they were supposed to be holding).
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Yep. Good point.
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