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194 sats \ 4 replies \ @SimpleStacker 26 Nov \ on: Semantic Takeover Risks bitcoin
Great review.
I'd argue that the semantic takeover risk is not the biggest risk that bitcoin faces.
Why? Because even if most people end up with custodial bitcoin IOUs, the option value exists for someone to hold real bitcoin. And that option will continue on regardless of what fraction of people are using fake bitcoin IOUs.
Custodial bitcoin can affect bitcoin price patterns, but to me that's the extent of the risk. The option to hold and transact real bitcoin will still exist.
The bigger risk that I worry about for Bitcoin is that it becomes too expensive for individuals to transact on the blockchain. That would take away the option value for self custody because self custody is only economically feasible in large quantities--too large for regular people to have.
I guess it boils down to why people are choosing custodial. If it's because of convenience, I am not worried about that. The dedicated truecoiners can deal with the complexities of self custody. But if it's because of economic feasibility, then I would be much more concerned.
You dont understand how forks work.
Please watch this video and learn.
You dont understand how an Order 6102 type ban on private custody would be much more powerful and also much more practicable if most Bitcoin is already held by institutions?
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They can fork off and form their corpo-Bitcoin if they want to. Do you think they will do so? It destroys the value proposition of Bitcoin and they will destroy the value of their own holdings.
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Watch the video.
And in addition to learning how forks can work where ETFs (who do not own Bitcoin but hold it in custody on behalf of the investors who paid for the bitcoin) explicitly control how they respond to any fork, consider how a ban on private custody along the lines of Order 6102 is far more effective the more institutional custody is in place prior to such an Order being made.
It was in large part because most people held their gold via banks that Order 6102 was so successful.
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Good points.
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