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13 sats \ 0 replies \ @MaaliMKen 24 May \ on: Why MSTR's Bitcoin Are Worth More Than Yours (Money Stuff, Matt Levine) econ
"But burglers and $5 wrench attackers can't get my MSTR shares, because they're not self-custodied! They sit in a database at Depository Trust & Clearing Corporation, safely hidden away from kidnappers and thieves!
Ha-haaa, checkmate "decentralized" finance!"
Haha. Spot fudging on.
Decentralized Finance is all great, but centralized protection of valuable assets has always been superior.
As I argue in my book, we might reach a point where the US government, every government, decides to protect its Bitcoin and users Bitcoin -- via a GPS system for tracking the former and corporate systems for tracking the later.
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Why? Because Bitcoin can justify continued money printing. As it can capture increasing value ad infinitum with no fear of collapse from degeneracy of use (e.g. with real estate houses unused degenerate, with collateralized debt obligations in 2008 mortgages unpaid stack up and the thing collapses. With Bitcoin, if it doesn't move, that's OK. It's like gold, except super scarce so all the liquidity can channel into that and see 10x gains in the same time). Of course, if most of the debtors start to want repayment, then negotiating a new debt system while Bitcoin serves as global reserve money is a perfect way to release tensions. (And get some people paid back some money, while others chill).
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What is the threat to the BTC? local $5 wrench attacker and international BTC hackers (I called mine TZB) will need this level of corporate/ state interference. At the extreme end, this infact fuels a "Pro-individual Bitcoin reset" say if certain countries hold that much more BTC than civilians and suddenly it goes stolen by the criminal mastermind. So they'd (we'd) have to copy Ethereum's playbook here, using our permission of course, to rewind the chain. Because we (Bitcoiners) want to. If not, no biggie. The criminal goes on living nice and easy with their millions in stolen BTC (worth maybe trillions. Ouch. That's a lot of liquidity to leave to a criminal).
Otherwise, Bitcoin soon becomes a big political tool for UN politics and greater UN coalitions, as government capture makes it worthless hence collapsing fiat systems.
Governments have to be careful to ensure they play to keep Bitcoin decentralized (otherwise it will turn into Ethereum. Which I do not see participating in international politics 40+ years from now).
It is a very interesting technology -- Bitcoin.
Conclusion:
If the State (via corporations) captures it, it loses it. And the real Bitcoin will go back into the shadows. Tens of trillions of good dollars of value wiped which would have benefitted the State!
If the State (via corporations) protects it as is without pretending to own it for itself, it gains massively.
Especially if, via the LN, it finds a way to keep those Tens of Trillions of dollars circulating with its border.
Unstolen.
'Hodling Moving Bitcoin'.