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Author Topic: Shower thought. Bitcoin ETF bad?  (Read 439 times)
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September 13, 2019, 10:01:18 PM
 #61

in an ETF the company buys the bitcoins and its the companies property. they are not custodians. they are businesses with assets / collateral.
what ETF customers are buying are shares. they are not buying real bitcoins, just common stock shares

the ETF trustee still has to custody the bitcoins that form the basis for share creation, and investors can redeem blocks of shares from them for real bitcoins. that's who people are referring to.

i'm not sure why this distinction matters. when you buy "bitcoins" on an exchange, or a futures contract that supposedly settles in bitcoin, these are also essentially just IOUs that carry counterparty risk. the biggest risk with ETF investment is the same one as holding your coins on an exchange---you are trusting that account balances can be redeemed for real bitcoins.

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September 13, 2019, 11:06:25 PM
 #62

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?


Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf regulation to control crypto currency as independent digital currency and the bad result of ETF bcrto is undressed by the government their price value, but until now their nothing comfirmation about etf status approval. Meaning no need to worry all abput etf issue until the government not approve.
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September 14, 2019, 12:42:54 AM
 #63

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?


Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf regulation to control crypto currency as independent digital currency and the bad result of ETF bcrto is undressed by the government their price value, but until now their nothing comfirmation about etf status approval. Meaning no need to worry all abput etf issue until the government not approve.

It's better we are not skeptical beforehand with the existence of the Bitcoin ETF. Maybe ETFs can be a good start for Bitcoin or cryptocurrency in terms of regulation and price. With ETF many investment companies might be interested in the cryptocurrency market and this could make the cryptocurrency market excited again

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September 14, 2019, 02:38:35 AM
 #64

Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf

no they are not . if im not mistaken , people are excited for the etf because they assume that the value of btc will greatly increase if its approve .

 the etf rumor is hot last year and there are updates about its on and off approvals but now , i dont see any news regarding on etf but one thing i can say , btc is still looking good without etf and btc can still grow without etf but with only the help of btc investors.  .

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September 14, 2019, 02:40:23 AM
 #65

The freedom to do what one wants with one's bitcoins necessarily includes the freedom to give custody of them to a third party. Some (such as those who are unwilling or unable to safely manage their own private keys) will find such an arrangement beneficial. And some will not benefit from such an arrangement, and choose not to use it. That's what freedom means.

Well said. In my country, most of the locals here use a third wallet app in order to do business (Which is coins.ph). It isn't necessary mean we lost are freedom because we chose to do it on your own free will. ETF is not a bad thing, in fact it is beneficial to the world to reduce the adoption process of the people. It's just that it is taking too long to be accepted until now.

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September 14, 2019, 02:54:22 AM
 #66

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?


Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf regulation to control crypto currency as independent digital currency and the bad result of ETF bcrto is undressed by the government their price value, but until now their nothing comfirmation about etf status approval. Meaning no need to worry all abput etf issue until the government not approve.

I think only a few people who can understand what ETF regulations are and many of them don't know including me. I don't know to details about ETF, and I don't overthink about that. I think the government still find a way about how to control the cryptocurrency so they can take some benefits from the crypto. So far, ETF has been a delay, and that is what I heard, I don't know if in the future, ETF regulations will be approved or not and I let them and see what will happen later.

But if ETF is approved, I think that will be a good sign for bitcoin to be approved in many aspects as that will be a new way for people to know about bitcoin and they will try to use bitcoin as other people did.

 
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September 14, 2019, 03:40:24 AM
Last edit: September 14, 2019, 09:51:12 AM by franky1
 #67

a few people above seem noobish about ETF regulation in regards to bitcoin.
here is a big hint. ETF regulation does not touch bitcoin.(though other regulations might)

lts put it another way,
commodities such as the fruit orange, no financial regulation has control to stop a farmer growing oranges. picking oranges or selling oranges.
if a company (international distributors) buys up containers full of oranges and form them into commodities. then thats between the company and the financial regulations.. not the farmer.
the financial regulators make sure the company is buying what it said its buying to then allow the company to legitimately offer options for customers to buy/trade commodities(not th actual oranges, as thats separate)

farmers are not worried about the sec, farmers only have to worry about pesticides and what not

so those mining and buying real bitcoin and not interested in ETF wont see any hurdles in regards to ETF regulation.
those trading or buying ETF shares wont own/touch the bitcoins of the companies etf

...
separate point. someone believes bakkt is a etf.. its not. an etf is assets owned by a company in their own right and those coins have to be held.
what people seem to get confused with is the same company offering a completely different service which is when a ETF contract expires. instead of the company handing out fiat back to the customer the company on behalf of the customer transfers the fiat to an exchange and buys btc separetly to then give to the customer.

btc does not jump in and out of the ETF at the whim of customers..
again the customer if a etf offers withdrawal of btc, its not using the ETF stash, but a side service that buys btc for that customer from an exchange using the customers funds

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September 16, 2019, 06:10:21 AM
 #68

I can understand that institutional investors would want to avoid having the hassle of dealing with the safekeeping of coins and wallets and such, so they would pay a third party to do it on their behalf. The risk is much lower for them to invest in Bitcoin then and it is backed by actual bitcoins.  Wink

Then the actual point. "Is allowing the custody of Bitcoin to institutional third parties, without thinking of the consequences, good or bad?"

we're in no position to allow or disallow it, so it's a moot point. wall street wants it, and it's up to the SEC. and once they allow ETFs it's also not our business if people/institutions want to trust third parties. it's just like today with so many people using exchanges as wallets. it makes me shake my head, but what am i supposed to do about it?


Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"



Well there's certainly a great deal of room for personal opinion on that one, heh.

If it did happen (and I find it pretty unlikely), I'd say it depends on how much trust it would require from those of us not utilising their services.  If they started leveraging their influence and pushing for protocol changes, I probably would consider it a failure.


How much from the total amount of the Bitcoins mined so far are moving around within the Bitcoin economy, and how much are stored in wallets and never moving, and how much of those "never moving Bitcoins" are held by third party custodians.

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September 16, 2019, 10:18:23 AM
 #69

Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"

Well there's certainly a great deal of room for personal opinion on that one, heh.

If it did happen (and I find it pretty unlikely), I'd say it depends on how much trust it would require from those of us not utilising their services.  If they started leveraging their influence and pushing for protocol changes, I probably would consider it a failure.


How much from the total amount of the Bitcoins mined so far are moving around within the Bitcoin economy, and how much are stored in wallets and never moving, and how much of those "never moving Bitcoins" are held by third party custodians.

It'll take a keener mind than mine to figure that out.  It's tricky enough keeping track of the "lost" bitcoins where people assume access to the private key has been lost, but it's still largely guesswork, as it may just be long-term HODLing.  I have coins that haven't moved in 5+ years, so do some people assume those coins are lost because they haven't moved in a while.  But I would assume that because some early adopters have vast tranches of BTC and are more likely to be of the "hold your own keys" mindset, there should still be a sizeable sum in the hands of individuals.

Plus, it's pretty well established that these third party custodians are shit at security and seldom manage to retain custody of their clients' BTC, meaning it usually ends up back in the hands of individuals anyway.   Cheesy

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September 16, 2019, 10:52:50 AM
 #70

Then, I bring forth the question, "Can Bitcoin be considered a "failure", if the majority of all coins were held by third-party custodians?"

Well there's certainly a great deal of room for personal opinion on that one, heh.

If it did happen (and I find it pretty unlikely), I'd say it depends on how much trust it would require from those of us not utilising their services.  If they started leveraging their influence and pushing for protocol changes, I probably would consider it a failure.


How much from the total amount of the Bitcoins mined so far are moving around within the Bitcoin economy, and how much are stored in wallets and never moving, and how much of those "never moving Bitcoins" are held by third party custodians.

It'll take a keener mind than mine to figure that out.  It's tricky enough keeping track of the "lost" bitcoins where people assume access to the private key has been lost, but it's still largely guesswork, as it may just be long-term HODLing.  I have coins that haven't moved in 5+ years, so do some people assume those coins are lost because they haven't moved in a while.  But I would assume that because some early adopters have vast tranches of BTC and are more likely to be of the "hold your own keys" mindset, there should still be a sizeable sum in the hands of individuals.

Plus, it's pretty well established that these third party custodians are shit at security and seldom manage to retain custody of their clients' BTC, meaning it usually ends up back in the hands of individuals anyway.   Cheesy


But you understand my viewpoint, I hope. The "custodians" could cartelize, and could censor the transactions they don't want, or maybe censor some transactions labeled "illegal" by the government.

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September 16, 2019, 12:09:33 PM
 #71

How much from the total amount of the Bitcoins mined so far are moving around within the Bitcoin economy, and how much are stored in wallets and never moving, and how much of those "never moving Bitcoins" are held by third party custodians.

It'll take a keener mind than mine to figure that out.  It's tricky enough keeping track of the "lost" bitcoins where people assume access to the private key has been lost, but it's still largely guesswork, as it may just be long-term HODLing.  I have coins that haven't moved in 5+ years, so do some people assume those coins are lost because they haven't moved in a while.  But I would assume that because some early adopters have vast tranches of BTC and are more likely to be of the "hold your own keys" mindset, there should still be a sizeable sum in the hands of individuals.

Plus, it's pretty well established that these third party custodians are shit at security and seldom manage to retain custody of their clients' BTC, meaning it usually ends up back in the hands of individuals anyway.   Cheesy


But you understand my viewpoint, I hope. The "custodians" could cartelize, and could censor the transactions they don't want, or maybe censor some transactions labeled "illegal" by the government.

I don't think I did initially, but I'm there now.  You're approaching it from the hypothetical scenario that a majority of Bitcoin users would be reliant on these companies and would then be restricted in their usage, correct?

From the perspective of someone who definitely wouldn't be reliant on those custodians, I'd feel a bit sorry for those "users" (technically, not really Bitcoin users), but that in and of itself wouldn't constitute a failure of Bitcoin (in my view anyway), as it's simply what those people opted to sign up for.  No responsibility and no control.  If that's what some people want, it's up to them.  If, however, it begins to impact those of us who aren't using those services, that I would perceive as a failure. 

If, for example, such a cartel claimed they had an economic majority and somehow managed to pressure developers into going down a certain developmental path or otherwise interfered with network governance, that's where I'd draw the line.  Provided the users who hold their own private keys are still free to transact in the way they want to, it's not a failure.

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September 17, 2019, 07:02:22 AM
 #72

A very hypothetical scenario, yes, and I believe something that we should think about and debate/discuss about how Bitcoin could "fail". Because if the custodians could censor transactions, then Bitcoin, as what it's supposed to be as a censorship-resistant cryptocurrency, has therefore failed in my opinion.

A cartel of ETF issuers might be one of the paths to its failure.

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September 17, 2019, 09:15:50 PM
Last edit: September 17, 2019, 09:47:02 PM by DooMAD
 #73

A very hypothetical scenario, yes, and I believe something that we should think about and debate/discuss about how Bitcoin could "fail". Because if the custodians could censor transactions, then Bitcoin, as what it's supposed to be as a censorship-resistant cryptocurrency, has therefore failed in my opinion.

A cartel of ETF issuers might be one of the paths to its failure.

ETFs won't be censoring any transactions, though, because the investors won't have any access to the BTC to send it anywhere.  The sole purpose of an ETF is to hold some bitcoins in reserve and not move them.  People then place fiat bets on the price, never interacting directly with the bitcoins.

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September 17, 2019, 11:46:19 PM
 #74

Shouldn't the communty discourage the creation of anything that gives up the custody of Bitcoin to third parties?

Although it might be good for its price, would it be good for Bitcoin as a censorship-resistant hard money?


Depends on how people understand well about ETF regulations, because a lot of the cyrpto holders since from the beginning of the proposal if  iam not wrong is against into ETf regulation to control crypto currency as independent digital currency and the bad result of ETF bcrto is undressed by the government their price value, but until now their nothing comfirmation about etf status approval. Meaning no need to worry all abput etf issue until the government not approve.

It's better we are not skeptical beforehand with the existence of the Bitcoin ETF. Maybe ETFs can be a good start for Bitcoin or cryptocurrency in terms of regulation and price. With ETF many investment companies might be interested in the cryptocurrency market and this could make the cryptocurrency market excited again
I don't see that people will consider this as a good start for Bitcoin most especially if the intention is to regulate its market price and being controlled by a group of people. Not actually wanted to be like but they want to remain its high volatility cause it gives us more profit than of having a stable price.
We could say that we are excited to see the effect of this in the market but I don't know if those results are highly acceptable to the community or just having regrets.




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