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Coin Center executive director Jerry Brito: > The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to b

Coin Center executive director Jerry Brito: > The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation. But this creates a chicken and egg problem. How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin? Source: https://coincenter.org/link/coin-etf-statement https://coincenter.org/link/coin-etf-statement

dragonwriter 10y ago
The SEC's job (relevant to the issue at hand) is not to make it easy to drive demand in the US on the hopes that that might create conditions for mature markets in $COMMODITY, it is to assure that exchanges listing derivatives of $COMMODITY have adequate rules in place to protect against manipulation, including manipulation of the derivative through manipulation of the underlying commodity. If the key driver for domestic demand for the commodity is readable derivatives such that one needs to create such in order to drive demand, then, well, too bad. If there is sufficient inherent utility in the underlying commodity, you won't need to violate normal exchange criteria to create derivative markets to stimulate demand for the commodity, the commodity will drive itself, and create the conditions where it won't be unduly onerous to create derivatives markets that meet the normal criteria.
- elastic_church 10y ago
  Yeah, you willingly ignored all the incumbents sitting on the sidelines that rely on validation from the regulators.
- blusterXY 10y ago
  How did oil ETF pass with OPEC in existence? Did they just stop doing their job that day?
jbmorgado 10y ago
It's easy. If your product practical application was actually more important than it's speculation aspect then price manipulation would be greatly reduced. As bitcoin exists right now that's not the case of course. Bitcoin is now a mostly speculative asset since the amount of transactions you can do is extremely small compared to the market value of bitcoin at the moment.
- jlrubin 10y ago
  This is somewhat false. It is true that Bitcoin can currently support about 7 txps. However, this isn't the whole picture. 1) A much better number to use is 4,500/10 minutes, because if the transactions aren't used in a prior second, they can still be used in the next. 2) One-way ratcheting timelocked channels (these payment channels work kind of like a giftcard) are ridiculously easy to implement -- basically just use this scriptPubKey: ``` OP_IF <Bob's public key> OP_CHECKSIGVERIFY OP_ELSE <now+8 days> OP_CHECKLOCKTIMEVERIFY OP_DROP OP_ENDIF <Alice's public key> OP_CHECKSIG ```(from https://21.co/learn/intro-to-micropayment-channels/ https://21.co/learn/intro-to-micropayment-channels/) These only require two transactions total to send many transactions from Alice to Bob. Even as technologies like Lighting Network are further developed, which make these channels full duplex, institutions looking to get high volume trustless transactions through should have very little challenge adopting simpler channels now. 3) The number of transactions is completely separate from the amounts that can be transacted. Large value transactions move through bitcoin as easily as small, so even if the number of transactions were bottle-necked, this is still very useful for settling larger amounts with finality.
  - matt4077 10y ago
    I understood "amount of transactions" as a reference to acceptance by, for example, vendors – not the technical limits.

dragonwriter 10y ago

The SEC's job (relevant to the issue at hand) is not to make it easy to drive demand in the US on the hopes that that might create conditions for mature markets in $COMMODITY, it is to assure that exchanges listing derivatives of $COMMODITY have adequate rules in place to protect against manipulation, including manipulation of the derivative through manipulation of the underlying commodity. If the key driver for domestic demand for the commodity is readable derivatives such that one needs to create such in order to drive demand, then, well, too bad. If there is sufficient inherent utility in the underlying commodity, you won't need to violate normal exchange criteria to create derivative markets to stimulate demand for the commodity, the commodity will drive itself, and create the conditions where it won't be unduly onerous to create derivatives markets that meet the normal criteria.

elastic_church 10y ago
Yeah, you willingly ignored all the incumbents sitting on the sidelines that rely on validation from the regulators.
blusterXY 10y ago
How did oil ETF pass with OPEC in existence? Did they just stop doing their job that day?

jbmorgado 10y ago

It's easy. If your product practical application was actually more important than it's speculation aspect then price manipulation would be greatly reduced. As bitcoin exists right now that's not the case of course. Bitcoin is now a mostly speculative asset since the amount of transactions you can do is extremely small compared to the market value of bitcoin at the moment.

jlrubin 10y ago
This is somewhat false. It is true that Bitcoin can currently support about 7 txps. However, this isn't the whole picture. 1) A much better number to use is 4,500/10 minutes, because if the transactions aren't used in a prior second, they can still be used in the next. 2) One-way ratcheting timelocked channels (these payment channels work kind of like a giftcard) are ridiculously easy to implement -- basically just use this scriptPubKey: ``` OP_IF <Bob's public key> OP_CHECKSIGVERIFY OP_ELSE <now+8 days> OP_CHECKLOCKTIMEVERIFY OP_DROP OP_ENDIF <Alice's public key> OP_CHECKSIG ```(from https://21.co/learn/intro-to-micropayment-channels/ https://21.co/learn/intro-to-micropayment-channels/) These only require two transactions total to send many transactions from Alice to Bob. Even as technologies like Lighting Network are further developed, which make these channels full duplex, institutions looking to get high volume trustless transactions through should have very little challenge adopting simpler channels now. 3) The number of transactions is completely separate from the amounts that can be transacted. Large value transactions move through bitcoin as easily as small, so even if the number of transactions were bottle-necked, this is still very useful for settling larger amounts with finality.
- matt4077 10y ago
  I understood "amount of transactions" as a reference to acceptance by, for example, vendors – not the technical limits.