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The entire point of crypto is there's no need to trust institutions. The only person you need to trust is your counterparty. Any "service" that goes against th

The entire point of crypto is there's no need to trust institutions. The only person you need to trust is your counterparty. Any "service" that goes against this is basically normal money except way worse. That doesn't mean crypto is broken or useless. It just means scammers gonna scam. Nice example: Bitcoin ETFs completely miss this point. Is a Bitcoin ETF actually backed by real Bitcoin? Nobody really knows, but judging by Wallstreet's track record and who's behind it (Blackrock and Coinbase) the answer is almost certainly: no, your ETF order is not hitting a lit exchange and no it's not backed by anything and no, the SEC doesn't care.

NoboruWataya 2y ago
Bitcoin ETFs are not trying to replace money or leverage the benefits of bitcoin themselves, they are just providing a way for investors to speculate on interest in bitcoin. Same way that you would not buy an auto industry focused ETF and expect to be able to get into it and drive off.
- ryandrake 2y ago
  Gold ETFs[1] are backed by physical bars of gold sitting in a vault somewhere. I would expect a "bitcoin ETF" to be backed by actual bitcoins on the blockchain, proportional to the investor's stake. 1: https://etfdb.com/themes/physically-backed-gold-etfs/ https://etfdb.com/themes/physically-backed-gold-etfs/
  - bboygravity 2y ago
    "ETFs are backed by actual real underlying" is quite a statement for anybody who understands how Wallstreet actually works. Literally every US financial crisis can be summarized as "it turned out not to be backed by anything". More info: https://www.amazon.com/Decade-Armageddon-New-Geography-Essays/dp/1910151580 https://www.amazon.com/Decade-Armageddon-New-Geography-Essay... VW squeeze: short positions that cannot be closed, because more stocks where sold than where supposed to exist. Same thing for Gamestop (except worse, 220% shorted at some point). 2008 crash: packages of high quality mortgages / credit that turned out to be backed by 0 high quality mortgages. FTX scandal: sold tons of "Bitcoin" that turned out to never have existed + traded "tokenized stocks, backed 1-by-1 with real stock by some shady broker in Germany" that turned out to be a complete lie.
cyanydeez 2y ago
By trust, whats actually being proffered is identity. In the real world trust is something thats tied to people, then to organizations, etc. Online, to trust is more than just security
- oersted 2y ago
  Indeed, trust is about knowing that a counterparty has a strong incentive to act with goodwill. For important things, the incentive is that they will be punished by the justice system if they don't act with goodwill. Without a real-world identity and a reasonable guarantee of enforcement, it's a lot harder to establish any kind of serious trust, possibly fundamentally impossible.
vishnugupta 2y ago
> The only person you need to trust is your counterparty. ...and all the miners, the backing infrastructure, internet and so on.
- kybernetikos 2y ago
  Not really. None of those people can steal your cryptocurrency. The level of trust you have to have in them is very low.
  - vishnugupta 2y ago
    It's not about stealing crypto. If I'm selling 1KG gold in exchange for crypto I need to trust the mining infrastructure that authorised the transaction.
    - deleted 2y ago
      [deleted]
  - oersted 2y ago
    Well, you do need to trust that the crypto system is working as advertised. Crypto is not immune to bugs. Precisely why untrustworthy auditing, like certik, is a big problem.
SXX 2y ago
> Is a Bitcoin ETF actually backed by real Bitcoin? At least for BITW ETF addresses are disclosed and you can verify it yourself. For others there is actually on-chain intellegence that let's approximate how they moving BTC itself. I mean there is always a lag between fund adjustments, but you can pretty much verify that BlackRock actually hold a lot of BTC. https://platform.arkhamintelligence.com/explorer/entity/blackrock https://platform.arkhamintelligence.com/explorer/entity/blac...

NoboruWataya 2y ago

Bitcoin ETFs are not trying to replace money or leverage the benefits of bitcoin themselves, they are just providing a way for investors to speculate on interest in bitcoin. Same way that you would not buy an auto industry focused ETF and expect to be able to get into it and drive off.

ryandrake 2y ago
Gold ETFs[1] are backed by physical bars of gold sitting in a vault somewhere. I would expect a "bitcoin ETF" to be backed by actual bitcoins on the blockchain, proportional to the investor's stake. 1: https://etfdb.com/themes/physically-backed-gold-etfs/ https://etfdb.com/themes/physically-backed-gold-etfs/
- bboygravity 2y ago
  "ETFs are backed by actual real underlying" is quite a statement for anybody who understands how Wallstreet actually works. Literally every US financial crisis can be summarized as "it turned out not to be backed by anything". More info: https://www.amazon.com/Decade-Armageddon-New-Geography-Essays/dp/1910151580 https://www.amazon.com/Decade-Armageddon-New-Geography-Essay... VW squeeze: short positions that cannot be closed, because more stocks where sold than where supposed to exist. Same thing for Gamestop (except worse, 220% shorted at some point). 2008 crash: packages of high quality mortgages / credit that turned out to be backed by 0 high quality mortgages. FTX scandal: sold tons of "Bitcoin" that turned out to never have existed + traded "tokenized stocks, backed 1-by-1 with real stock by some shady broker in Germany" that turned out to be a complete lie.

cyanydeez 2y ago

By trust, whats actually being proffered is identity. In the real world trust is something thats tied to people, then to organizations, etc. Online, to trust is more than just security

oersted 2y ago
Indeed, trust is about knowing that a counterparty has a strong incentive to act with goodwill. For important things, the incentive is that they will be punished by the justice system if they don't act with goodwill. Without a real-world identity and a reasonable guarantee of enforcement, it's a lot harder to establish any kind of serious trust, possibly fundamentally impossible.

vishnugupta 2y ago

> The only person you need to trust is your counterparty. ...and all the miners, the backing infrastructure, internet and so on.

kybernetikos 2y ago
Not really. None of those people can steal your cryptocurrency. The level of trust you have to have in them is very low.
- vishnugupta 2y ago
  It's not about stealing crypto. If I'm selling 1KG gold in exchange for crypto I need to trust the mining infrastructure that authorised the transaction.
  - deleted 2y ago
    [deleted]
- oersted 2y ago
  Well, you do need to trust that the crypto system is working as advertised. Crypto is not immune to bugs. Precisely why untrustworthy auditing, like certik, is a big problem.

SXX 2y ago

> Is a Bitcoin ETF actually backed by real Bitcoin? At least for BITW ETF addresses are disclosed and you can verify it yourself. For others there is actually on-chain intellegence that let's approximate how they moving BTC itself. I mean there is always a lag between fund adjustments, but you can pretty much verify that BlackRock actually hold a lot of BTC. https://platform.arkhamintelligence.com/explorer/entity/blackrock https://platform.arkhamintelligence.com/explorer/entity/blac...