It's been strange to me how quiet on-chain activity has been for the past six-ish months with so much investor fervor and the grind higher. I can't help wondering if all the transactions that might have happened on-chain are now happening elsewhere, e.g. exchanges, ETF's, bitcoin treasuries, etc.
Are these effectively layer two's? Of course they don't have the same technical properties as a "true" layer two but in practice they seem to achieve the same outcome: managing and consolidating transaction activity efficiently off the main chain.
They're just users, they actually generate on-chain activity when they acquire or liquidate... imagine how much less activity there would be without them.
So without ETFs... wouldn't there technically be more?
There'd be much, much less.
no, they are custodial wallets
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Duck typing > semantic pedantry.
I think if they were in kind redemption you could argue this.
I guess it depends how literal you want to be in describing layer two.
Exactly
ETFs are an investment product.
Exchanges are a trading platform.
Bitcoin treasuries are capitalism.
https://www.lxresearch.co/starting-to-define-layers-a-year-later/
You need to make your list of well known exchange and not focus for dummy ones.
Calling it layer 2 is not accurate, but in the sense that it takes a big load of the chain (which I think is what you posit) then I would agree.
Basically the folks who were just trading and "investing" before now have an option to do it without touching the chain even if it's potentially paper Bitcoin and they can only do it M-F from 9:30 to 4pm
They are layer 3 ¼.
Yeah, love ur post
I wrote about this some time ago and I don't think I would call them a layer 2 but rather an abstraction.
No, but yes they have a similar effect on onchain activity I'd guess.