ETFs are just a custodial layer 2 \ stacker news ~bitcoin

8609 sats \ 53 comments \ @kepford 11 Jan bitcoin

I'm not the first to say this but I don't believe it had occurred to me before yesterday. Late in the day I saw someone make this point on Twitter as well. Saylor has probably said it too.

What do you think? Just another way to think about this new thing.

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344 sats \ 4 replies \ @blocktock 11 Jan

ETFs are just... Easier means of confiscation. Nothing more.

They will encourage everyone to use them as a superior investment. They will inflate Bitcoin's price to drive people to these crappy-crash products. They will scare everyone into thinking self-custody is for criminals. However when this debt ponzi rolls over, and it will... they will rug-pull everyone so hard. Every ETF, every stock, every house with mortgage debt will be owned by the State. If you ever get "paid out", it will be in ever more shitty CBDC currency, with conditions attached to it.

It's all written in these SN posts of The Great Taking:

10 sats \ 2 replies \ @guts 12 Jan

So not even Bitcoin would save us from this.

26 sats \ 0 replies \ @okpj 12 Jan

Why not? Bitcoin isn’t debt based and isn’t a product of their system.

0 sats \ 0 replies \ @030a29f333 12 Jan

bitcoin held non-custodially saves you from this

0 sats \ 0 replies \ @kepford OP 11 Jan

No question in my mind that is possible.

316 sats \ 11 replies \ @Lux 11 Jan

ETFs are investment vessels, not payment networks. Permissioned, closed source, fictional registered dead entities under sea jurisdiction. Centralization of ownership and power. Confiscatable.

Is the gov going to confiscate a 100k sats on open source pseudonimous Blink or the nations pension and hedge funds?

52 sats \ 10 replies \ @kepford OP 11 Jan

Not a pitch for ETFs my friend. This is one of if not the worst ways to interact with bitcoin for all of the reasons you mention.

It is however, a different layer. Not a payments layer, that is a very valid point. Thank you for your thoughts!

31 sats \ 9 replies \ @Lux 11 Jan

Bitcoin is cash ETF is deception

21 sats \ 8 replies \ @kepford OP 11 Jan

Not arguing that you are wrong but what about gold ETFs or any of them? They are all claims on something. Not the actual thing in my view. This is true of bitcoin on Coinbase/Strike/Cash as well of course. Not your keys not your coin. Who knows what kinda of shenanigans go on with gold ETFs. That said, I'm not aware of any rug pulls.

I'm not sure I'd say ETFs are deceptions in general as much as they are trusted third parties exposed to US gov rug pulling as well as custodian incompetence. But that's not as catchy as "ETF is deception".

ETF is fiat. Fiat is deception.

0 sats \ 7 replies \ @Lux 11 Jan

Gold was confiscated because it was easy to do. The 6102 order mentions only persons, not living sovereign man or woman.

21 sats \ 6 replies \ @kepford OP 11 Jan

Well aware. What is your point? That the state could confiscate this paper bitcoin? Of course they could. They could do this to Coinbase as well.

0 sats \ 5 replies \ @Lux 11 Jan

The point is that neither exchanges are layer 2's. Recently Liquid and Tether are called layer 2, it just rubs me the wrong way, because it's not true.

0 sats \ 4 replies \ @kepford OP 11 Jan

In your opinion what is a layer?

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729 sats \ 5 replies \ @kr 11 Jan

I like Ryan Gentry’s framing for what is a L2 on Bitcoin

It’s only a L2 if:

you can unilaterally withdraw your BTC back to a main chain address you control
the tx occurring within the L2 are valid main chain txs

https://twitter.com/RyanTheGentry/status/1745450046316019865

468 sats \ 3 replies \ @kepford OP 11 Jan

Yeah, that makes sense. I think @Lux and you have changed my mind. Its semantics but I like semantics. Semantics are a part of what makes language and language helps us understand the world.

Thanks for your contribution.

131 sats \ 2 replies \ @elvismercury 12 Jan

It's fine to change your mind, but you were getting at something interesting.

Whether we call it an L2 or not, there's a sense in which this asset can move around in a way that's off the blockchain, which is L2-proximate in an interesting way, the same way that opendime is kind of an L2. (I had used a tilde but looks like SN stole that for territories. Someone should make ~L2, that would be an interesting territory for sure.)

There's going to be a shit-ton of these quasi-L2s before all is said and done, and if there's not, it will be bc btc is irrelevant and nobody cares about it anymore. Otherwise, forming these abstractions, with different benefits and tradeoffs, is the most human thing in the world.

10 sats \ 0 replies \ @030a29f333 12 Jan

"Custodial Opendime" is a pretty good description honestly

21 sats \ 0 replies \ @kepford OP 12 Jan

Yeah, I think it is semantics around what I would call the ETF. I haven't changed my mind on the ETF itself. It sounds like we agree on the ETF. Things like this are just gonna happen as BTC becomes more desired.

What I'm changing my mind on is my terminology. Language is subjective. Misunderstanding is often created by people ignoring this fact. If you want to communicate and understand others effectively you have to define terms and understand what someone else means by the words they use. Often people think they disagree when they do not and the inverse.

I need to think about this more. I may write my thoughts on this tomorrow. We will see.

0 sats \ 0 replies \ @SpaceHodler 12 Jan

Does LN even meet 2.? Sending sats over a channel is not a main chain tx, the only main chain txs are channel openings and closures.

110 sats \ 1 reply \ @TheBTCManual 12 Jan

I guess it serves the function of an L2/sidechain by taking transactions off-chain, but its like an L3 because the custodian like Coinbase or gemini the first layer, they're just creating another secondary market, pointing to bitcoin, if anything an ETF is like a BRC-20 token, sure theres some Bitcoin on-chain representing it, but theres several 3rd party indexers in between doing the management

I like to think of it as a social layer, to me an uncle jim node is a social layer, you agree with a 3rd party and you have a contract and would need to go the legal route for disputes since don't have ties to the chain in some way to settle the dispute

0 sats \ 0 replies \ @kepford OP 12 Jan

Good take. My thinking is evolving and your comment aligns.

41 sats \ 0 replies \ @bleetube 12 Jan

An L2 that you can't buy a coffee with?

Nah.

52 sats \ 1 reply \ @nerd2ninja 11 Jan

Custodians are a layer 2. They were gold's layer 2. That layer 2 method had and has a critical flaw though and that flaw is the exactly the problem we're trying to solve with Bitcoin.

0 sats \ 0 replies \ @kepford OP 11 Jan

100% agree. The ETF is bolting on the Fiat flaws to the superior technology.

48 sats \ 2 replies \ @cyberpunk02 11 Jan

Liquid is better

30 sats \ 1 reply \ @kepford OP 11 Jan

Its funny how stackers feel to need to state value judgements when I'm talking about classification.

0 sats \ 0 replies \ @cyberpunk02 14 Jan

yeah sorry random experiments to search for what could be value here. At the time seemed a worth while opinion

42 sats \ 1 reply \ @cyberpunk02 11 Jan

also Fedimints are better

55 sats \ 0 replies \ @kepford OP 11 Jan

For sure. Lightning is better.

20 sats \ 0 replies \ @EagleSats 11 Jan

They are another way for people to interact with Bitcoin, so they are a net good.

21 sats \ 0 replies \ @0xbitcoiner 11 Jan

For me, it's layer +infinite

34 sats \ 1 reply \ @kepford OP 11 Jan

What I am not saying

They are good
They are better than anything else
They are safe
They are good for bitcoin
They are bad
Your bitcoin will be safe
The state can't take your bitcoin
That you own your bitcoin

Ya'll are funny.

0 sats \ 0 replies \ @cyberpunk02 14 Jan

it was about the subject, not what you wrote, 😂😇 some dumdum obvious comments are ok i think.

1 sat \ 0 replies \ @TomK 12 Jan

I banned the word ''ETF' at home. NPC bs

1 sat \ 0 replies \ @nikotsla 12 Jan

Paper BTC

0 sats \ 0 replies \ @TNStacker 13 Jan

0 sats \ 0 replies \ @Jon_Hodl 12 Jan

I think as long as we can continue to stack sats and withdraw to our own wallets, then we have nothing to worry about and those who use ETF will just get rugged.

We just need to focus on Bitcoin's core principles of P2P trade and self custody and we will eventually take over the global economy.

0 sats \ 0 replies \ @Martin 12 Jan

We can probably use them as some form of money market fund so instead of placing your money in cash investments, you can put it in bitcoin etf for the capital appreciation and liquidity as well as easy access to funds. Thoughts?

0 sats \ 0 replies \ @riberet19 12 Jan

They are just another way to access Bitcoin, but in this case without buying real Bitcoin, I wonder, why would people want to buy a fictitious Bitcoin-based product instead of buying real Bitcoin? I don't get it.

0 sats \ 0 replies \ @Line2Wire 12 Jan

Not even that. There is no actual Bitcoin. It's an IOU, a representation of FICTIONAL Bitcoin. Bitocin is only bitcoin when you work with sats and you can freely transact on the timechain that secures and verifies said sats.

Also, do all ETF providers disclose their holdings? If not, might not be long until we get fractional reserve on that.

0 sats \ 0 replies \ @0xIlmari 12 Jan

You can't pay for things with them, so... no.

0 sats \ 0 replies \ @kilianbuhn 12 Jan

No they're not 💀💀

You can't make payments ore use them, they're not an L2.

0 sats \ 0 replies \ @StoneCodlHodl 12 Jan

Way worse. A layer 2 is supposed to be verifiable, no trust necessary.

There is no way to verify an ETF truly holds the underlying asset. It's a huge trust us, bro scenario

0 sats \ 4 replies \ @GregAsks 12 Jan

ETF is worse than shitcoin.

0 sats \ 3 replies \ @kepford OP 12 Jan

What is your rationale there?

10 sats \ 2 replies \ @GregAsks 13 Jan

You cannot sell ETF without asking real owner of BTC. You cannot send this ETF to other person (as i know). Your are monitored 24h, zero privacy. With some kind protest they will teach you very fast who is the real owner of your ETF. Only casino wins with fees.

For me shitcoin is better then ETF.

0 sats \ 1 reply \ @kepford OP 13 Jan

Thanks for sharing. I think these are apples and oranges. Shitcoins are worthless IMO so there's that. A more valid comparison would between a gold ETF and a Bitcoin one. Or a BTC ETF and a stock or mutual fund.

0 sats \ 0 replies \ @GregAsks 13 Jan

Gold are different, you need to storing metal, Its not easy to sell, big spread, you can easy buy fake. Thats why ETF is a good choice with gold. Shitcoin don't have that problems. Obviously bitcoin with self hosting are the best choice.

Thats why IMO:

Bitcoin (self hosting)
Shitcoin
ETF

0 sats \ 0 replies \ @teatwo 12 Jan

"custodial layer 2" is really a invention of term. lol Does it include CEXs, and Ethereum which issues wBTC custodied by BitGo?

I think this is a pyramid, not a layer. Imagine a manufacturing industry like cars, machinery, etc. Don't you think that ETF is a component made using bitcoin as raw material?

Saylor's layer theory is closer to processing and manufacturing up to the point where the product is delivered to the consumer.