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.
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:
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10 sats \ 2 replies \ @guts 12 Jan
So not even Bitcoin would save us from this.
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Why not? Bitcoin isn’t debt based and isn’t a product of their system.
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bitcoin held non-custodially saves you from this
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No question in my mind that is possible.
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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?
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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!
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31 sats \ 9 replies \ @Lux 11 Jan
Bitcoin is cash ETF is deception
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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.
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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.
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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.
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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.
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:
  1. you can unilaterally withdraw your BTC back to a main chain address you control
  2. the tx occurring within the L2 are valid main chain txs
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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.
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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.
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"Custodial Opendime" is a pretty good description honestly
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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.
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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.
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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
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Good take. My thinking is evolving and your comment aligns.
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An L2 that you can't buy a coffee with?
Nah.
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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.
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100% agree. The ETF is bolting on the Fiat flaws to the superior technology.
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Liquid is better
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Its funny how stackers feel to need to state value judgements when I'm talking about classification.
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yeah sorry random experiments to search for what could be value here. At the time seemed a worth while opinion
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also Fedimints are better
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For sure. Lightning is better.
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They are another way for people to interact with Bitcoin, so they are a net good.
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For me, it's layer +infinite
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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.
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it was about the subject, not what you wrote, 😂😇 some dumdum obvious comments are ok i think.
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I banned the word ''ETF' at home. NPC bs
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Paper BTC
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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.
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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?
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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.
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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.
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You can't pay for things with them, so... no.
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No they're not 💀💀
You can't make payments ore use them, they're not an L2.
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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
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ETF is worse than shitcoin.
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What is your rationale there?
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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.
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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.
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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:
  1. Bitcoin (self hosting)
  2. Shitcoin
  3. ETF
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"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.
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