Short definition:
Fiat as L2 means an entity (e.g. Coinbase or the US treasury department) securitizes Bitcoin into publicly or privately traded securities. Bitcoin transactions on this "Layer 2" happen via this centralized authority. You could argue this doesn't even count as a transaction happening.
This concept exists in multiple tiers.
- It could only happen for nation states and enterprise scales. Like Walmart paying its suppliers or the Saudi-China oil trade. It could happen at the smallest of scales like El Salvadors Chivo wallet.
- It could be fully backed or fractional reserves
I'm sure most people here are familiar with the topic.
With the US having a Bitcoin reserve now. What do you think of the scenario now? For me personally this event made me pretty sure on this topic. If Lightning payment terminals at all bars and nightclubs were common worldwide before nation state adoption I could have seen a realistic path to Lightning dominance. But now, if the US government makes deals with this reserve I see no other option than IOUs against it. Even Microstrategy chose this path with their half a million Bitcoin
Mmmmm.... i'd say it's definitely not happening right now.
It could happen. I don't have much of an opinion as to whether that would be good or bad. Like Hal Finney, I believe that bitcoin will become some kind of base layer and there will be off-chain notes traded on top of that.
Can you realistically distinguish it not happening right now or the super early steps in that direction? With the US strategic reserve and the Trump admin thinking of using US land and gold... it feels like the very early steps to me
I'd reject the labeling of that of L2, its not a L2... Lighting is the only real L2. Bitcoin treasury notes are at best an application.
That said, its perfectly fine as long as people have the ability to opt-out and retain the ability to opt-in to Bitcoin directly.
This has after-all been the goal of "hard money" gold-silver bugs all along, since it's technically a retvrn to history, ending fiat where the notes are once again tied to an underlying asset.
What's funny about that is it would be Bitcoin undoing Gold's failures because Gold is not instantly transferrable/auditable and so fiat was born.
Agreed, I don't consider it a real L2 either.
And gold infrastructure instantly developed fractional reserves too. History does not repeat itself it rhymes
I think that's the ultimate question, is Bitcoin's audit-ability/portability enough to head off fractional reserve banking on such a hard money standard. Will it repeat/rhyme this failures of gold...
I think the idea of proof-of-reserves/liabilities around with Bitcoin and "crypto" is one reasons it even gets there in the first place.
Even despite their lack of transparency, people can still watch known Coinbase address on chain like a hawk for macro moves. I think there'd be even more pressure for transparency at the state level.
Imagine rival countries accusing each other of not having sufficient reserves to back their currency and causing currency runs. There's only one way to innoculate for that, transparency. Bitcoin is for enemies in that way: the ledger weaponized transparency.
What is this bullshit? Are you retarded? Please read again the bitcoin whitepaper, seems that you forgot or don't uneeestand why bitcoin exist.
if you read carefully I did not say I think it is a good thing
If you did not get that maybe your reading comprehension is retarded.🤣🤣
just by making this crap post it makes you retarded
Why. Don't you think the US government being on the verge of issuening Bitcoin backed securities is worth discussing? Ithink it is.
please stop with all these idiocies ! You better stop here, now that we know you are retarded.
Again: I did not say I think it is a good thing. Just that it is (or asking if it is) happening.
Maybe you can explain what your issue is before throwing insults around.
https://postimg.cc/RWD93Tmy
Read: https://bitcoin.org/bitcoin.pdf