6 sats \ 4 replies \ @fiatbad 13 Nov 2022 \ parent \ on: FTX held less than 2 BTC 🤯 !! …Good news for Bitcoin sell pressure? bitcoin
Re-hypothecation. Pretty much promises to pay Bitcoin to someone in the future, even if you don't have it currently. We call it "paper Bitcoin".
This can still happen with Bitcoin, as @siggy47 just pointed out. But it is theoretically much more difficult to do a lot of re-hypothecation with Bitcoin sense there's no money printer to back it up. It can still happen, but it should be less of a problem under a Bitcoin Standard than it is with the current systems we have in place.
at the moment of withdrawal they would buy bitcoin and send it to you.
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Ah, this just dawned on me… Paper bitcoin keeps the price of actual Bitcoin suppressed. It’s also probably why the feds approved bitcoin futures but not an ETF. It’s like an escape valve on the escape valve.
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You should check out Willy Woo's twitter thread take on "paper" bitcoin:
https://twitter.com/woonomic/status/1571062841595269120?t=VWb45fnx72cBlHVYPEKJwA&s=19
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Yes it can still happen, if you buy paper bitcoin you accept the risk. If it's supposed to be "physical" bitcoin, you can check.
Wrapping has proved faithless, but presumably you took the risk for a reason.
This is what is different, with bitcoin you choose, with legacy finance, they made all the rules and all you get to do is follow them, while a few in power, like a Gensler, get to break them, "for the public good," of course.
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