Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
It's Penny Stocks 2.0 all over again.
That's where the old wall street guard has been trying to take it for awhile now. Pump & dumps and the 'naked short' and 'stick it to the man' revolutionary narratives organized by fraudsters that ran rampant in penny stocks just repackaged for a new set of rubes that think they are geniuses when they are just in a bull market. All I can say is I'm glad I found this board awhile ago.
The thing that went down with GME is merely a foreshadowing of the hard destruction that awaits people who try to abuse a system that has no escape valve.
Care to elaborate? You mean over-shorting, hypothecation, etc?
That kind of thing, yes. Most exploits in current markets are enabled by the tradeoffs with the asset at the center of the exploit. I say "at the center" because it is also the instruments designed to take advantage of limitations in the asset, or even regulatory structures.
But Bitcoin does away with a lot of those sorts of handles.
For example... gold is extremely difficult to custody and transport. It is heavy and there is a lot of value tied up in a physical thing the needs a tremendous amount of effort to be spent in protecting it. m And it is expensive to assay.
https://www.youtube.com/watch?v=M6qEee1_4fw
So it tends to be consolidated in well protected fortresses and vaults. Then all the trade has to do with paper that represents the asset. And because of that... an almost limitless amount of schemes can be designed to take advantage of the fact that you might own gold on paper, but demanding delivery is often not realistic, or feasible. And sustaining the security even assuming control after the delivery is complete becomes quite difficult as well. So people settle for gold on paper, and then abstracted contracts for delivery of paper that represents gold. And options on those contracts. And so on.
Bitcoin as the first trust minimized digital (instant, ephemeral) bearer asset.
If customers suspect that Coinbase is a fractional reserve it is extremely simple thing for them to demand delivery of the asset. And in this case one of three things will happen.
Coinbase has the reserves, and delivers the bitcoin.
Coinbase does not have the bitcoin and goes broke as this happens. (my fav scenario... sorry people holding there!)
Coinbase defaults, and is somehow protected by a government.
Each of those ways exposes a terminal flaw that will drive the worldwide flow of bitcoin away from institutions that custody and into trust reduced, or minimized setups. Multi-sigs with third parties, large Federations, or self custody.
Bitcoin will be harder to play these games with EXACTLY because trusted third parties are security holes.
And we don't need them anymore.
I loved this vid... very funny... then I saw the Islamic Emirate of Afghanistan, the edges of the Shia / Sunni war in Al-sham (irak-syria) and knew, americans will forever be pussies... so this vid is gay stuff... funny, but gay.