Nick Szabo  🔑

Never understood the hype of Bitcoin ETFs. You have the world's first global digital self-custodial asset... and people want to buy pieces of a fund that holds it in their custody, on bordered platforms controlled by third parties? Waste of time!

Because most people do Not want to self custody. The only people in crypto now are power users, developers and traders. If you wan this to be a global thing, then they will want something that is easy and regulated. That’s facts.

They are used to assets are already trust-based like bonds and stocks. OTOH most of the world's gold is under the custody of its owners. Bitcoin can be even more securely stored than gold. You are losing Bitcoin's main benefit by trusting somebody else to store it for you.

I 100% understand that, which is why I self custody. However, there are way more people than us that do not want to worry about storing their money/wealth themselves. Also institutions/hedge funds over a certain amount are not allowed to stores their clients assets.

Then why are they investing in Bitcoin in the first place? Perhaps they shouldn't.

They just want to get some in case it catches on. Makes sense.

Its worth noting that the VanEck Bitcoin ETF (the one with the best odds to be approved) will cost 25 BTC a share, so it wouldn't be a retail dumb money ETF. It's made for institutions (which can also be dumb sometimes, but that's not the point).

You’d rather bitcoin stay below $3k without their money?

Dumb money is a high time preference addiction. I care much more about Bitcoin's utility as a globally seamless and censorship-resistant store of value and medium of wealth transfer -- hopefully in future with more secure & friendlier wallets.

uncensorable transactions, immutable ledger, finite supply; the only three features bitcoin needs; simple bumper sticker/elevator pitch

That bags the question what DO we need now in your opinion @NickSzabo4 ?

Top of the list is better wallets: more flexible multisig and backup options (allow people to customize their own trust-minimized key management, including minimizing vulnerability to future self), better multi-generational key management, more and friendlier use of second layer.

A possible benefit could be those not interested in bitcoin beyond price can get exposure (ETF) and will be more hands off with trying to influence development, allowing cypherpunks to hold their own keys and continue developing with the right ethos. Win-Win.

That ICE guy did not sound like he wanted to be hands-off.

When Nick speaks, I listen. Very closely. My initial thought after reading the Baakt proposal, where they State they'll keep clients' private keys in 'secure offline storage', was - Trusted 3rd parties are security holes.