Should Bitcoin Be Backed By Something?

𝐆𝐞𝐭 𝐓𝐡𝐞 𝐔𝐥𝐭𝐢𝐦𝐚𝐭𝐞 𝐆𝐮𝐢𝐝𝐞 𝐓𝐨 𝐁𝐢𝐭𝐜𝐨𝐢𝐧:
https://www.trader.university/courses...
Use the discount code YT99 to get the best price.

In this video, I discuss the problems with crypto/coins/tokens that are backed by something else like gold or US dollars.

Something-backed tokens must rely on a trusted third party to store and custody the underlying asset, as well as facilitate redemptions (i.e. conversions of the token into the underlying asset). This itself is a huge attack vector: if you want to attack the token, you need only attack the custodian or other centralized third party.

The failure of the gold standard and Nixon suspending the USD's convertibility into gold is a perfect example of failure mode.

If you own a something-backed token, you need to trust the issuer to keep its promises (unlike the US did to France)-- and you also need to trust that the issuer itself will not be pressured by a stronger outside party to do the same thing.

Trust, trust, trust. Why in the world would we ever want to reinvent this kind of system that has failed again and again?

When you hold your own Bitcoin private keys, your Bitcoin is a bearer asset that cannot be turned off, frozen, or deactivated by anyone.

You also need a native bearer asset like BTC to pay the Bitcoin miners. If they were being paid in USD or physical gold, that would be another attack vector.

At the end of the video, I discuss how Bitcoin has no competitors as a digital bearer asset. Ethereum's premine, its move to proof of stake, and its repeated hard forks makes it unsuitable.

Not investment advice! Consult a financial advisor.

Pax gold:
https://paxos.com/paxgold/

Nixon shock:
https://en.wikipedia.org/wiki/Nixon_s...
https://www.rstreet.org/2021/08/16/fi...

Ethereum OFAC censorship:
https://www.mevwatch.info/

Ethereum devs will decide when to let you unstake lol:
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https://pbs.twimg.com/media/FhXP7QZWQ...
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I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos.

My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#bitcoin
#crypto
#gold

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