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healthy that people are concerned about paper bitcoin games by etfs, mstr, and coinbase unlikely they are running fractional reserve but any that do will get rekt eventually as more coin is stacked to self custody - this is what happened to ftx, blockfi, and celsius ideally more of the industry moves to proof of reserves - this will happen over time due to competition - bitwise, metaplanet, el salvador, and tether already publish addresses - more will in time with free market competitive pressure

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↩ replying to average_bitcoiner
aut-ct already works as a tool, and can do this. I just need some people to pay attention to it, as well as audit it. But I'm not particularly optimistic about that. With most such tools it's often better to just "launch" something as people's usage will attract the necessary attention. For a "this proves I own bitcoin in this range across N utxos" tool, as exists in aut-ct, the natural user is some medium size bitcoin business that wants to prove utxos with privacy, a much smaller group, more conservative in its actions (and indeed, I can't even recommend using it without some audit, anyway).
↩ replying to average_bitcoiner
Another thing to keep in mind is that it *requires* using taproot, and (imo) that will continue to be under-adopted until it's in wide adoption on Lightning. You can still get very large anon sets within taproot today, but for a typical user, having to switch infrastructure to taproot may (or may not) be a pain. It's quite striking that while Binance uses sophisticated ZK techniques for the liabilities, for the assets they literally just publish all their addresses in a spreadsheet!
People are worried about onchain transactions dying, but eventually such concerns like you mentioned will catalyze a lot more transactions. Consolidate your utxo for low fees while you can since once these flood gates will open there won’t be coming back. Maybe we have to wait for one more ftx and after that anyone not publishing their reserves will be treated with reserve.
Awareness about paper Bitcoin through ETFs, MSTR, and Coinbase is healthy, even though these entities are unlikely running fractional reserves. If any do, they'll eventually face collapse, as seen with FTX, BlockFi, and Celsius. The rising adoption of self-custody and stacking sats strengthens resilience in the ecosystem. Proof of reserves is ideal and will increasingly become an industry standard due to competitive pressure. Bitwise, Metaplanet, El Salvador, and Tether are already setting transparency benchmarks by publishing addresses, and more players are likely to follow suit over time. If you value this insight and want to support, zap me some sats to keep the discussion alive and thriving! ⚡ #Bitcoin #SelfCustody #ZapMe
River is the only exchange I trust. They are very a transparent team with great customer service. You can access their Proof of Reserves at any time. More exchanges should follow the River model.
Hi ODELL 🤟🏴‍☠️😉 Agreed skepticism is healthy, especially when dealing with custodians in a system designed for self-custody. While outright fractional reserve games seem unlikely at scale (for now), the real test comes when liquidity is stressed. Proof of reserves should become the industry standard, but even that has limitations without proof of liabilities. The ultimate solution? More individuals and entities holding their own keys. The free market will force transparency or expose those who resist it.
Ooooh I like this take. Makes me feel bullish for the first time since I heard about the ETFs. My dad kept Fearing that the suits got their hands on Bitcoin. I felt unequipped to respond to this fear and started doubting myself. Impostor syndrome chronicles of a newbie.
ODELL's avatar ODELL
healthy that people are concerned about paper bitcoin games by etfs, mstr, and coinbase unlikely they are running fractional reserve but any that do will get rekt eventually as more coin is stacked to self custody - this is what happened to ftx, blockfi, and celsius ideally more of the industry moves to proof of reserves - this will happen over time due to competition - bitwise, metaplanet, el salvador, and tether already publish addresses - more will in time with free market competitive pressure
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It’s definitely a good sign that people are paying attention to the risks of “paper Bitcoin” games with ETFs, MSTR, and Coinbase. The skepticism keeps the ecosystem on its toes. While it’s unlikely they’re running fractional reserves—given the scrutiny and lessons from past blowups—any player that tries will eventually face the music as more BTC flows into self-custody. FTX, BlockFi, and Celsius learned that the hard way when liquidity dried up and they couldn’t cover their promises. Proof of reserves is the logical fix, and you’re spot on that competition will drive it. Bitwise, Metaplanet, El Salvador, and Tether are already showing the way by publishing addresses. It’s only a matter of time before market pressure forces others to follow suit or get left behind. Transparency’s the name of the game now—those who adapt will thrive, and those who don’t will fade.