Thread by @ObiWanKenoBit

0/A thread on rehypothecation and individual responsibility to secure bitcoin 👇

1/Rehypothecation and collateral chains creating synthetic aka paper claims to bitcoin is antithetical to Bitcoin’s promise of a one to one direct relationship between you and money.

2/This isn’t a trivial matter. Rehypothecation is one of a number tools which can be used to manipulate and adversely affect markets & potentially dilute bitcoin’s price and value as nascent money.

3/People mistake paper bitcoin as not useable. It’s very much useable as an asset which can be loaned, reloaned & used as collateral. No need for an onchain transaction when bitcoin can be commingled with other assets and create liquidity with a few keystrokes!

4/Shadow banks seem like strange otherworld and elsewhere entities. But every major bank engages directly and indirectly with shadow banking. They are together systemic risk agents created by financial deregulation in the last three decades.

5/U.S. Constitution framers experience with fiat lead them to enshrine commodity backed money. During the American Revolution colonies printed nearly $500M leading to hyperinflation. Washington said, “A wagon load of money will scarcely purchase a wagon load of provisions.”

6/We are at a similar inflection point. Early American efforts at maintaining gold/silver backed money were eventually undone by bankers lured by FRB & paper money enriching few at the expense of many.

7/These lessons cannot be forgotten nor must we have a laissez fair attitude to “business as usual” fiat shenanigans. Expressing ownership of bitcoin through control of private keys and breaking collateral chains is one way of declaring right to our money.

9/We should learn, share and prepare for traditional banking business practices which are designed “to tame bitcoin.” That is, control it.

coindesk.com/cme-groups-leo…

Fin/With Bitcoin we have a chance to remake money. Let’s not waste this monumental opportunity.