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@ Xterplex Terloria Slolx
2025-06-09 06:17:02
### **The Illusion of “Paper Bitcoin”**
A critical distinction separates “real Bitcoin” from its paper counterparts:
- **Real Bitcoin**: The only form that exists as a bearer asset on the blockchain, secured by proof-of-work energy expenditure. Each coin originates from miners who convert electricity into cryptographic security. This process ties Bitcoin’s value to real-world resources, making it inflation-resistant and immutable.
- **Paper Bitcoin**: IOUs offered by exchanges, ETFs, or derivatives (e.g., Bitcoin futures). These claims promise Bitcoin ownership but are unbacked by actual coins akin to fractional reserve banking.
As Bitcoin gains legitimacy, institutions will increasingly push paper Bitcoin to meet retail demand, much like gold ETFs today. However, this creates systemic risk. During a crisis, holders of paper Bitcoin may discover their “coins” are unclaimable if counterparties fail. By contrast, real Bitcoin like physical gold cannot be confiscated or diluted. Those who wait for adoption to buy Bitcoin may find themselves trapped in a paper-based facade, never touching the underlying asset.
#Bitcoin #Nostr