The recent entry of BlackRock, the world’s largest asset manager, into the Bitcoin market through a Bitcoin spot ETF fund has reignited the long-standing debate surrounding Bitcoin’s ethos and principles, particularly around the concept of self-custody and the original vision of decentralization in the crypto space.
On 27 Oct 2024, Cardano founder Charles Hoskinson threw fresh light on the concerns surrounding BlackRock’s influence, questioning if some in the crypto community might be shifting their views on the foundational principle of “not your keys, not your crypto.”
Hoskinson’s remarks came in response to CoinBureau co-founder Nic, who clarified that it isn’t BlackRock purchasing Bitcoin directly. Rather, individual and institutional investors buy shares of BlackRock’s Bitcoin ETF (iShares Bitcoin Trust or IBIT), which then represents their ownership in the fund’s holdings of Bitcoin. BlackRock itself does not directly control these purchases but relies on “Authorized Participants” and custodians to acquire and manage the Bitcoin, with no direct claim by individual investors on the Bitcoin itself.
Stop saying "Blackrock bought" x amount of Bitcoin.
-----Cryptonews AD----->>>
Sign up for a Bybit account and claim exclusive rewards from the Bybit referral program! Plus, claim up to 6,045 USDT bonus at . https://www.bybit.com/invite?ref=PAR8BE
<<<-----Cryptonews AD-----
It's not BlackRock. It's individual and institutional investors that buy IBIT ETF shares on the market
Then, IBIT's Authorised Participants work with crypto market makers / custodians to buy & store the BTC
You're welcome. pic.twitter.com/N5l2l6zB4i
— Nic (@nicrypto) October 26, 2024
Hoskinson’s response addresses a deeper issue: whether such an ETF, despite its potential to increase Bitcoin’s price and mainstream adoption, aligns with the decentralized ideals of cryptocurrency. The Cardano founder highlighted how the “not your keys, not your crypto” mantra—a key tenet of Bitcoin’s philosophy emphasizing individual control over one’s crypto assets—could become compromised with large-scale institutional involvement.
Hoskinson raised concerns over BlackRock’s Bitcoin ETF, arguing that it contradicts Bitcoin’s foundational principles. He warned that ETF holders lack true ownership since they don’t possess the private keys, meaning their investment is reliant on BlackRock’s custodians. This setup, he argued, introduces risks of centralization, especially if large institutions like BlackRock gain significant influence over Bitcoin’s supply and governance. While some believe ETFs will legitimize and expand Bitcoin adoption, Hoskinson sees this as a potential shift away from decentralization, questioning if reliance on traditional financial mechanisms aligns with Bitcoin’s mission.
https://bitcoinik.com/cardano-founder-criticises-blackrock-btc-etf-highlights-not-your-keys-not-your-crypto-debate-and-centralization-risks/feed/
https://bitcoinik.com/cardano-founder-criticises-blackrock-btc-etf-highlights-not-your-keys-not-your-crypto-debate-and-centralization-risks/feed/
