Despite numerous companies announcing large purchases of Bitcoin and adopting it as a reserve asset, the price of BTC did not react to this news with a significant increase. This circumstance has led to thoughts about the use of paper Bitcoins among custodians.
The concept of paper bitcoins, which are not issued on the blockchain and are just numbers in a custodial service provider’s computer, is troubling members of the cryptocurrency community.
It seems like anyone can start a company Bitcoin Reserve and get tons of bitcoins for 104 thousand dollars… Something doesn’t add up here, — wrote a social network user Bitcoin for Freedom.
He also added that this practice makes companies that accumulate bitcoins dependent on storage service providers because they cannot directly control their cryptocurrencies.
Former Lead Developer Monero Riccardo Spagni suggested back in May that Strategy might buy paper bitcoins because Michael Saylor had not provided information about Bitcoin-addresses.
You are discouraged from asking where the bitcoins you buy are coming from. $4 billion in purchases ETF, $1 billion in Saylor purchases. And don’t even think about questioning those numbers, Spagni emphasized.
To say more about Michael Saylor explained such secrecy is achieved by taking precautions that protect the issuer, custodians and exchanges from harm.
