Topic: What are the Similarities and Differences between Bitcoin and 'Bitcoin Trust'? (Read 174 times)

Hoping that the OP already got the idea about the difference of what he is asking. But it is good that he asked here because there are a lot of users that will help him understand if the materials or links provided to him are not sufficient. Also, the OP is already a member here, so hopefully, he should know where to ask for more help if it is still confuses him. If you want freedom from any third party organization and just take care of your own bitcoin stash, just get the bitcoin.

Trusts are investment entities. So a Trust for Bitcoin would hold Bitcoin and you would invest in the Trust. It is better to just own Bitcoin yourself. Trusts are for people that have some sort of legal restrictions on what they can invest in (like if your money is tied up in a retirement account which only allows you to invest in certain things or if you are some sort of Wall Street fund manager and you have all sorts of restrictions on where you can put money). The average person has no reason to deal with a Bitcoin Trust when you can easily just go to a crypto exchange and buy and store bitcoin yourself.

not your privkey. not your coin!!
trusts dont allow people to own bitcoin. the coins are locked into a trust.
thats the whole point of trusts. the investors are not actually owning the bitcoin.

a trust is different than a custodial wallet that allows withdrawal at any time. a trust is instead something where people buy ownership of the company(trust) shares. where the company(trust) is valued at the TRUSTS holdings. where by the holdings of the trust is measured by its bitcoin ownership amount multiplied by the bitcoin price.

trust investors can sell their share of the trust at the valued rate of this. they are not trading bitcoin. they are trading company shares at a rate influenced by the true bitcoin market rate.

there is still some regulatory issues about the conversion of trust shares to direct purchase of bitcoin should anyone want an option to sell their share for actual coin to then withdraw coin. there are some regulatory issues about insuring the trusts collateral. which is why everyone is waiting for the SEC to finally approve its first proper ETF.

The advantage is basically that it allows people to own bitcoins within the traditional financial system. This is important primarily because many laws and accounting policies require assets to be held by registered and regulated custodians.

For example, buying, selling, and holding bitcoins directly in an U.S. IRA are difficult, but buying, selling and holding shares of Grayscale Bitcoin Trust are not.

For example, companies and hedge funds may want to own bitcoins, but it is costly to set up the infrastructure to do that, so they rely on someone else, such as a Bitcoin trust, to do that for them.

Of course, the drawback of letting someone else hold bitcoins for you is that you are increasing your risk. The custodian may become a target of thieves (exchanges are frequently hacked), they may confiscate your bitcoins or allow someone else to confiscate them, or they may simply refuse to give you your bitcoins.

Bitcoin is Bitcoin and it is unique.

Other projects can fork from Bitcoin source code and name their projects as Bitcoin ABC XYZ, etc. but it does not make sense to claim their projects are real Bitcoin or better than Bitcoin.

Capital ventures, foundations, etc. can name theirs as Bitcoin Trust, Bitcoin Loyal, whatever but it does not mean Bitcoin is responsible for things they are doing in such entities.

Find more there: https://www.research.arcane.no/blog/btcetfs

I will try my best to succinctly answer your question.

The only similarity that I can see is that they both contain the word "Bitcoin," but that doesn't make them similar in principle. Bitcoin is a digital currency of a decentralized network of interconnected but independent nodes. There is no central server there that you need to trust that it won't deceive you. If you have your personal "copy of truth," that is, the copy of the blockchain, you don't need to ask others what is true or what is not. Instead, you can decide it for yourself by verifying everything beforehand. In other words, the network contains self-reliant, self-sovereign, selfish, and distrustful nodes that verify several times what they are being told. There is no place for trust in such a network.

Oftentimes people want to add the element of trust in a trustless network so that they can make a profit, surveil, control, ensure compliance with government regulations, etc. In short, they want you to hand over your bitcoin, they want you to be dependent, they want you to rely on them, they want you to trust them. That is why they keep coming up with different ideas such as bitcoin financial products, bitcoin derivatives and substitutes, bitcoin trusts and mutual funds, bitcoin vaults. Therefore, the main difference between bitcoin and bitcoin trust is that the former makes you independent and free while the latter makes you dependent and enslaved.

these "trusts" are not bitcoin/crypto itself. but company shares/common stock

people are buying into the compay(trust), not a coin. buying shares of a company where the collateral within the "trust" is then btc.
again people are not buying bitcoin or crypto they are buying regular fiat shares of a company. something that wall street are used to handling and offering.

its done because wall street is not used to offering crypto direct and there are many things related to regulations that make it difficult to offer crypto direct and insure their investors using government investor protection insurance.

so by offering company shares where the companies assets/collateral is crypto. allows wall street to do what it does, while valuing the company at whatever the bitcoin price is multiplied by how many coins the company has.

its much like instead of a woman just getting gold from a man. she buys in/marries the man holding the gold. thus her wealth value is measured by the gold the man has secured in his vault, because now she owns.. him
she just has to work out a legal way to get the combination to take the gold out of the guys vault, if she ever wants to leave the man but keep the gold.

It can an advantage for the following users:

1. Who dont want to get into the trouble of owning a wallet themselves - Owning a wallet means you need to secure it as well. People can go paranoid over the number of security measures to take to secure and keep it private. Although madness is not a good thing, some basic measures are needed. If you are less of a tech-savvy user, this might be a good alternative.

2. Having to observe the market for movements and then predict the buy/sell prices - essentially you are giving that headache to the owner of the Trust.

The topic you quoted comes from a group which manages such trust and act as financial advisors. I would suggest you to stop reading them and rather learn how to use and keep bitcoin safe yourself. ETF and Trusts are always there and will be popular in future but that does not do what bitcoin was meant to do.

Even for stocks, you do your research and buy what you know will go up, same with bitcoin and altcoins. Why pay someone else to do it for you?

There are people who have no knowledge and do not want to invest directly in Bitcoin, and they are looking for some other ways to invest and profit from Bitcoin. The best examples are these Bitcoin ETFs that appear everywhere, but also various other ways in which investors enter the BTC.

Of course, it is better to invest directly, but if you are a big investor who only cares about profit, then you go the detour and look for easier ways - the result may be similar or identical to the one who bought BTC and saved it in his non-custodial wallet. There are at least two groups of people, those who understand why Bitcoin exists (so everyone can be their own bank), and those who don't care about such things, they only care about profit at the end of the day - Bitcoin, gold, silver or stocks, that doesn't matter at all.

I think I am starting to understand it but what are the advantages of buying Bitcoin Trusts to the investors over buying Bitcoin directly themselves? Is there some sort of security for them?
For me I think it is just better to buy BTC on exchanges and do whatever I want with it rather than buying from Companies.

I added this keyword on google and in the results, all I could see was results that said Grayscale Bitcoin Trust and a few other small trusts here and there, I think there is no coin such as Bitcoin trust it's just a keyword. Maybe you might have seen the buying mechanism of Grayscale bitcoin trust which is a company that has invested into bitcoins and is holding them for appreciation.
This I think refers to the companies which Invest in bitcoins and give an option to general retail investors to invest in them, so you are investing into the crypto market indirectly, it's more like a mutual fund as the retail investors get the benefit of economies of scale.

Thanks for your reply but the link you referred me to is about Bitcointrust BCT but that's not what I am asking, here is a link to the article that talks about 'Bitcoin Trust' https://www.thinkadvisor.com/2021/06/23/bitcoin-trusts-what-you-must-know-before-investing/
Maybe if you go through it you can explain better.

It is a different coin from bitcoin, which is built on a different algorithm from bitcoin. You can check their thread on the forum for more details; https://bitcointalksearch.org/topic/ann-bitcointrust-bct-digital-asset-usa-pos-10-5274972
There are so many forks and coins with a similar name, but there is only one bitcoin.

Hello,
Today I decided to search "Can I trust Bitcoin" on presearch and I came across a keyword 'Bitcoin Trust'. Please I'll like to know if it is the same as Bitcoin or if it is different.
What I learnt was that it is BTC bought OTC and that it's not the same as BTC bought on exchanges.