Introduction
In a recent social media engagement, Adam Back challenged the rising claims regarding the existence of ‘paper bitcoin’, a term used to describe synthetic bitcoins that exceed the 21 million limit codified in Bitcoin’s design. Back, a pivotal figure in the cypherpunk movement and the creator of Hashcash—a foundational element of Bitcoin’s proof-of-work system—emphasized that substantial institutional purchasers are taking actual delivery of their bitcoin, rather than creating a facade with fake assets.
The Debate on Paper Bitcoin
The notion of paper bitcoin has gained traction as some cryptocurrency enthusiasts connect the dots between its purported existence and the relative stability in bitcoin pricing, which, despite increased institutional demand for large quantities, has remained flat. Back responded to assertions about persistent claims of billions of synthetic bitcoins on the market by stating,
“the individuals acquiring significant bitcoin amounts are indeed storing them with custodians, not engaging in any paper selling.”
Market Reactions
Back took to Twitter to rebut claims that bitcoin prices should have surged higher given the current market enthusiasm. He highlighted the improbability of concealing a vast quantity of nonexistent bitcoins within the marketplace, thus provoking a discourse among community members.
However, his perspective was met with skepticism by Lawrence Lepard, a well-known investment manager and author of “The Big Print”. Lepard argued against Back’s dismissal, pointing to the considerable amount of perpetual futures listed on Binance, which he claimed amounted to around $12 billion, supplemented by a worldwide total of $30 billion in outstanding derivatives—indicating a significant presence of paper bitcoin.
Conclusion
As conversations surrounding this contentious issue intensified, many bitcoin supporters have voiced that the market’s bullish momentum should have driven prices higher, pointing to the alleged paper bitcoin as a potential factor stifling a price increase. Patrick Back, in his ongoing dialogue, has sought requests for clarity and evidence to support these claims regarding hidden synthetic bitcoin within today’s vibrant and fluctuating market.
