Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 60

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1
Chunk 60
---
 depreciation in the MarketVectorTM Bitcoin Benchmark Rate and
could adversely affect the value of the Trust.

The Trust is not actively managed and does
not and will not have any strategy relating to the development of the Bitcoin network, nor will the Trust seek to avoid or mitigate
losses from declines in the bitcoin price. Furthermore, the impact of the expansion of the Trust’s bitcoin holdings on the
digital asset industry and the Bitcoin network is uncertain. A decline in the popularity or acceptance of the Bitcoin network,
or the value of bitcoin, would harm the value of the Trust.

Digital asset networks face significant
scaling challenges and efforts to increase the volume of transactions may not be successful.

36 

Many digital asset networks face significant
scaling challenges due to the fact that public blockchains generally face a tradeoff between security and scalability. One means
through which public blockchains achieve security is decentralization, meaning that no intermediary is responsible for securing
and maintaining these systems. For example, a greater degree of decentralization generally means a given digital asset network
is less susceptible to manipulation or capture. Achieving decentralization may mean that every single node on a given digital
asset network is responsible for securing the system by processing every transaction and maintaining a copy of the entire state
of the network. However, this may involve tradeoffs from an efficiency perspective, and impose constraints on transaction processing
speed (“throughput”).

As of December 31, 2020, the Bitcoin network
could handle approximately three to seven transactions per second. In an effort to increase the volume of transactions that can
be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed
and throughput of digital asset transactions. In August 2017, the Bitcoin network was upgraded with a technical feature known
as “Segregated Witness” with the promise of increasing the number of transactions per second that can be handled on-chain
and enabling so-called second layer solutions, such as the Lightning Network or payment channels, that have the potential to increase
transaction throughput by processing certain transactions outside the main Bitcoin Blockchain. However, this upgrade, and second
layer solutions generally, may fail to achieve the expected benefits or widespread adoption. An increasing number of wallets and
digital asset intermediaries, such as exchanges, have begun supporting Segregated Witness and the Lightning Network, or similar
technology. However, the Lightning Network does not yet have material adoption as of the date of this Report, and there are open
questions about Lightning