This argument (editing for clarity: “the argument that exchange insolvency is somehow good, because people will finally learn”), as good as it makes you feel to type, always ends the same way. These two questions are illuminating:
1. How do you expect users of this system to obtain their coins?
2. Have you ever in your life forgotten something even though you knew it was important?
Consider: You had to send fiat to an exchange to buy the coin. Unfortunately before you have a chance to spend it, the exchange halts all withdrawals. How did your hardware wallet help you here?
What in the world are you talking about? There is a period of waiting for confirmation, but after that you will have custody of your coins. It’s the users call whether they leave coins on the exchange or move them. The chance of an exchange going down during a transaction that is planned to be outgoing from the exchange is slim, even for nefarious exchanges. Just move your coins after you buy them, don’t leave them on the exchange.
Correct. Anytime an exchange becomes insolvent, some number of people end up losing everything - just by trying to onboard their money into the system (even if they plant to move it to hardware wallet ASAP). By your own admission, there is often even a mandatory waiting period here.
The point being: “good. not your keys not your coins” is not an appropriate response to exchange insolvency, and further makes you sound like a complete asshat. “just avoid the insolvency window!” is better advice (edit to add an explicit “/s” on this last sentence. Dunno what is with these downvotes).
I think the key point here is that the insolvency window is not an obvious thing to avoid, however you can always check to see if you have the keys, regardless of the state of the exchange. So without considering the insolvency of the exchange, if you don’t have the keys, a user shouldn’t think they have singular access to those coins. For this reason, I don’t think it makes you an asshat to assert that if you don’t have the keys you don’t have the coins. It’s meant to be a warning of something to avoid. Also how do you propose one avoid the insolvency window? It’s something that’s defined post-action, whereas evaluating ownership of the keys can be accomplished at any time.
I 100% agree with you that this is what OP intended.
My point is it’s a base trivialization of the facts, and regardless of whether you use your own wallet or not exchange insolvency is a viable risk to users of the ecosystem. There is nothing “good” about it, and further making broad generalizations like this about financial victims that are not 100% correct is, indeed, asshat-ery. But the latter is merely an opinion and precludes how one treats others.
> Also how do you propose one avoid the insolvency window?
I do not propose it can be addressed, but maybe someone else has ideas.
I don't think you have a good point. There are two separate things at play here.
The first is having an organisation that can't be trusted hold "your" coins for a long period of time. It is a bad idea because you could hold the coins yourself (that is, there is a less-bad alternative).
The second is buying coins from that same organisation. This may not be a bad idea, because the risks involved in the short transaction may be very low, and you may not have a better alternative.
Again, my point is that regardless of whether either of these things is a “good idea” or “bad idea”, it is not fair to call exchange insolvency a good thing; *one* reason here being that the second “thing” “has to exist” for the ecosystem to work.
I really did not expect this to be so controversial a point, but I suppose I haven’t done the best job expressing it.
It was somewhat difficult to engage with your comment because it felt kind of like it was strawmanning.
But I think the reality is you just misunderstood the original comment. The original comment was saying that it was good that people were withdrawing their crypto, not that it was good that any particular exchange had become insolvent. Only after I read your edited original comment did I realise that this is what happened.
When a crypto exchange fails I always say "That was unsurprising. Remember to hold your own coins." A lot of other people say similar things.
I do not say "This is a good thing. I'm sure that now that Failed_Exchange_1001 has failed people will finally learn to hold their own coins." I don't think I've heard many people suggest that.
Jesus, this is exactly what happened. I swear I clicked the headline, but somehow ended up on a tab about “Coinlist halting withdrawals”, not “Coinbase having withdrawals”. No wonder I felt like I was in the twilight zone.
Well. looks at the dozens of comments in this thread. My bad.
I don't think you understand how foreign this concept is to the vast majority of ordinary people. Buying a trusted hardware wallet, setting it up, moving their crypto, storing keys somewhere, storing the hardware wallet somewhere, etc. Plus most investors/wallets own far less than 1 BTC.
This is dead simple for anyone who does the research even without a hardware wallet. Use a usb based OS like tails, make an address, write down the 24 words or memorize them.
Ah yes, tails, the most user friendly and accessible of all OS’es. :)
I think you’re right that it’s still simple, but what’s lacking is a “follow these exact steps” guide. People don’t want to think too much about it, they just want to throw money at crypto.
Something like:
1. Buy X hardware wallet
2. Open account at X bank, store seed phrase in the vault. If your house burns down, your money is safe.
3. Here’s exactly how to use the hardware wallet for all common operations. Do this (and nothing else), and your money is safe.
If it was wrapped up in a nice package with a pretty red bow on it, people would buy into it. But I’d say I’m more crypto-inclined than most tech people, yet I’m still nervous. I was already burned by Gox and not eager to repeat that, so Coinbase is out. Which leaves hardware wallets, which I know nothing about.
I can’t tell if you’re serious or sarcastic but there’s no way my mother or father would be able to do this. My wife could but would but would find it annoying enough to feign ignorance and make me do it if I told her it had to be done.
I’ve got crypto enthusiast friends who refuse to use hardware wallets because of the inconvenience.
I appreciate your sense of humor. Setting up a Linux distro on a USB dongle and memorizing 24 words is definitely the most user friendly crypto wallet solution I have heard about.
People need to be discouraged from trusting third parties in "holding" "their" Bitcoin. Ftx debacle was a Darwin moment for a lot of nonchalant investors.
No, people need to be discouraged from participating in the scam. All crypto"currencies" are a scam, they have never been anything else and for the foreseeable future they can't be anything else either. Even calling them "currencies" was a genius strike of marketing because they are so obviously not one but it helps building the hype. Which is all there is.
Unfortunately, as long as there is some potential profit to be made by normies on crypto, it probably won't be going anywhere anytime soon.
Though to give Bitcoin some of the (marketing) credit, we get Blockchain, DEFIs, DAOs and soon CBDCs out of it. So, there's some massive innovation to be had in that sector.
All of that is just smoke and mirrors over the fundamental scam of it. Try to understand this: all of crypto is a scam. They can not be anything else. Not for now.
Sounds like you are making an emotional argument here. Outright scams do exist in the crypto arena since we are in the early days. But 2-3 decades from now, I can see crypto (or some version of it) being robust and ubiquitous.
If we take up those two coins you mentioned and use them then your argument starts to fall.
Dash is already popular for payments and transactions with low fees.
Bottom line, a total miner capitulation event on any of these coins that are cheaper to mine is 100% unlikely. Computing and energy costs go lower and lower every year.
Low fees doesn't change the fundamental negative sum game nature. It's still negative. Zero fee would change that but for obvious reason those do not become popular: you actually need to put in effort to scam with those. The reason bitcoin became so popular is because the only way to win in a negative sum game is to hype up the game and sell your seat and so everyone buying needed to hype even harder. Playing the game only leads to loss. This dynamic doesn't exist with a zero transfer fee coin.
There was a time then most people couldn’t use a keyboard either. Many software developers still can’t touch type correctly. Eventually everyone either learned or found their own way, died, or is simply locked out of modern technology.
If crypto is “the way of the future”, and it some how catches on, then people are simply going to learn how it works or get locked out of future markets. Due to the seemingly large number of crypto scams, a lot of people will lose their money along the way.
Not that I think it should succeed, but if there is a truly compelling use case for everyone to switch over, I don’t think we’ll let the complexity stop us.
That's an oversimplification. I would argue that the more technologically complex inventions had to go through multiple rounds of adjustments in order to be able to appeal to the masses. And those inventions that could not do that effectively remained very niche.
Having a hardware wallet solves very little for small-time investors (the 99%) as they are in this to speculate, not to keep their savings for the next several decades. With everything moving online, it's close to impossible to convince even more tech-savvy people to plug in a USB dongle every time they want to make a transaction. You could say that then it's their own fault if something goes wrong as they "don't own the keys", but historically this type of blame-game did not last. Government regulation and insurance is a much more effective way forward.
>I don't think you understand how foreign this concept is to the vast majority of ordinary people.
I don't expect the vast majority of ordinary people to have any interest whatsoever in crypto.
I would expect someone that has their entire net worth in paper currency to take steps similar to a bank in order to secure it -- a safe is safer than a mattress, a vault is safer than a safe -- I don't think that it's asking much for someone that is in a similar situation with cryptocurrency to take similarly large precautions.
It takes effort and study to understand how to better secure one's life, this is no different.
It takes no effort to keep your savings in a bank account. Literally no effort: no knowledge of the financial system, no specialized device ownership, no additional investment.
It takes lots of effort to store money in a bank savings account: You need to send them info, and sign documents, and you need ID. I'm told lots of people can't get ID and don't know where the DMV is. That's why KYC is racist.
Personally I have no problems with voter ID laws (especially if they are implemented over time with an appropriate level of support). However, I don't fully understand where you stand on this crypto/KYC topic - it almost seems like you are half-trolling, half-serious. Buying crypto without KYC is becoming almost impossible, and hacky workarounds are not a scalable solution. So that's not an argument against or pro crypto.
who will keep the value of coins pumped if normal people dont buy into the FOMO? seems like a fundamental problem if only a tiny hardcore of angry anarchists represent the demand for these coins
People in Mexico have been using PKI for more than 10 years. The Mexican IRS defined a system requiring everyone to get a private/public keypair and a certificate. (Including generating a cert rquest).
Everyone does it, including the most computer illiterate people. Gosh, accountants are super familiar with invoices
generated as signed XMLs.
If a very inefficient and corrupt government could do it , I'm positive a private company could find the way.
It's just a matter of finding the right analogies and encapsulating the complexity for people.
Are they using these small pieces of hardware that look like a calculator? Something similar is offered by several UK banks (slide your card in, enter code, sign a transaction). Again, not sure if you understand the vast gap between this and the work required to handle a hardware wallet.
As a counterargument: many more complex financial instruments existed for decades now and are not widely adopted because of both the cognitive load and the specialized software needed for participation. Adding hardware to this mix does not seem like a step in the direction of mass adoption.
Just to be clear, I am not saying we should not innovate in this space. On the contrary, the current state of hardware wallets is unacceptable. The only way to make this a viable option is drastic innovation. Just repeating "not your keys, not your crypto" and "get a hardware wallet" is disingenuous.
Actually, there are a whole range of metal seed backup systems available!
But seriously, write down the 12 seed words, keep it somewhere safe. Make another copy, tear it in half (6 words each) and keep one with a relative and one at work. Check them at 1, 2, 4, then every 6 months.
But for most people this is all overkill: just use a mobile wallet.
This isn't a good idea; every word an attacker knows makes the remaining words exponentially easier to brute force. if you're going to split your key into pieces, you should use something like https://linux.die.net/man/1/ssss
Correct answer here (no /s). Now unless youre a bitcoin maxi (props if you are), your coins are probably being fixed all the time by “authorities”, but I digress :)
The problem is of course most people do forget things, and regrettably prefer usable systems. This is just to say, we are still far from a system I would call usable, although I would say interesting progress has been made: multisig, hardware wallets, etc.
My only point in this thread is as follows: there is nothing “good” about this. It’s a failure of design and engineering for systems intended for humans. There is nothing to celebrate here, as the OP was oddly doing.
There totally is, but the good is only apparent to people with the perspective of most of our ancestors. Nixon took us off the gold standard in 71', and yet he lied at the time and said it was 'temporary'. Why was that? We grew up in school being told that the gold standard was a janky old technology that failed leading to the great depression. If that's true, why did we stay on the gold standard until 1971 and why did Nixon lie when he took us off of it?
All of history, property rights have been workable only with armies to enforce them. And what inevitably happens is that the armies will end up stealing from the people whose property rights they are ostensibly protecting.
The existence of property that, in the hands of a skilled user, _cannot_ be stolen, is, indeed revolutionary.
I agree that this system is far too complex for most people. Most people will probably just end up using federated chaumian mints. "All" they will get is the benefit of a currency that doesn't depreciate, year after year, and the resulting cultural shift that arises when people don't need to participate in complex mechanisms they don't understand, just to save for the future.
I think we are likely to see the rise of a technobrahmin class that understands both crypography and ML, and uses this knowledge in the service of tiny micro-tribes of people they grew up with. Civilization has long required specialization, and i think we're about to see a migration of 'trusted information authorities' from places like the New York Times, all the way down the social hierarchy to, 'a guy i went to grade school with that i know is honest'.
I'm not a fan of 2. I'm definitely in the camp of -- one of the most irresponsible things ever created was third-party password managers. I'm fully aware than capitalism isn't a fan of "sorry, but this is hard and you should just learn it.."
But passwords and security on computers is hard and you should just learn it, at least at this stage.
It is THEORETICALLY is possible to have a world wherein password security is made easier for the user -- but it's not viable until you somehow bring in skin-in-the-game for the third party who's taking on the responsibility, e.g. liability or lawsuits or some other real actual punishment for the third party that screws up.
I don’t see how question 1 is valid. You just move the coin immediately after acquisition. If you’re speculating and leaving them on the exchange that’s risky. But as far as “obtaining” the coins, you simple have to be in control of the keys. This can be accomplished within minutes or hours after purchase. Hence not your keys, not your coins.
Too much risk without sufficient liability. They work as long as they work, but there's no punishment for if they break. They increase your threat surface by an entire party that's centralized.
Grandma's little notebook next to the computer isn't perfect, but can be much safer.
Are you referring to something online, like LastPass or 1Passord? I do not like the idea of online password managers at all.
Another issue with PM sites is a couple of them have bumped features up to higher pricing tiers, leaving some people up a creek and unable to access their own information.
I would generally expect users to use a system like Coinbase to buy the coins and then transfer the coins into one of their own wallets.
If you want to sell your coins to someone you transfer the coins to coinbase, then transfer them.
2 - Yes, but not something that I use with any sort of frequency. If you store bitcoins in a wallet and leave them for years and years you would expect to forget password eventually and that would be a problem.
So, don't do that.
If you're super scared of it, go ahead and use an exchange, be aware that could be screwed.
See my replies below. You could 100% use Coinbase and plan to use an offline wallet the exact way you have prescribed, and still lose everything due to exchange insolvency.
To save time on replies: “you’d have to be unlucky for that to happen,” and “just try to be fast” is not an ideal mitigation strategy.
> I would generally expect users to use a system like Coinbase to buy the coins and then transfer the coins into one of their own wallets.
I would wager good money that at least as much currency has been lost from individual wallets (forgotten passwords, crashed hard drives, stolen credentials, weak brainwallets, malware, scams, death of the owner, etc.) than had been lost to exchange failures.
Exchange failures are loud, public, and occasional. Individual wallets fail quietly, privately, and every few constantly. We just don’t hear about it in aggregate.
The phrase "land of the free, home of the brave" has to be read as "land of the free, because we are brave enough to take personal responsibility for our freedoms, rather than entrusting powerful authorities to safeguard them for us."
Completely agree - the individual loss of funds from wallet hacks, forgotten seed phrases, clipboard intercepting malware, spear fishing, DeFi etc is likely greater than what has been lost through centralized exchanges, etc. It’s really troubling to see that others in the “21 million club” almost encourage such losses as they “make theirs worth more”.
It’s like comparing deaths from car crashes to airplane crashes. Unless you’re personally impacted deadly car crashes are invisible (often not even reported in local media) compared to the big and dramatic deaths from plane crashes (often ~300 people at a time) that are covered in the news with the same level of intensity as centralized exchange losses.
50k people die from car crashes every year in the US but you essentially never hear about it as they’re largely considered a somewhat-reasonable and acceptable loss considering the population, number of cars, miles driven, etc in the US. Unfortunately with the “hope you learned your lesson” attitude in crypto.
At least with improved safety standards, etc the number of deaths from cars has been declining. With every mass exodus like this and the state of UI/UX in crypto the losses from self-custody are going to explode in the coming weeks, months, and years. To make matters worse I don’t think the average user rushing to transfer funds away from an exchange fully understand that they’re completely on their own at this point. Unlike every experience they’ve ever had with traditional finance there’s no such thing as a password reset and there’s no toll-free number to call for help when you inevitably lose funds via a hack, forgotten seed, etc.
Not everyone is cut out to be their own bank. Many people out there have the tech skills to use a hardware wallet and back up 24 words, but also many don't. Anyone in the second group who wants exposure should probably not use an exchange and instead hold out for an ETF (despite what the TV commercials say)
And a fair number of people in the first group are overly optimistic, too. This is the kind of thing you can tell yourself you’re good at, but then life happens and people forget to practice or get sick/old/injured and this risks of losing everything are higher than you might like.
For cold storage, I think hardware wallets are unnecessary and add risk of the supply chain of that device. Those manufacturers are good at marketing what they sell.
If your hardware wallet dies it should be merely an inconvenience, since your seed phrase can be restored to another device. Since it's an open standard, it's even portable between device manufacturers in case one goes out of business.
Your second concern is valid - choose a device that's been audited.
That is why banks were invented in the first place: running around in the middle ages with bags of money was downright suicidal. Keeping it in your home was a bad idea because at any moment as plague or war could break out. From Japan to Italy every society came up with a centralised solution.
Casinos how exactly? Bitcoin crypto is meant to be self custodied. This is THE most trustworthy solution. You are just replacing one counter party risk with another.
1) Swan Bitcoin, pretty simple, not an exchange, aimed at HODLers, easy and semi automated regular transfer to self custody, refrains from all involvement with shitcoins, promotes education about bitcoin.
Liquidity also matters: if they tried to convert those bitcoin into dollars what are the odds that they’d find anything like buyers at the $1.5B range without causing some market upset?
I think it’s insufficient: that normally refers to someone using a market order and getting a small bit off of what they expected but, especially lately, I wouldn’t rule out an attempt to cash out something in the billion range causing much greater volatility because people are worried about more hacks or fraud coming to light.
If you have a better idea what it's worth than the market does, you should be out there making money through arbitrage instead of making snarky comments on the internet
in the famous words of Keynes, the market can stay irrational longer than you can stay solvent. I fully believe the intrinsic value of the entire crypto sphere is zero dollars, what I'm less sure about is when its followers are going to figure that out.
When you're betting on changes in market price you are betting on the beliefs of others about that price, the beliefs about those beliefs etc., not the intrinsic values of goods or services. (another important insight from the economist)
probably not except for crime which seems to be the only place where currencies like that have tangible benefits. Everywhere else you can replace a blockchain with a database and your system is probably 50x faster and simpler. A trustless system where you can lose your entire live savings because of one bad line of code with nobody to roll the transaction back is useless
> If electricity and computing power has a price, then so does bitcoin.
If bitcoin was worthless, electricity and computing power would still have a price. People just wouldn't use electricity and computing power to mine bitcoin.
There are lots of other coins that can be mined and yet are worthless.
As hinted by "price" != "worth," price and value ("worth") have specific economic meanings. A quick search will give you the Econ 101 explanation of these terms, so you can understand the difference:
I'm not going to argue terms with you, I'm not an economist. But I do hope that rwaksmunski also harumphs the term "net worth" when used by more respectable publications than cited cryptoslate.com, because I would argue "worth" of bitcoin is closer to money in whichever sense of the word than "net worth" is when usually mentioned.
There doesn't seem to be an issue here. Seems like someone withdrew their valid deposits. Looks like this news getting "views" because of the recent crypto related scams and losses.
Well, there's some evidence that people are withdrawing from exchanges (to their own custody, assisted custody, or other custodians).
This is probably a good thing, as it's the only real way to ensure they actually have your money. And it's a story if you're worried about being last one out in that case! (I think it unlikely for Coinbase TBH).
Definitely some people (myself included!) hope this becomes a cultural norm for Bitcoin. But that might be a bit optimistic!
??
Movement of 1.5 billion of bitcoin in two days seems at least _curious_, Worthy of Note. What don’t I get? This is just another day in bitcoin world I’m not aware of?
Assuming that this is a legitimate outflow, what does this mean? Does this mean people are not planning to sell their Bitcoin? Or they are mostly becoming aware of security risks?
How does a transaction like this provide security for both sides? Doesn't it require someone in a transaction like this to make the transfer first? Or is there some kind of digital contract that can be signed before the transaction takes place?
Trading with my cousin is less risky than that, he's honourable, keeps his promises, and does not need to know your keys to trade. Also, his operation is not financed through extortion.
Barter is what all trade is. Some trade goods are just more versatile than others. We call those "money" (not to be confused with "currency", which is fiat).
It is not recommended to split up your seed words[1]. Do not try to build your own scheme. If you want to store your keys geographically it is recommended to use multisig. You can also use a passphrase (13th/25th word) that can be stored separately from the 12/24 seed words[2].
It’s a lot easier to hide a piece of paper than it is to hide stacks of cash or gold.
Unscrew and hide behind a doorknob or a light switch, the inside of a clock, the bottom of a dresser, inside the wall trim, the leg of a couch, etc.
Then add controls on the wallet itself - only x can be withdrawn every 24 hours, and m out of n recovery methods (your trusted friends and family, a service which validated your email/ phone number, a pass phrase, an in-person office which validates your id and passport for a fee, etc), and you can be as secure as any bank.
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[ 2.6 ms ] story [ 225 ms ] thread1. How do you expect users of this system to obtain their coins?
2. Have you ever in your life forgotten something even though you knew it was important?
Consider: You had to send fiat to an exchange to buy the coin. Unfortunately before you have a chance to spend it, the exchange halts all withdrawals. How did your hardware wallet help you here?
The point being: “good. not your keys not your coins” is not an appropriate response to exchange insolvency, and further makes you sound like a complete asshat. “just avoid the insolvency window!” is better advice (edit to add an explicit “/s” on this last sentence. Dunno what is with these downvotes).
My point is it’s a base trivialization of the facts, and regardless of whether you use your own wallet or not exchange insolvency is a viable risk to users of the ecosystem. There is nothing “good” about it, and further making broad generalizations like this about financial victims that are not 100% correct is, indeed, asshat-ery. But the latter is merely an opinion and precludes how one treats others.
> Also how do you propose one avoid the insolvency window?
I do not propose it can be addressed, but maybe someone else has ideas.
The first is having an organisation that can't be trusted hold "your" coins for a long period of time. It is a bad idea because you could hold the coins yourself (that is, there is a less-bad alternative).
The second is buying coins from that same organisation. This may not be a bad idea, because the risks involved in the short transaction may be very low, and you may not have a better alternative.
Again, my point is that regardless of whether either of these things is a “good idea” or “bad idea”, it is not fair to call exchange insolvency a good thing; *one* reason here being that the second “thing” “has to exist” for the ecosystem to work.
I really did not expect this to be so controversial a point, but I suppose I haven’t done the best job expressing it.
But I think the reality is you just misunderstood the original comment. The original comment was saying that it was good that people were withdrawing their crypto, not that it was good that any particular exchange had become insolvent. Only after I read your edited original comment did I realise that this is what happened.
When a crypto exchange fails I always say "That was unsurprising. Remember to hold your own coins." A lot of other people say similar things.
I do not say "This is a good thing. I'm sure that now that Failed_Exchange_1001 has failed people will finally learn to hold their own coins." I don't think I've heard many people suggest that.
Well. looks at the dozens of comments in this thread. My bad.
I think you’re right that it’s still simple, but what’s lacking is a “follow these exact steps” guide. People don’t want to think too much about it, they just want to throw money at crypto.
Something like:
1. Buy X hardware wallet
2. Open account at X bank, store seed phrase in the vault. If your house burns down, your money is safe.
3. Here’s exactly how to use the hardware wallet for all common operations. Do this (and nothing else), and your money is safe.
If it was wrapped up in a nice package with a pretty red bow on it, people would buy into it. But I’d say I’m more crypto-inclined than most tech people, yet I’m still nervous. I was already burned by Gox and not eager to repeat that, so Coinbase is out. Which leaves hardware wallets, which I know nothing about.
I’ve got crypto enthusiast friends who refuse to use hardware wallets because of the inconvenience.
Though to give Bitcoin some of the (marketing) credit, we get Blockchain, DEFIs, DAOs and soon CBDCs out of it. So, there's some massive innovation to be had in that sector.
Dash is already popular for payments and transactions with low fees.
Bottom line, a total miner capitulation event on any of these coins that are cheaper to mine is 100% unlikely. Computing and energy costs go lower and lower every year.
If crypto is “the way of the future”, and it some how catches on, then people are simply going to learn how it works or get locked out of future markets. Due to the seemingly large number of crypto scams, a lot of people will lose their money along the way.
Not that I think it should succeed, but if there is a truly compelling use case for everyone to switch over, I don’t think we’ll let the complexity stop us.
Having a hardware wallet solves very little for small-time investors (the 99%) as they are in this to speculate, not to keep their savings for the next several decades. With everything moving online, it's close to impossible to convince even more tech-savvy people to plug in a USB dongle every time they want to make a transaction. You could say that then it's their own fault if something goes wrong as they "don't own the keys", but historically this type of blame-game did not last. Government regulation and insurance is a much more effective way forward.
I don't expect the vast majority of ordinary people to have any interest whatsoever in crypto.
I would expect someone that has their entire net worth in paper currency to take steps similar to a bank in order to secure it -- a safe is safer than a mattress, a vault is safer than a safe -- I don't think that it's asking much for someone that is in a similar situation with cryptocurrency to take similarly large precautions.
It takes effort and study to understand how to better secure one's life, this is no different.
They would also have to avoid major exchanges for any operations, because Coinbase KYCs the crap out of you.
Everyone does it, including the most computer illiterate people. Gosh, accountants are super familiar with invoices generated as signed XMLs.
If a very inefficient and corrupt government could do it , I'm positive a private company could find the way.
It's just a matter of finding the right analogies and encapsulating the complexity for people.
As a counterargument: many more complex financial instruments existed for decades now and are not widely adopted because of both the cognitive load and the specialized software needed for participation. Adding hardware to this mix does not seem like a step in the direction of mass adoption.
Just to be clear, I am not saying we should not innovate in this space. On the contrary, the current state of hardware wallets is unacceptable. The only way to make this a viable option is drastic innovation. Just repeating "not your keys, not your crypto" and "get a hardware wallet" is disingenuous.
For the bitcoin economy to hold any significant value whatsoever, you need the people who are using exchanges and "banks".
If it works for only a handful of people, you may as well trade unsealed copies of "Zelda II" between each other.
But seriously, write down the 12 seed words, keep it somewhere safe. Make another copy, tear it in half (6 words each) and keep one with a relative and one at work. Check them at 1, 2, 4, then every 6 months.
But for most people this is all overkill: just use a mobile wallet.
This isn't a good idea; every word an attacker knows makes the remaining words exponentially easier to brute force. if you're going to split your key into pieces, you should use something like https://linux.die.net/man/1/ssss
If you want money that can be 'fixed' for you by the authorities, well, that's what you'll get. They'll fix it for you real good.
The problem is of course most people do forget things, and regrettably prefer usable systems. This is just to say, we are still far from a system I would call usable, although I would say interesting progress has been made: multisig, hardware wallets, etc.
My only point in this thread is as follows: there is nothing “good” about this. It’s a failure of design and engineering for systems intended for humans. There is nothing to celebrate here, as the OP was oddly doing.
> there is nothing “good” about this.
There totally is, but the good is only apparent to people with the perspective of most of our ancestors. Nixon took us off the gold standard in 71', and yet he lied at the time and said it was 'temporary'. Why was that? We grew up in school being told that the gold standard was a janky old technology that failed leading to the great depression. If that's true, why did we stay on the gold standard until 1971 and why did Nixon lie when he took us off of it?
All of history, property rights have been workable only with armies to enforce them. And what inevitably happens is that the armies will end up stealing from the people whose property rights they are ostensibly protecting.
The existence of property that, in the hands of a skilled user, _cannot_ be stolen, is, indeed revolutionary.
I agree that this system is far too complex for most people. Most people will probably just end up using federated chaumian mints. "All" they will get is the benefit of a currency that doesn't depreciate, year after year, and the resulting cultural shift that arises when people don't need to participate in complex mechanisms they don't understand, just to save for the future.
I think we are likely to see the rise of a technobrahmin class that understands both crypography and ML, and uses this knowledge in the service of tiny micro-tribes of people they grew up with. Civilization has long required specialization, and i think we're about to see a migration of 'trusted information authorities' from places like the New York Times, all the way down the social hierarchy to, 'a guy i went to grade school with that i know is honest'.
I'm not a fan of 2. I'm definitely in the camp of -- one of the most irresponsible things ever created was third-party password managers. I'm fully aware than capitalism isn't a fan of "sorry, but this is hard and you should just learn it.."
But passwords and security on computers is hard and you should just learn it, at least at this stage.
It is THEORETICALLY is possible to have a world wherein password security is made easier for the user -- but it's not viable until you somehow bring in skin-in-the-game for the third party who's taking on the responsibility, e.g. liability or lawsuits or some other real actual punishment for the third party that screws up.
I started using KeePassXC a few years ago, and I think it's the best thing since sliced bread.
Grandma's little notebook next to the computer isn't perfect, but can be much safer.
Are you referring to something online, like LastPass or 1Passord? I do not like the idea of online password managers at all.
Another issue with PM sites is a couple of them have bumped features up to higher pricing tiers, leaving some people up a creek and unable to access their own information.
If you want to sell your coins to someone you transfer the coins to coinbase, then transfer them.
2 - Yes, but not something that I use with any sort of frequency. If you store bitcoins in a wallet and leave them for years and years you would expect to forget password eventually and that would be a problem.
So, don't do that.
If you're super scared of it, go ahead and use an exchange, be aware that could be screwed.
To save time on replies: “you’d have to be unlucky for that to happen,” and “just try to be fast” is not an ideal mitigation strategy.
Buy your coins and then move them to your hardware wallet. It will be fine.
I would wager good money that at least as much currency has been lost from individual wallets (forgotten passwords, crashed hard drives, stolen credentials, weak brainwallets, malware, scams, death of the owner, etc.) than had been lost to exchange failures.
Exchange failures are loud, public, and occasional. Individual wallets fail quietly, privately, and every few constantly. We just don’t hear about it in aggregate.
The phrase "land of the free, home of the brave" has to be read as "land of the free, because we are brave enough to take personal responsibility for our freedoms, rather than entrusting powerful authorities to safeguard them for us."
It’s like comparing deaths from car crashes to airplane crashes. Unless you’re personally impacted deadly car crashes are invisible (often not even reported in local media) compared to the big and dramatic deaths from plane crashes (often ~300 people at a time) that are covered in the news with the same level of intensity as centralized exchange losses.
50k people die from car crashes every year in the US but you essentially never hear about it as they’re largely considered a somewhat-reasonable and acceptable loss considering the population, number of cars, miles driven, etc in the US. Unfortunately with the “hope you learned your lesson” attitude in crypto.
At least with improved safety standards, etc the number of deaths from cars has been declining. With every mass exodus like this and the state of UI/UX in crypto the losses from self-custody are going to explode in the coming weeks, months, and years. To make matters worse I don’t think the average user rushing to transfer funds away from an exchange fully understand that they’re completely on their own at this point. Unlike every experience they’ve ever had with traditional finance there’s no such thing as a password reset and there’s no toll-free number to call for help when you inevitably lose funds via a hack, forgotten seed, etc.
Your second concern is valid - choose a device that's been audited.
There are trustworthy businesses (e.g keys.casa) which help with custody. But it's a different business these days.
Going long on a DeFi token is like betting that the horse is more beautiful than the other horses in the stable
Not that there wouldn't be point for exchange if tokens had some real use or value. As forex exchanges have.
2) yes
(Or as they used to say: Have you ever tried to sell a diamond?)
* but im sure you’re just making a snarky comment so people know you think bitcoin is dumb.
Just like some paintings are worth $1.4 million. https://www.washingtonpost.com/nation/2021/10/15/shredded-ba...
When you're betting on changes in market price you are betting on the beliefs of others about that price, the beliefs about those beliefs etc., not the intrinsic values of goods or services. (another important insight from the economist)
If electricity and computing power has a price, then so does bitcoin. Whether that's a waste or not is another question.
If bitcoin was worthless, electricity and computing power would still have a price. People just wouldn't use electricity and computing power to mine bitcoin.
There are lots of other coins that can be mined and yet are worthless.
- https://www.forbes.com/sites/forbesfinancecouncil/2018/01/04...
- https://www.investopedia.com/ask/answers/061615/what-differe...
- https://keydifferences.com/difference-between-price-cost-and...
This is probably a good thing, as it's the only real way to ensure they actually have your money. And it's a story if you're worried about being last one out in that case! (I think it unlikely for Coinbase TBH).
Definitely some people (myself included!) hope this becomes a cultural norm for Bitcoin. But that might be a bit optimistic!
?? Movement of 1.5 billion of bitcoin in two days seems at least _curious_, Worthy of Note. What don’t I get? This is just another day in bitcoin world I’m not aware of?
If people store monies at home, robberies will grow. There are even bank armed robberies, home break-ins are a walk in the park for thieves.
If you have multiple wallets, you have multiple keys to manage.
You need banks. Hardware wallets and seeds phrases don’t work for most people.
Split and distribute geographically, if it's worth the effort.
[1] https://bitcoin.stackexchange.com/a/98423
[2] https://en.bitcoin.it/wiki/Seed_phrase#Two-factor_seed_phras...
Unscrew and hide behind a doorknob or a light switch, the inside of a clock, the bottom of a dresser, inside the wall trim, the leg of a couch, etc.
Then add controls on the wallet itself - only x can be withdrawn every 24 hours, and m out of n recovery methods (your trusted friends and family, a service which validated your email/ phone number, a pass phrase, an in-person office which validates your id and passport for a fee, etc), and you can be as secure as any bank.
the bankruptcy filing for FTX showed that Coinbase is exposed via Genesis Global Capital. They need 1 billion now?
Coinbase $500M or $1B hole?
https://bowtiedbull.substack.com/p/coinbase-basics-for-the-n...
https://www.reddit.com/r/gammasecretkings/comments/ukdvmi/ca...
https://twitter.com/BowTiedBull?ref_src=twsrc%5Egoogle%7Ctwc...
https://www.youtube.com/c/BowTiedBull
Was it a few large ones or many small ones?
Why the last 48hr and not two weeks ago? Was there an event that caused this?