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Living Only on Bitcoins

182 points by evilsocket 10y ago

xfour 10y ago
Couldn't you just as easily for 90% of the problems you mention use cash?
- evilsocket 10y ago
  i pay my rent and bills with wire transfer, same goes for 99% of my purchases ( mostly on amazon ) ... my paycheck is sent me as wire transfer as well ... how am I supposed to live just on cash? :) I only use cash to buy cigarettes basically XD
  - jbmorgado 10y ago
    If it all already works so fine with wire transfer for you then why should you use bitcoin anyway?
- paavokoya 10y ago
  Yeah but now you can do it on the internet. It's the best alternative for cash on the internet today.
- matt_wulfeck 10y ago
  Though I don't think they mentions it in the article, I get the author is suspicious that the government may also inflate the value of their money away -- which it actually is.
  - XorNot 10y ago
    Ah yes, for all of the not noticeable unless you're a multi-millionaire heavily invested in US Treasury bonds effect that is having on him.
qaq 10y ago
"I do not accept their fees, they’re way too much high for the quality of service they give to you." So to fight this the author is paying Cashila.com/BitWage.com transaction fees and CryptoPay fees and takes on the exchange rate risk. "I do not accept the concept of “trust”" Right Cashila.com/BitWage.com are operated by magic trustworthy unicorns.
- evilsocket 10y ago
  The difference is that with those services, you can always close your account and switch to a new one ( that's why I've specified to avoid using them as your primary wallet ) ... on the other hand, if a Bank goes bankruptcy, it's not that easy to recover your money.
  - jcater 10y ago
    In what country? Certainly not the US for FDIC insured accounts. My bank went under in 2009 and I never lost access to money.
    - tinkerrr 10y ago
      Did you have more than $250,000 in your account? If so, then you would have lost access to part of your money, or gotten if after a bankruptcy court hearing. Deposits are not the highest priority item on a bank's liability side of the balance sheet, and as a depositor, you'll likely not get paid in full.
      - giaour 10y ago
        That limit is per account, not per person. If you have more than $250K in an account, open a second one.
        mikeash 10y ago
        Not so. The limit is per depositor, per bank, per ownership category: https://www.fdic.gov/deposit/deposits/ https://www.fdic.gov/deposit/deposits/ Ownership category is just something like single, joint, retirement, etc. If you have more than $250,000 spread across multiple accounts but with the same account holder and ownership category, the excess is not covered.
matt_wulfeck 10y ago
> I do not accept the concept of “trust”, I don’t know those guys, why should I trust them? On the other hand, with BTC trust is not even considered to be a factor. This is a strange argument to me. There's plenty of community credit unions around. For trust you can walk right in and speak to the manager. Some of them are older than dirt. However there's nothing really new in these fears (especially after 1929). The solution has always been to keep your money locked up in a safe. Pay for things in cash or cashiers check.
- evilsocket 10y ago
  unfortunately, at least for me, keeping everything in cash is not a viable solution
  - fiatjaf 10y ago
    Why?
    - evilsocket 10y ago
      i pay my rent and bills with wire transfer, same goes for 99% of my purchases ( mostly on amazon ) ... my paycheck is sent me as wire transfer as well ... how am I supposed to live just on cash? :) I only use cash to buy cigarettes basically ... using only cash would make my life very, VERY, hard.
      - Karunamon 10y ago
        Aren't wire transfers incredibly expensive? (Something like upwards of $20 for the sender and the recipient?) That may just be an American thing though, countries with first world banking systems may have that sorted :)
        evilsocket 10y ago
        not where I live
zer00eyz 10y ago
I up-voted this because it is an interesting guide in securing bitcoin. I think this is stupid in the extreme, and you SHOULD NOT do this ever. Bitcoin is super interesting as an asset vehicle, but I would not put all my eggs in that basket. For as much as I might not like the Fed and some of the monetary policy it makes, it still gets things done. Right now bitcoin can't seem to change the block size, it needs to, and a squabble could cause serious devaluation of the product as a whole. There is also the ticking time bomb of the satoshi coins. Right now one individual (or group) controls something like 6% of all the coins available, and on a whim, could cause a major devaluation over night. All this having been said would I consider buying and holding some bitcoin as very LIQUID asset, and cash equivalent. I sure would. How much would I put into it, no more than a few grand honestly, a sum I am willing to loose.
- paavokoya 10y ago
  >Right now one individual (or group) controls something like 6% of all the coins available, and on a whim, could cause a major devaluation over night. The Fed does this on an annual basis and actually publicly states when it's going to devalue the currency through QE and rate cuts.
  - Frondo 10y ago
    The Fed, like all public institutions, is ultimately answerable to every voter. It's one of the benefits of citizenship, the decision-making power is in our hands. No, your one vote won't change everything to suit your personal preferences, and if you wanted to change the way some aspect of our system works (like money, or health care, or drug policy, or whatever) it'd be a lot of work, consensus-building, and time. But, at least the power is in our hands, collectively.
    - mixedCase 10y ago
      The Fed is not a public institution. It's a private bank. It's as Federal as Federal Express.
funkysquid 10y ago
Interesting idea, but it feels a bit like "how to use the stock market instead of a bank account". The author mentions fluctuations but seems to think bank fees would be more of an issue - but bank fees could be like $100 at most, where bitcoins could fluctuate all your cash by any percentage at all.
- f_allwein 10y ago
  I am also missing anything on the stability of Bitcoin over time. People in Europe, and especially Germany, are obsessed about that, given the experiences of hyperinflation in Germany in the 1920s, when it took 200 billion marks buy a loaf of bread: http://www.usagold.com/germannightmare.html http://www.usagold.com/germannightmare.html The Euro may not be perfect, but at least there are rules and institutions working to prevent this happening again.
  - pointsphere 10y ago
    https://btcvol.info/ https://btcvol.info/ shows the volatility over the last few years. Still very wild, but looks like it is decreasing.
RubyPinch 10y ago
> but if you move your BTC at the right time you’re not going to lose anything does this include a larger desire to spend BTC (because of wanting a value store, for example) compared to USD?
known 10y ago
Does https://en.wikipedia.org/wiki/McDonald%27s https://en.wikipedia.org/wiki/McDonald%27s accept Bitcoin?
- rtkwe 10y ago
  Actually read the article the author uses CryptoPay which works essentially as a prepaid debit card and provides a normal card that you can use like one from a bank.
wslh 10y ago
I take this kind of articles with the same interest of how to live with $ 100 per month or some other [self or imposed] living with hard constraints: it is insightful but don't try it at home. Also, when you analyze the details you can discover that using https://cryptopay.me/bitcoin-debit-card https://cryptopay.me/bitcoin-debit-card takes extra commissions beyond bitcoins (loading fee 1%), so the magic of bitcoins fade a little bit.
jbmorgado 10y ago
...and see your money oscillate around 20% per day with the probability that you can loose it all by having it easily stolen by some hacker or having bitcoin value completely crash. There is this group of people that had higher education and are well versed in system security, they are called sys admins and even they get hacked some times... but here you are trying to convince us to put all our money into easily movable and untraceable bits in some bitcoin wallet claiming it it the safer option we have.
- j15t 10y ago
  > and see your money oscillate 20% per day I get that you're not a fan, but exaggerations don't enhance your argument. Over the last 60 days the XBT/USD pair has an average volatility of 1.23 % [1] which is obviously higher than most major currency pairs, but comparable to a many stock markets. That is, many people invest money in securities with similar or greater volatility profiles. > easily stolen by some hacker Whilst Bitcoin is obviously less user friendly than fiat currency, an experienced user like OP can make store their Bitcoin in a way that makes it much more difficult to steal than conventional payment systems. Firstly, using a hardware wallet (with offline backup) will make your Bitcoin almost invulnerable to 'hackers', plus the use of multi-sig can allow one to dial up physical security to very high levels. Compare that to conventional payment systems like a credit card - all your credentials are on your card! Anyone who handles your card (waiters, cashiers) gets access to all of your credentials, for the life of the card! (Bitcoin's use of public key cryptography is far more sane in my opinion). And any malware on your computer that could steal Bitcoin could also steal your CC information etc. The only reason that this isnt more of a problem is because by using a bank you are paying insurance for your money and the Bank will generally reimburse you for small amounts - this doesn't make the conventional payment system more secure, just more insured.
  - j15t 10y ago
    [1] https://btcvol.info/ https://btcvol.info/
  - jbmorgado 10y ago
    You tacitly disregarded the points that don't suit your narrative. 1st. It's not the average volatility that matters it's the maximum volatility that you can normally have. This year it only happen once to have 20% it's true. But you have plenty of days where it oscillates more than 5%. 2nd. Bitcoin is much easier to steal than conventional payment systems like reality tells us, not only because of it's lack of security but also because of accountability. It's hacker free reign, you just steal bitcoin and send it anywhere you want and you have no more trouble. In traditional payment systems this doesn't happen like you try to imply, not because it's insured but because we are talking about real money and that money is connected to a name and an address and sooner or later the police will knock on your door or the door of the person that received the goods purchased with the stolen money or card. 3rd. "Firstly, using a hardware wallet (with offline backup) will make your Bitcoin almost invulnerable to 'hackers'": In a site like this dedicated to people that actually understand a bit about computer security. this sentence is just funny.
cesarb 10y ago
> I do not accept the concept of “trust”, I don’t know those guys, why should I trust them? On the other hand, with BTC trust is not even considered to be a factor. That is a strange argument. The value of Bitcoin comes from the trust people have on Bitcoin. If nobody trusts Bitcoin, it's worthless except as a mathematical curiosity. And after just a few more paragraphs, we see another instance of trust. The author describes leaving most of the money in a hardware wallet. That is, the author is trusting that the hardware is neither malicious nor buggy. A malicious hardware wallet could use kleptographic attacks to exfiltrate the private keys, or derive them from an attacker-controlled seed. A buggy hardware wallet could, for instance, have a "stuck" RNG (like a well-known OpenSSL fiasco), such that the generated private keys are predictable. The author is trusting people he doesn't know: the designers of the hardware wallet, the manufacturers of the hardware wallet (including workers at whichever factory manufactures the hardware), and even the postmen. Moreover, the author is not only trusting them to not be malicious, but also to not make mistakes (with crypto, even small mistakes can be deadly). And there's also at least one other problem the author didn't consider, or at least didn't mention: inheritance. If the author has an accident, what happens to the money? And what if the accident is not fatal, but leads to neurological sequels which render the author unable to access the hardware wallets?
- stickac 10y ago
  Author of TREZOR here. Responses inline: > have a "stuck" RNG TREZOR asks for external entropy during the initialization and this one is mixed with an internal one. Even in the unlikely change that internal RNG generator fails, you should be on the safe side. > The author is trusting people he doesn't know The whole design is (hardware and software) is open-source. You don't need to trust, you can verify yourself (or ask a friend who can if you are not able to). > inheritance When you initialize device it will give you a list of 24 words, which are a way how to recover funds. You can split these words across your family members (using e.g. a Shamir's Secret Sharing Scheme) and once you are dead your family can recover your coins. I recommend watching my talk at CCC where I explain in detail the basis concepts of TREZOR: https://www.youtube.com/watch?v=CgaBKNus1n0 https://www.youtube.com/watch?v=CgaBKNus1n0
  - 10y ago
pjc50 10y ago
What I don't understand is the extent to which people are paranoid about inflation in Europe or the US. It's low, stable, managed and not a problem unless you're keeping very large amounts of money in accounts which offer inadequate interest. It seems to me that worrying about this or the FDR gold-confiscation collapse of the gold standard is not merely fighting the last war but analagous to hiding in the jungle and refusing to admit that the war on inflation is over. Residents of e.g. Brazil and Argentina are entitled to a different opinion due to different history, but in those countries people sought hard currency .. the dollar.
- xiphias 10y ago
  When was the last time you tried to rent an apartment in a city (close to the jobs available)? I'm sure the official inflation rates are low, but when you're looking at real life of real people, they _need_ to move to a big city in a western country to have a normal life and rent a flat there (which is probably the biggest single cost of living).
  - jbmorgado 10y ago
    Seriously, are you trying to tell us that with bitcoin rents wouldn't go up? Are you trying to tell us that rent hikes are not a symptom of gentrification but of evil inflation?
    - xiphias 10y ago
      With Bitcoin cash wouldn't be so cheaply available to the selected few. Gentrification means that the demand for urban space is growing. The huge inflation in fiat supply means that more fiat can be spent on buying urban buildings and assets (and stopping urban development). The natural reaction way would be to build Skyscrapers in every city (and blend it somehow nicely with the cities)
  - pjc50 10y ago
    Yes .. although housing has traditionally been excluded from consumer inflation measures. There's an argument to be made that housing cost has gone up as a result of cheap credit (although arithmetically that should raise the sticker price while keeping the monthly payments the same), but it also appears to be due to capital inflow. This is the reverse side of the trade deficit with China.
cvucm 10y ago
Wow, it's interesting how divergent perspective can be. Just the other day I came to the conclusion bitcoin is a monitoring tool for the powerful to keep track of advances in digital security by incentivising implicit disclosure. If someone cracks integer factorization or tsp and thinks bitcoin would be a great way to make some dough on the discovery it will immediately set off red flags to anyone watching. If your typical nonce is found in a pool of many, but an individual suddenly starts solving blocks and banking 25btc, as of this writing, left and right you'll know straight off that individual has compromised the entire system. Putting a target on the poor rube's back and destroying any confidence in bitcoin as a currency. Perhaps this is unlikely but to put all of your trust in a system with such a huge potential to immediate failure terrifies me. Who is satoshi? Maybe a three letter acronym.
dang 10y ago
The title of this article ("Hacking Yourself Out of the Banking System and Live Only on BitCoins") reminds me of Colbert's "I am America and so can you". I expected to find title rage in the thread, but apparently grammarians sleep in. We gave it symmetrical gerunds. Edit: on second thought, "hacking yourself out of the banking system" is kind of baity and doesn't seem to add information, so we'll take that out.
- justifier 10y ago
  Which tense do you want to live in ? — I want to live in the imperative of the future passive participle— in the “what ought to be.” I feel like breathing that way. That’s what I like. There exists such a thing as mounted, bandit-band, equestrian honor. That’s why I like the fine Latin “gerundive”—that verb on horseback. Yes, the Latin genius, when it was young and greedy, created that form of imperative verbal traction as the prototype of our whole culture, and it was not the only thing that “ought to be” but the thing that “ought to be praised”—laudaturaest—the thing we like. . . . ..The Prose Of Osip Mandelstam
  - dang 10y ago
    Wow, you made my day. I love Mandelstam. I also know of a (small but consistent) linguistic practice in which people deliberately speak in gerunds as a form of verbal indirection, and it works surprisingly well.
    - logicallee 10y ago
      >linguistic practice in which people deliberately speak in gerunds as a form of verbal indirection ? could you give an example? (I can only think of sentences like "stealing is wrong" - but it doesn't seem like this is what you mean, because where's the indirection?)
      - dang 10y ago
        In certain forms of bodywork the practitioner will not say things like "breathe deeply" or "pay attention to x", but rather "breathing deeply" and "paying attention to x". I've not studied the origin of this (it may come from trance induction), but it does feel easier to absorb such instructions when they're not issued head-on.
etherael 10y ago
This is wrong. Fiat money is already constantly being significantly devalued. Whether you want to measure it by the rise in exchange value of cryptocurrencies (which, despite constant naysayers that simply don't get it, has been meteoric and constant for the past five years) or the increase in monetary base since the global financial crisis which has inefficiently papered over the structural problems and simply kicked the can down the road for an eventual sovereign debt crisis, or the ongoing global currency devaluation wars that all major fiat currencies are presently engaged in to remain internationally competitive. There is no valid interpretation of the data which yields the result "Fiat currencies are largely the same value that they were ten years ago". And having invested in cryptocurrencies from the start and quite heavily, I can assure you that I do not "have big problems" in light of this significant fiat devaluation. Quite the opposite, in fact. But, I get it, this is HN, and falsehoods about cryptocurrencies and worship of the state and its apparatus are par for the course. I should really be used to it by now but it just continues to boggle the mind that year after year this thing smacking everyone here in the face simply continues to be pushed aside and quietly ignored like it's some weird uncle that is soliciting donations for his satanic church congregation rather than the world changing innovation that it actually is.
- hueving 10y ago
  So what to you tell people that drank the kool-aid and bought heavily into bitcoin when it was around $1000/btc (to the moon!)? The devaluation they suffered in the period of a couple of months was much worse than what people have experienced with the USD over the last 20 years.
  - etherael 10y ago
    It's this kind of thing that makes me see just how ignorant people actually are about this subject. You have this neat little label you've put on the box and you've never actually done the necessary research to see if your label fits, you heard a headline somewhere, laughed about it and threw it in a mental sock drawer. Even at a casual glance, your statement is flatly wrong; the peak of the last BTC bubble was 2013-11-30, 1163 USD, a couple months later that bubble had deflated to 826.40 USD, a loss of just over 29%. In the last 20 years, the USD has lost 31.38% of its value, so no, a 29% is not "much worse" than a 31.38% It has rough parity, if we want to get pedantic about it, over the two periods you nominated, the USD actually technically did worse. But throwing aside that shallow criticism that you happen to be flatly wrong because the statement you made is technically incorrect, and instead focusing on how one would assuage the sense that one had made a bad investment purchasing at that particular point in time, I would say the same thing to them that I would have said to those that had bought at the peak of the bubble prior to that at 220 and then saw a price collapse to half before stabilisation, and then onwards to the only bubble price you're dimly aware of from your shallow knowledge. Or the same thing that I would have said to the people that bought at the peak of the bubble prior to that at 30, which then collapsed down below half before proceeding on to 220 and etc, and that is "That's how markets work, and if the trend follows and the next time it quadruples the previous high you will be the one talking about how you got in for a steal at 1163 to people who bought in near a peak of 5000 assuming the trend continues, and so on, and so forth". What I'll say to the person who is all in on fiat currencies over the next twenty years though, is that if everything goes according to plan, they will be subject to the exact same devaluation that the person in their situation was twenty years ago, and that's the optimistic projection. The pessimistic projection is a lot less rosy, and involves a massive sovereign debt bust and the collapse of fiat currencies and the corrupt world central banking apparatus, all expenses paid courtesy of your shallow, misplaced faith in the benighted institutions of the modern status quo.
lisper 10y ago
I spent five years fruitlessly trying to improve the current banking system (actually, the current money transfer system) so I am more intimately aware of its shortcomings than most people. Considering how many things are wrong with it, it's astonishing to me that it works at all. And yet, most of the time, it does. There are two things that make the current banking system robust: first, because anonymity is limited, most of the actors in the system are honest. Trying to pull a fast one is risky, and that prevents most people from trying. And second, there are humans in the loop that you can appeal to when things go wrong. Most of the time this keeps the system humming along despite the fact that under the hood it's all held together with spit and baling wire. Bitcoin is the exact opposite. Because it provides greater anonymity than the traditional banking system, it attracts dishonest actors. For example, bitcoin has made ransomware more economically viable than it was before. And second, if something goes wrong with a bitcoin transaction, you are totally hosed. Your bitcoin payment is only as safe as your ability to reliably bind a bitcoin address to an intended recipient. If you get it wrong, there's no recourse. If you accidentally send some bitcoin to the wrong address, you are hosed. If you lose your private key, you are hosed. Period, end of story. If I have to choose between bitcoin and traditional banking I'll take the latter simply because it's generally more robust and forgiving of everyday human foibles. But I'll continue to wish for (and work towards) a system that gives us the best of both worlds.
- knivets 10y ago
  Well, we could try to create infrastructure around bitcoin which would solve the problems related to human error, something like delegating sending/receiving to 3rd party which has nice UI and double checks everything. It could also store your private key. You might say that this 3rd party can be hacked -- true, but the same applies to traditional banking.
  - lisper 10y ago
    > we could try to create infrastructure around bitcoin which would solve the problems Of course you could try, but (I predict) you will fail. The problems I've cited are fundamental problems that are built in to the bitcoin protocol by design. You can't patch your way around them. For example: > which has nice UI and double checks everything How exactly are you going to "check everything"? Remember, you have to get it 100% correct. Failures are completely unacceptable because failures are completely unrecoverable.
Chirael 10y ago
While I appreciate the time it must have taken to write this article, the credibility of an article that recommends services and provides affiliate links in the recommendations is severely degraded in my opinion.
barnacs 10y ago
As long as you have to interface with "the fiat world" for income and spending, this sounds like more trouble than it's worth. The gateways (fiat->btc, btc->fiat) know your identity, take a higher fee than banks and you still have to trust them. Additionaly, you now have the risk of varying exchange rates at multiple points in your money flow. As for the global bitcoin adoption, I don't see this approach helping at all. If you think of yourself as a node in a global economy graph, you still take fiat as input and produce fiat as output.
hueving 10y ago
>373$ and 479$, which might seems a lot but if you move your BTC at the right time you’re not going to lose anything, on the contrary, compared to the fees you would normally pay for Bank transactions, chances are you’re going to spend way much less anyway. This is INSANE. Justifying monthly 30% swings in the value of your currency with "bank fees suck" is complete nonsense. Currency instability like that destroys economies because people lose the ability to budget and they become fearful. In the worst periods of inflation in the US, the currency never devalued by 30% in a month. That's Zimbabwe level crazy. Also, I pay precisely $0 a month in bank fees, as do many other Americans, so that argument would fall flat even if the swings were much smaller.
- cesarb 10y ago
  No, Zimbabwe was way crazier than that, approaching 100% per day (see the table at https://en.wikipedia.org/wiki/Hyperinflation#Most_severe_hyperinflations_in_world_history https://en.wikipedia.org/wiki/Hyperinflation#Most_severe_hyp...). I've lived through 30% a month inflation. See the table at http://hcinvestimentos.com/wp-content/uploads/2011/02/IPCA-Inflacao-Historica-Tabela.png http://hcinvestimentos.com/wp-content/uploads/2011/02/IPCA-I... (source: http://hcinvestimentos.com/2011/02/21/ipca-igpm-inflacao-historica/?hvid=NcSFP http://hcinvestimentos.com/2011/02/21/ipca-igpm-inflacao-his...). At this level, people can still cope, but it does generate some distortions. For instance, as soon as you received your monthly salary, you bought all the food you'd need for the whole month. If you can read Portuguese, I found an interesting article about it at http://www.bbc.com/portuguese/noticias/2014/06/140619_plano_real_vida_ru http://www.bbc.com/portuguese/noticias/2014/06/140619_plano_... .

182 points by evilsocket 10y ago

xfour 10y ago

Couldn't you just as easily for 90% of the problems you mention use cash?

evilsocket 10y ago
i pay my rent and bills with wire transfer, same goes for 99% of my purchases ( mostly on amazon ) ... my paycheck is sent me as wire transfer as well ... how am I supposed to live just on cash? :) I only use cash to buy cigarettes basically XD
- jbmorgado 10y ago
  If it all already works so fine with wire transfer for you then why should you use bitcoin anyway?
paavokoya 10y ago
Yeah but now you can do it on the internet. It's the best alternative for cash on the internet today.
matt_wulfeck 10y ago
Though I don't think they mentions it in the article, I get the author is suspicious that the government may also inflate the value of their money away -- which it actually is.
- XorNot 10y ago
  Ah yes, for all of the not noticeable unless you're a multi-millionaire heavily invested in US Treasury bonds effect that is having on him.

qaq 10y ago

"I do not accept their fees, they’re way too much high for the quality of service they give to you." So to fight this the author is paying Cashila.com/BitWage.com transaction fees and CryptoPay fees and takes on the exchange rate risk. "I do not accept the concept of “trust”" Right Cashila.com/BitWage.com are operated by magic trustworthy unicorns.

evilsocket 10y ago
The difference is that with those services, you can always close your account and switch to a new one ( that's why I've specified to avoid using them as your primary wallet ) ... on the other hand, if a Bank goes bankruptcy, it's not that easy to recover your money.
- jcater 10y ago
  In what country? Certainly not the US for FDIC insured accounts. My bank went under in 2009 and I never lost access to money.
  - tinkerrr 10y ago
    Did you have more than $250,000 in your account? If so, then you would have lost access to part of your money, or gotten if after a bankruptcy court hearing. Deposits are not the highest priority item on a bank's liability side of the balance sheet, and as a depositor, you'll likely not get paid in full.
    - giaour 10y ago
      That limit is per account, not per person. If you have more than $250K in an account, open a second one.
      - mikeash 10y ago
        Not so. The limit is per depositor, per bank, per ownership category: https://www.fdic.gov/deposit/deposits/ https://www.fdic.gov/deposit/deposits/ Ownership category is just something like single, joint, retirement, etc. If you have more than $250,000 spread across multiple accounts but with the same account holder and ownership category, the excess is not covered.

matt_wulfeck 10y ago

> I do not accept the concept of “trust”, I don’t know those guys, why should I trust them? On the other hand, with BTC trust is not even considered to be a factor. This is a strange argument to me. There's plenty of community credit unions around. For trust you can walk right in and speak to the manager. Some of them are older than dirt. However there's nothing really new in these fears (especially after 1929). The solution has always been to keep your money locked up in a safe. Pay for things in cash or cashiers check.

evilsocket 10y ago
unfortunately, at least for me, keeping everything in cash is not a viable solution
- fiatjaf 10y ago
  Why?
  - evilsocket 10y ago
    i pay my rent and bills with wire transfer, same goes for 99% of my purchases ( mostly on amazon ) ... my paycheck is sent me as wire transfer as well ... how am I supposed to live just on cash? :) I only use cash to buy cigarettes basically ... using only cash would make my life very, VERY, hard.
    - Karunamon 10y ago
      Aren't wire transfers incredibly expensive? (Something like upwards of $20 for the sender and the recipient?) That may just be an American thing though, countries with first world banking systems may have that sorted :)
      - evilsocket 10y ago
        not where I live

zer00eyz 10y ago

I up-voted this because it is an interesting guide in securing bitcoin. I think this is stupid in the extreme, and you SHOULD NOT do this ever. Bitcoin is super interesting as an asset vehicle, but I would not put all my eggs in that basket. For as much as I might not like the Fed and some of the monetary policy it makes, it still gets things done. Right now bitcoin can't seem to change the block size, it needs to, and a squabble could cause serious devaluation of the product as a whole. There is also the ticking time bomb of the satoshi coins. Right now one individual (or group) controls something like 6% of all the coins available, and on a whim, could cause a major devaluation over night. All this having been said would I consider buying and holding some bitcoin as very LIQUID asset, and cash equivalent. I sure would. How much would I put into it, no more than a few grand honestly, a sum I am willing to loose.

paavokoya 10y ago
>Right now one individual (or group) controls something like 6% of all the coins available, and on a whim, could cause a major devaluation over night. The Fed does this on an annual basis and actually publicly states when it's going to devalue the currency through QE and rate cuts.
- Frondo 10y ago
  The Fed, like all public institutions, is ultimately answerable to every voter. It's one of the benefits of citizenship, the decision-making power is in our hands. No, your one vote won't change everything to suit your personal preferences, and if you wanted to change the way some aspect of our system works (like money, or health care, or drug policy, or whatever) it'd be a lot of work, consensus-building, and time. But, at least the power is in our hands, collectively.
  - mixedCase 10y ago
    The Fed is not a public institution. It's a private bank. It's as Federal as Federal Express.

funkysquid 10y ago

Interesting idea, but it feels a bit like "how to use the stock market instead of a bank account". The author mentions fluctuations but seems to think bank fees would be more of an issue - but bank fees could be like $100 at most, where bitcoins could fluctuate all your cash by any percentage at all.

f_allwein 10y ago
I am also missing anything on the stability of Bitcoin over time. People in Europe, and especially Germany, are obsessed about that, given the experiences of hyperinflation in Germany in the 1920s, when it took 200 billion marks buy a loaf of bread: http://www.usagold.com/germannightmare.html http://www.usagold.com/germannightmare.html The Euro may not be perfect, but at least there are rules and institutions working to prevent this happening again.
- pointsphere 10y ago
  https://btcvol.info/ https://btcvol.info/ shows the volatility over the last few years. Still very wild, but looks like it is decreasing.

RubyPinch 10y ago

> but if you move your BTC at the right time you’re not going to lose anything does this include a larger desire to spend BTC (because of wanting a value store, for example) compared to USD?

known 10y ago

Does https://en.wikipedia.org/wiki/McDonald%27s https://en.wikipedia.org/wiki/McDonald%27s accept Bitcoin?

rtkwe 10y ago
Actually read the article the author uses CryptoPay which works essentially as a prepaid debit card and provides a normal card that you can use like one from a bank.

wslh 10y ago

I take this kind of articles with the same interest of how to live with $ 100 per month or some other [self or imposed] living with hard constraints: it is insightful but don't try it at home. Also, when you analyze the details you can discover that using https://cryptopay.me/bitcoin-debit-card https://cryptopay.me/bitcoin-debit-card takes extra commissions beyond bitcoins (loading fee 1%), so the magic of bitcoins fade a little bit.

jbmorgado 10y ago

...and see your money oscillate around 20% per day with the probability that you can loose it all by having it easily stolen by some hacker or having bitcoin value completely crash. There is this group of people that had higher education and are well versed in system security, they are called sys admins and even they get hacked some times... but here you are trying to convince us to put all our money into easily movable and untraceable bits in some bitcoin wallet claiming it it the safer option we have.

j15t 10y ago
> and see your money oscillate 20% per day I get that you're not a fan, but exaggerations don't enhance your argument. Over the last 60 days the XBT/USD pair has an average volatility of 1.23 % [1] which is obviously higher than most major currency pairs, but comparable to a many stock markets. That is, many people invest money in securities with similar or greater volatility profiles. > easily stolen by some hacker Whilst Bitcoin is obviously less user friendly than fiat currency, an experienced user like OP can make store their Bitcoin in a way that makes it much more difficult to steal than conventional payment systems. Firstly, using a hardware wallet (with offline backup) will make your Bitcoin almost invulnerable to 'hackers', plus the use of multi-sig can allow one to dial up physical security to very high levels. Compare that to conventional payment systems like a credit card - all your credentials are on your card! Anyone who handles your card (waiters, cashiers) gets access to all of your credentials, for the life of the card! (Bitcoin's use of public key cryptography is far more sane in my opinion). And any malware on your computer that could steal Bitcoin could also steal your CC information etc. The only reason that this isnt more of a problem is because by using a bank you are paying insurance for your money and the Bank will generally reimburse you for small amounts - this doesn't make the conventional payment system more secure, just more insured.
- j15t 10y ago
  [1] https://btcvol.info/ https://btcvol.info/
- jbmorgado 10y ago
  You tacitly disregarded the points that don't suit your narrative. 1st. It's not the average volatility that matters it's the maximum volatility that you can normally have. This year it only happen once to have 20% it's true. But you have plenty of days where it oscillates more than 5%. 2nd. Bitcoin is much easier to steal than conventional payment systems like reality tells us, not only because of it's lack of security but also because of accountability. It's hacker free reign, you just steal bitcoin and send it anywhere you want and you have no more trouble. In traditional payment systems this doesn't happen like you try to imply, not because it's insured but because we are talking about real money and that money is connected to a name and an address and sooner or later the police will knock on your door or the door of the person that received the goods purchased with the stolen money or card. 3rd. "Firstly, using a hardware wallet (with offline backup) will make your Bitcoin almost invulnerable to 'hackers'": In a site like this dedicated to people that actually understand a bit about computer security. this sentence is just funny.

cesarb 10y ago

> I do not accept the concept of “trust”, I don’t know those guys, why should I trust them? On the other hand, with BTC trust is not even considered to be a factor. That is a strange argument. The value of Bitcoin comes from the trust people have on Bitcoin. If nobody trusts Bitcoin, it's worthless except as a mathematical curiosity. And after just a few more paragraphs, we see another instance of trust. The author describes leaving most of the money in a hardware wallet. That is, the author is trusting that the hardware is neither malicious nor buggy. A malicious hardware wallet could use kleptographic attacks to exfiltrate the private keys, or derive them from an attacker-controlled seed. A buggy hardware wallet could, for instance, have a "stuck" RNG (like a well-known OpenSSL fiasco), such that the generated private keys are predictable. The author is trusting people he doesn't know: the designers of the hardware wallet, the manufacturers of the hardware wallet (including workers at whichever factory manufactures the hardware), and even the postmen. Moreover, the author is not only trusting them to not be malicious, but also to not make mistakes (with crypto, even small mistakes can be deadly). And there's also at least one other problem the author didn't consider, or at least didn't mention: inheritance. If the author has an accident, what happens to the money? And what if the accident is not fatal, but leads to neurological sequels which render the author unable to access the hardware wallets?

stickac 10y ago
Author of TREZOR here. Responses inline: > have a "stuck" RNG TREZOR asks for external entropy during the initialization and this one is mixed with an internal one. Even in the unlikely change that internal RNG generator fails, you should be on the safe side. > The author is trusting people he doesn't know The whole design is (hardware and software) is open-source. You don't need to trust, you can verify yourself (or ask a friend who can if you are not able to). > inheritance When you initialize device it will give you a list of 24 words, which are a way how to recover funds. You can split these words across your family members (using e.g. a Shamir's Secret Sharing Scheme) and once you are dead your family can recover your coins. I recommend watching my talk at CCC where I explain in detail the basis concepts of TREZOR: https://www.youtube.com/watch?v=CgaBKNus1n0 https://www.youtube.com/watch?v=CgaBKNus1n0
- 10y ago

pjc50 10y ago

What I don't understand is the extent to which people are paranoid about inflation in Europe or the US. It's low, stable, managed and not a problem unless you're keeping very large amounts of money in accounts which offer inadequate interest. It seems to me that worrying about this or the FDR gold-confiscation collapse of the gold standard is not merely fighting the last war but analagous to hiding in the jungle and refusing to admit that the war on inflation is over. Residents of e.g. Brazil and Argentina are entitled to a different opinion due to different history, but in those countries people sought hard currency .. the dollar.

xiphias 10y ago
When was the last time you tried to rent an apartment in a city (close to the jobs available)? I'm sure the official inflation rates are low, but when you're looking at real life of real people, they _need_ to move to a big city in a western country to have a normal life and rent a flat there (which is probably the biggest single cost of living).
- jbmorgado 10y ago
  Seriously, are you trying to tell us that with bitcoin rents wouldn't go up? Are you trying to tell us that rent hikes are not a symptom of gentrification but of evil inflation?
  - xiphias 10y ago
    With Bitcoin cash wouldn't be so cheaply available to the selected few. Gentrification means that the demand for urban space is growing. The huge inflation in fiat supply means that more fiat can be spent on buying urban buildings and assets (and stopping urban development). The natural reaction way would be to build Skyscrapers in every city (and blend it somehow nicely with the cities)
- pjc50 10y ago
  Yes .. although housing has traditionally been excluded from consumer inflation measures. There's an argument to be made that housing cost has gone up as a result of cheap credit (although arithmetically that should raise the sticker price while keeping the monthly payments the same), but it also appears to be due to capital inflow. This is the reverse side of the trade deficit with China.

cvucm 10y ago

Wow, it's interesting how divergent perspective can be. Just the other day I came to the conclusion bitcoin is a monitoring tool for the powerful to keep track of advances in digital security by incentivising implicit disclosure. If someone cracks integer factorization or tsp and thinks bitcoin would be a great way to make some dough on the discovery it will immediately set off red flags to anyone watching. If your typical nonce is found in a pool of many, but an individual suddenly starts solving blocks and banking 25btc, as of this writing, left and right you'll know straight off that individual has compromised the entire system. Putting a target on the poor rube's back and destroying any confidence in bitcoin as a currency. Perhaps this is unlikely but to put all of your trust in a system with such a huge potential to immediate failure terrifies me. Who is satoshi? Maybe a three letter acronym.

dang 10y ago

The title of this article ("Hacking Yourself Out of the Banking System and Live Only on BitCoins") reminds me of Colbert's "I am America and so can you". I expected to find title rage in the thread, but apparently grammarians sleep in. We gave it symmetrical gerunds. Edit: on second thought, "hacking yourself out of the banking system" is kind of baity and doesn't seem to add information, so we'll take that out.

justifier 10y ago
Which tense do you want to live in ? — I want to live in the imperative of the future passive participle— in the “what ought to be.” I feel like breathing that way. That’s what I like. There exists such a thing as mounted, bandit-band, equestrian honor. That’s why I like the fine Latin “gerundive”—that verb on horseback. Yes, the Latin genius, when it was young and greedy, created that form of imperative verbal traction as the prototype of our whole culture, and it was not the only thing that “ought to be” but the thing that “ought to be praised”—laudaturaest—the thing we like. . . . ..The Prose Of Osip Mandelstam
- dang 10y ago
  Wow, you made my day. I love Mandelstam. I also know of a (small but consistent) linguistic practice in which people deliberately speak in gerunds as a form of verbal indirection, and it works surprisingly well.
  - logicallee 10y ago
    >linguistic practice in which people deliberately speak in gerunds as a form of verbal indirection ? could you give an example? (I can only think of sentences like "stealing is wrong" - but it doesn't seem like this is what you mean, because where's the indirection?)
    - dang 10y ago
      In certain forms of bodywork the practitioner will not say things like "breathe deeply" or "pay attention to x", but rather "breathing deeply" and "paying attention to x". I've not studied the origin of this (it may come from trance induction), but it does feel easier to absorb such instructions when they're not issued head-on.

etherael 10y ago

This is wrong. Fiat money is already constantly being significantly devalued. Whether you want to measure it by the rise in exchange value of cryptocurrencies (which, despite constant naysayers that simply don't get it, has been meteoric and constant for the past five years) or the increase in monetary base since the global financial crisis which has inefficiently papered over the structural problems and simply kicked the can down the road for an eventual sovereign debt crisis, or the ongoing global currency devaluation wars that all major fiat currencies are presently engaged in to remain internationally competitive. There is no valid interpretation of the data which yields the result "Fiat currencies are largely the same value that they were ten years ago". And having invested in cryptocurrencies from the start and quite heavily, I can assure you that I do not "have big problems" in light of this significant fiat devaluation. Quite the opposite, in fact. But, I get it, this is HN, and falsehoods about cryptocurrencies and worship of the state and its apparatus are par for the course. I should really be used to it by now but it just continues to boggle the mind that year after year this thing smacking everyone here in the face simply continues to be pushed aside and quietly ignored like it's some weird uncle that is soliciting donations for his satanic church congregation rather than the world changing innovation that it actually is.

hueving 10y ago
So what to you tell people that drank the kool-aid and bought heavily into bitcoin when it was around $1000/btc (to the moon!)? The devaluation they suffered in the period of a couple of months was much worse than what people have experienced with the USD over the last 20 years.
- etherael 10y ago
  It's this kind of thing that makes me see just how ignorant people actually are about this subject. You have this neat little label you've put on the box and you've never actually done the necessary research to see if your label fits, you heard a headline somewhere, laughed about it and threw it in a mental sock drawer. Even at a casual glance, your statement is flatly wrong; the peak of the last BTC bubble was 2013-11-30, 1163 USD, a couple months later that bubble had deflated to 826.40 USD, a loss of just over 29%. In the last 20 years, the USD has lost 31.38% of its value, so no, a 29% is not "much worse" than a 31.38% It has rough parity, if we want to get pedantic about it, over the two periods you nominated, the USD actually technically did worse. But throwing aside that shallow criticism that you happen to be flatly wrong because the statement you made is technically incorrect, and instead focusing on how one would assuage the sense that one had made a bad investment purchasing at that particular point in time, I would say the same thing to them that I would have said to those that had bought at the peak of the bubble prior to that at 220 and then saw a price collapse to half before stabilisation, and then onwards to the only bubble price you're dimly aware of from your shallow knowledge. Or the same thing that I would have said to the people that bought at the peak of the bubble prior to that at 30, which then collapsed down below half before proceeding on to 220 and etc, and that is "That's how markets work, and if the trend follows and the next time it quadruples the previous high you will be the one talking about how you got in for a steal at 1163 to people who bought in near a peak of 5000 assuming the trend continues, and so on, and so forth". What I'll say to the person who is all in on fiat currencies over the next twenty years though, is that if everything goes according to plan, they will be subject to the exact same devaluation that the person in their situation was twenty years ago, and that's the optimistic projection. The pessimistic projection is a lot less rosy, and involves a massive sovereign debt bust and the collapse of fiat currencies and the corrupt world central banking apparatus, all expenses paid courtesy of your shallow, misplaced faith in the benighted institutions of the modern status quo.

lisper 10y ago

I spent five years fruitlessly trying to improve the current banking system (actually, the current money transfer system) so I am more intimately aware of its shortcomings than most people. Considering how many things are wrong with it, it's astonishing to me that it works at all. And yet, most of the time, it does. There are two things that make the current banking system robust: first, because anonymity is limited, most of the actors in the system are honest. Trying to pull a fast one is risky, and that prevents most people from trying. And second, there are humans in the loop that you can appeal to when things go wrong. Most of the time this keeps the system humming along despite the fact that under the hood it's all held together with spit and baling wire. Bitcoin is the exact opposite. Because it provides greater anonymity than the traditional banking system, it attracts dishonest actors. For example, bitcoin has made ransomware more economically viable than it was before. And second, if something goes wrong with a bitcoin transaction, you are totally hosed. Your bitcoin payment is only as safe as your ability to reliably bind a bitcoin address to an intended recipient. If you get it wrong, there's no recourse. If you accidentally send some bitcoin to the wrong address, you are hosed. If you lose your private key, you are hosed. Period, end of story. If I have to choose between bitcoin and traditional banking I'll take the latter simply because it's generally more robust and forgiving of everyday human foibles. But I'll continue to wish for (and work towards) a system that gives us the best of both worlds.

knivets 10y ago
Well, we could try to create infrastructure around bitcoin which would solve the problems related to human error, something like delegating sending/receiving to 3rd party which has nice UI and double checks everything. It could also store your private key. You might say that this 3rd party can be hacked -- true, but the same applies to traditional banking.
- lisper 10y ago
  > we could try to create infrastructure around bitcoin which would solve the problems Of course you could try, but (I predict) you will fail. The problems I've cited are fundamental problems that are built in to the bitcoin protocol by design. You can't patch your way around them. For example: > which has nice UI and double checks everything How exactly are you going to "check everything"? Remember, you have to get it 100% correct. Failures are completely unacceptable because failures are completely unrecoverable.

Chirael 10y ago

While I appreciate the time it must have taken to write this article, the credibility of an article that recommends services and provides affiliate links in the recommendations is severely degraded in my opinion.

barnacs 10y ago

As long as you have to interface with "the fiat world" for income and spending, this sounds like more trouble than it's worth. The gateways (fiat->btc, btc->fiat) know your identity, take a higher fee than banks and you still have to trust them. Additionaly, you now have the risk of varying exchange rates at multiple points in your money flow. As for the global bitcoin adoption, I don't see this approach helping at all. If you think of yourself as a node in a global economy graph, you still take fiat as input and produce fiat as output.

hueving 10y ago

>373$ and 479$, which might seems a lot but if you move your BTC at the right time you’re not going to lose anything, on the contrary, compared to the fees you would normally pay for Bank transactions, chances are you’re going to spend way much less anyway. This is INSANE. Justifying monthly 30% swings in the value of your currency with "bank fees suck" is complete nonsense. Currency instability like that destroys economies because people lose the ability to budget and they become fearful. In the worst periods of inflation in the US, the currency never devalued by 30% in a month. That's Zimbabwe level crazy. Also, I pay precisely $0 a month in bank fees, as do many other Americans, so that argument would fall flat even if the swings were much smaller.

cesarb 10y ago
No, Zimbabwe was way crazier than that, approaching 100% per day (see the table at https://en.wikipedia.org/wiki/Hyperinflation#Most_severe_hyperinflations_in_world_history https://en.wikipedia.org/wiki/Hyperinflation#Most_severe_hyp...). I've lived through 30% a month inflation. See the table at http://hcinvestimentos.com/wp-content/uploads/2011/02/IPCA-Inflacao-Historica-Tabela.png http://hcinvestimentos.com/wp-content/uploads/2011/02/IPCA-I... (source: http://hcinvestimentos.com/2011/02/21/ipca-igpm-inflacao-historica/?hvid=NcSFP http://hcinvestimentos.com/2011/02/21/ipca-igpm-inflacao-his...). At this level, people can still cope, but it does generate some distortions. For instance, as soon as you received your monthly salary, you bought all the food you'd need for the whole month. If you can read Portuguese, I found an interesting article about it at http://www.bbc.com/portuguese/noticias/2014/06/140619_plano_real_vida_ru http://www.bbc.com/portuguese/noticias/2014/06/140619_plano_... .