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This happens with all sorts of money held in Trust. It's not unusual to see lawyers steal from trust funds, Trustees steal from trust funds, CEOs buy strippers
by vivekd 9y ago
This happens with all sorts of money held in Trust. It's not unusual to see lawyers steal from trust funds, Trustees steal from trust funds, CEOs buy strippers and drugs with investor funds. We like to pretend we live in a world were people are honest and rational, and that's why people are so willing to put money into trust. But we don't live in that world, and trust should be about just that - do you trust this individual to hold that money. We pretend there is some legal regulatory system to prevent people stealing trust money but there isn't, all the legal system can do is punish people after the fact. And as evidenced by the existence and popularity of criminal courts and prisons, future punishment is often not a good deterrent for present bad behavior.
Now if it's someone like my bank I do trust them, because they have been around for a long time and have never stolen from their customers. If it's some guy on reddit with "wow such business" working with dogecoin, I think I would be a little more reluctant to trust.
- fixermark 9y agoIn general, one also trust's one's bank (in the US at least) because it's an FDIC-insured institution; the government promises that it will use control of fiat currency to make you whole if the bank fails. That guarantee hasn't always existed, and the Great Depression was partially exacerbated by the problem that in the event of a savings bank failure, there was no institution to make creditors whole. As far as I am aware, the BTC ecosystem has no such guarantee anywhere within it, which makes it not as safe a place for stored wealth as a US bank (assuming you trust the US economy to not implode over your lifetime, of course... Current track record suggests you should trust it more than the BTC economy ;) ).