3 ms·

What about this is WTF? Please explain, in detail, how somebody with $10M in BTC should store it.

by blhack 9y ago

nostrademons 9y ago
I think the WTF is that the original point of cryptocurrency was that it was supposed to be decentralized, with no big institutions that you must trust. Coinbase Custody is essentially reinventing the exact institutions that bitcoin was supposed to cut out of the loop. You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a paper wallet; control of those $10M lies in access to a private key, so if you keep the key secret, nobody can access them (like with Satoshi's $40B or so in Bitcoin). That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of "trustless completely-distributed systems" should perhaps heed. This same dynamic comes up over and over again, from open-source to the Internet to P2P and now to cryptocurrency.
- FabHK 9y ago
  Very well put. It is sort of funny, isn't it. Bitcoin maximalist: "Bitcoin, no need to trust evil centralised institutions!" Actual Bitcoin users: "Oh, hey, could you take care of my Bitcoin balance for me, please? And you have password recovery, right?"
  - shanusmagnus 9y ago
    What I think is sort of funny is that you've just described two poles, but seemingly can't grasp the infinite gradient in between those poles where people with different risk tolerances and security requirements can exist.
    - ultraluminous 9y ago
      What he's describing is that the overwhelmingly vast majority of people (who are supposed to replace fiat with ctypto in the future) reside on one end of the pole. The end with all the real-life, non-ideologically-constrained usability.
      - shanusmagnus 9y ago
        This is akin to assuming that internet users are a bunch of neckbeards and grad students who like to muck about configuring routers, just because that was where it started. Who knows what will wind up being the dominant use case in the future, or who will be the dominant user population. Maybe the ones who drive early adoption, and who govern the philosophical and technical direction, will turn into a tiny faction of stakeholders in the end, but maybe they continue to dominate technical development because they are the best stewards of the idea. Or maybe they're overthrown and it turns into something else, run by small business owners. Or the governments of third world countries. The point is that nobody knows how it will shake out. Acting like the current state of things is somehow 'wrong' is arrogant and historically uninformed.
- Obi_Juan_Kenobi 9y ago
  Centralization offers many benefits that some people value. There is nothing whatsoever wrong with that. Bitcoin offers the choice and makes trusting a 3rd party completely optional. For some institutions, they already have legal departments and experience with valuable contracts, so this service presents nothing new. Securing the private keys of a cryptographic currency, however, is not something they have experience with. There is certainly some truth about reality vs. the cypherpunk vision, but I also think this is largely a strawman; many people in the Bitcoin community don't believe in overthrowing governments or that everyone will participate in completely decentralized systems. Bitcoin can still offer value alongside traditional financial markets and the legal authority of the state.
- blhack 9y ago
  I still don't see the detailed answers I'm looking for here. On a paper wallet? How do I generate that? How do I print it? Where should I store it? A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third. I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency. I, unlike many others, don't want to make a $fortune dollar bet that I'm not going to make any sort of mistake (one I could have none about or not) when doing all of this stuff. I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money. The AMAZING WORLDCHANGING but much less dramatic, incremental improvement that bitcoin offers me is that now I don't have to. That's a BIG deal. If my mom doesn't want to figure out what the hell an air gapped bootable Linux distro is, then coinbase is a fantastic solution for her.
  - nostrademons 9y ago
    Like I said, "That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of 'trustless completely-distributed systems' should perhaps heed." The people commenting in this sub-thread don't actually believe in the trustless utopia that initial Bitcoin aficionados did, we just have enough familiarity with the original Bitcoin technical paper to comment on the irony here. That may be why you're not seeing particularly compelling answers. "I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money." As someone with both a CoinBase account and a Vanguard account...your money is much, much safer in Vanguard. And that's the irony. When Bitcoin was distributed, people could at least point to the lack of a centralized institution as an advantage. Now that it has centralized institutions, they're inferior to the centralized institutions in the mainstream financial world. And I certainly hope your mom isn't putting $10M into bitcoin on CoinBase. Regardless of security issues, that's a very good way to lose $10M. (On second thought, yes, yes, she should absolutely put her life savings into Bitcoin, so I can take the other side of the trade and sell into this bubble. ;-))

What about this is WTF? Please explain, in detail, how somebody with $10M in BTC should store it.

by blhack 9y ago

What about this is WTF? Please explain, in detail, how somebody with $10M in BTC should store it.

I think the WTF is that the original point of cryptocurrency was that it was supposed to be decentralized, with no big institutions that you must trust. Coinbase Custody is essentially reinventing the exact institutions that bitcoin was supposed to cut out of the loop. You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a paper wallet; control of those $10M lies in access to a private key, so if you keep the key secret, nobody can access them (like with Satoshi's $40B or so in Bitcoin). That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of "trustless completely-distributed systems" should perhaps heed. This same dynamic comes up over and over again, from open-source to the Internet to P2P and now to cryptocurrency.

FabHK 9y ago
Very well put. It is sort of funny, isn't it. Bitcoin maximalist: "Bitcoin, no need to trust evil centralised institutions!" Actual Bitcoin users: "Oh, hey, could you take care of my Bitcoin balance for me, please? And you have password recovery, right?"
- shanusmagnus 9y ago
  What I think is sort of funny is that you've just described two poles, but seemingly can't grasp the infinite gradient in between those poles where people with different risk tolerances and security requirements can exist.
  - ultraluminous 9y ago
    What he's describing is that the overwhelmingly vast majority of people (who are supposed to replace fiat with ctypto in the future) reside on one end of the pole. The end with all the real-life, non-ideologically-constrained usability.
    - shanusmagnus 9y ago
      This is akin to assuming that internet users are a bunch of neckbeards and grad students who like to muck about configuring routers, just because that was where it started. Who knows what will wind up being the dominant use case in the future, or who will be the dominant user population. Maybe the ones who drive early adoption, and who govern the philosophical and technical direction, will turn into a tiny faction of stakeholders in the end, but maybe they continue to dominate technical development because they are the best stewards of the idea. Or maybe they're overthrown and it turns into something else, run by small business owners. Or the governments of third world countries. The point is that nobody knows how it will shake out. Acting like the current state of things is somehow 'wrong' is arrogant and historically uninformed.
Obi_Juan_Kenobi 9y ago
Centralization offers many benefits that some people value. There is nothing whatsoever wrong with that. Bitcoin offers the choice and makes trusting a 3rd party completely optional. For some institutions, they already have legal departments and experience with valuable contracts, so this service presents nothing new. Securing the private keys of a cryptographic currency, however, is not something they have experience with. There is certainly some truth about reality vs. the cypherpunk vision, but I also think this is largely a strawman; many people in the Bitcoin community don't believe in overthrowing governments or that everyone will participate in completely decentralized systems. Bitcoin can still offer value alongside traditional financial markets and the legal authority of the state.
blhack 9y ago
I still don't see the detailed answers I'm looking for here. On a paper wallet? How do I generate that? How do I print it? Where should I store it? A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third. I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency. I, unlike many others, don't want to make a $fortune dollar bet that I'm not going to make any sort of mistake (one I could have none about or not) when doing all of this stuff. I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money. The AMAZING WORLDCHANGING but much less dramatic, incremental improvement that bitcoin offers me is that now I don't have to. That's a BIG deal. If my mom doesn't want to figure out what the hell an air gapped bootable Linux distro is, then coinbase is a fantastic solution for her.
- nostrademons 9y ago
  Like I said, "That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of 'trustless completely-distributed systems' should perhaps heed." The people commenting in this sub-thread don't actually believe in the trustless utopia that initial Bitcoin aficionados did, we just have enough familiarity with the original Bitcoin technical paper to comment on the irony here. That may be why you're not seeing particularly compelling answers. "I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money." As someone with both a CoinBase account and a Vanguard account...your money is much, much safer in Vanguard. And that's the irony. When Bitcoin was distributed, people could at least point to the lack of a centralized institution as an advantage. Now that it has centralized institutions, they're inferior to the centralized institutions in the mainstream financial world. And I certainly hope your mom isn't putting $10M into bitcoin on CoinBase. Regardless of security issues, that's a very good way to lose $10M. (On second thought, yes, yes, she should absolutely put her life savings into Bitcoin, so I can take the other side of the trade and sell into this bubble. ;-))