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There is no mandate in Bitcoin to 'be your own bank' - its just an option. It is a feature and a very good one for people who are afraid of government intrusion

There is no mandate in Bitcoin to 'be your own bank' - its just an option. It is a feature and a very good one for people who are afraid of government intrusion into how they use their money. If you don't care about this "feature" you can turn it off by putting your crypto in Coinbase or other exchanges where it will be insured.

RcouF1uZ4gsC 6y ago
This feature is the whole point of Bitcoin and blockchain in general. If we just wanted to be able to have balances in banks, the current banking system does it far cheaper with a lot more legal protections.
mcv 6y ago
The problem with such a new, unproven, and completely unregulated system, many alternatives to 'be your own bank' are also not good options. Plenty of exchanges have lost a lot of people's money. It's hard to tell which wallet or exchange is reliable and which isn't. Instead of trusting a system that's tightly regulated in order to protect people's money, you're expected to trust a system that's completely unregulated, that's filled with crooks and cowboys and idiots who keep creatively or accidentally figuring out new ways to lose your money. It's a good example of why regulation is necessary in banking.
- BTCOG 6y ago
  I would have to disagree on both main points; BTC is nearing 12 years old and time tested. BTC also proves that no regulation at all is necessary. It also proves that even folks who think they're technically literate, are hardly capable of making proper backups and or properly using Bitcoin. It's too sophisticated for most. You shouldn't keep multiple bitcoin in one private key. There is no reason at all Bitcoin should have KYC or regulation. It exists outside the government monetary systems and it is your risk you take to use it. Crying about using it because it's risky just means you shouldn't be using it.
  - mcv 6y ago
    12 years is a lot in the world of tech, but absolutely nothing in the world of banking. Or banking system and its regulatory systems have evolved over centuries. And frankly, I'm not sure what bitcoin has actually proven in those 12 years; it's barely being used for any kind of serious commerce. It's mostly a speculation rollercoaster that goes up and down based on whether people expect it may or may not prove itself eventually. People constantly losing bitcoin like this, or through exchanges falling over, is terrible for trust in bitcoin. Banking regulation exists exactly to prevent this kind of thing. At the end of the day, people trust their government a lot more than they trust a bunch cowboys. It may be cool, but it's no basis for a financial system.
nyghtly 6y ago
> Satoshi Nakamoto stated in his white paper that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." https://en.wikipedia.org/wiki/Bitcoin https://en.wikipedia.org/wiki/Bitcoin It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured. Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.
- fluffything 6y ago
  Bitcoin does not provide a trust-less alternative, at best, it requires you to trust yourself. The internet is full of people that have lost their wallets due to hardware failures and no backups, scams, phishing, ...
- deleted 6y ago
  [deleted]
stnmtn 6y ago
Was Mt Gox insured? Why should I trust anything after that?
- knorker 6y ago
  Haha. That's funny. That's like asking if the neighborhood gang member is FDIC insured before they come ask you to "invest".
loopz 6y ago
Users may use one of the many wallets that suddenly vanishes, along with the bits. Neither online or offline is very secure, from bitrot, hackers and viruses. So no.
BTCOG 6y ago
This is untrue. The entire design of Bitcoin was never to have exchanges, to entirely be your own money's keeper. You would have to actually read the whitepaper, have talked to Satoshi and Hal Finney and paid attention to it's purpose. What you said was an opinion. Not your code/node instance, not your keys, not your money. Bitcoin was not designed to custody your money to a bank, it was designed __against__ doing just that. It is very unfortunate when something like this happens but it's very foolish to have more than 1-2 BTC in one privatekey. This guy should've gone through the painstaking process of putting one BTC, or even less, into 1400 privatekeys and new cold wallets.
tim333 6y ago
>all digital currency that Coinbase holds online is insured. ... >Coinbase holds less than 2% of customer funds online So you're not really insured against some human getting the offline key https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured https://help.coinbase.com/en/coinbase/other-topics/legal-pol...

RcouF1uZ4gsC 6y ago

This feature is the whole point of Bitcoin and blockchain in general. If we just wanted to be able to have balances in banks, the current banking system does it far cheaper with a lot more legal protections.

mcv 6y ago

The problem with such a new, unproven, and completely unregulated system, many alternatives to 'be your own bank' are also not good options. Plenty of exchanges have lost a lot of people's money. It's hard to tell which wallet or exchange is reliable and which isn't. Instead of trusting a system that's tightly regulated in order to protect people's money, you're expected to trust a system that's completely unregulated, that's filled with crooks and cowboys and idiots who keep creatively or accidentally figuring out new ways to lose your money. It's a good example of why regulation is necessary in banking.

BTCOG 6y ago
I would have to disagree on both main points; BTC is nearing 12 years old and time tested. BTC also proves that no regulation at all is necessary. It also proves that even folks who think they're technically literate, are hardly capable of making proper backups and or properly using Bitcoin. It's too sophisticated for most. You shouldn't keep multiple bitcoin in one private key. There is no reason at all Bitcoin should have KYC or regulation. It exists outside the government monetary systems and it is your risk you take to use it. Crying about using it because it's risky just means you shouldn't be using it.
- mcv 6y ago
  12 years is a lot in the world of tech, but absolutely nothing in the world of banking. Or banking system and its regulatory systems have evolved over centuries. And frankly, I'm not sure what bitcoin has actually proven in those 12 years; it's barely being used for any kind of serious commerce. It's mostly a speculation rollercoaster that goes up and down based on whether people expect it may or may not prove itself eventually. People constantly losing bitcoin like this, or through exchanges falling over, is terrible for trust in bitcoin. Banking regulation exists exactly to prevent this kind of thing. At the end of the day, people trust their government a lot more than they trust a bunch cowboys. It may be cool, but it's no basis for a financial system.

nyghtly 6y ago

> Satoshi Nakamoto stated in his white paper that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." https://en.wikipedia.org/wiki/Bitcoin https://en.wikipedia.org/wiki/Bitcoin It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured. Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.

fluffything 6y ago
Bitcoin does not provide a trust-less alternative, at best, it requires you to trust yourself. The internet is full of people that have lost their wallets due to hardware failures and no backups, scams, phishing, ...
deleted 6y ago
[deleted]

stnmtn 6y ago

Was Mt Gox insured? Why should I trust anything after that?

knorker 6y ago
Haha. That's funny. That's like asking if the neighborhood gang member is FDIC insured before they come ask you to "invest".

loopz 6y ago

Users may use one of the many wallets that suddenly vanishes, along with the bits. Neither online or offline is very secure, from bitrot, hackers and viruses. So no.

BTCOG 6y ago

This is untrue. The entire design of Bitcoin was never to have exchanges, to entirely be your own money's keeper. You would have to actually read the whitepaper, have talked to Satoshi and Hal Finney and paid attention to it's purpose. What you said was an opinion. Not your code/node instance, not your keys, not your money. Bitcoin was not designed to custody your money to a bank, it was designed __against__ doing just that. It is very unfortunate when something like this happens but it's very foolish to have more than 1-2 BTC in one privatekey. This guy should've gone through the painstaking process of putting one BTC, or even less, into 1400 privatekeys and new cold wallets.

tim333 6y ago

>all digital currency that Coinbase holds online is insured. ... >Coinbase holds less than 2% of customer funds online So you're not really insured against some human getting the offline key https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured https://help.coinbase.com/en/coinbase/other-topics/legal-pol...