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This has always been my #1 reason I'll never get into crypto. My bank has insurance, my physical assets aren't accessible to people on the internet. I likely wo

by scoofy 5y ago

This has always been my #1 reason I'll never get into crypto. My bank has insurance, my physical assets aren't accessible to people on the internet. I likely won't lose my entire life savings simply because I either forget my password or I use one, single, vulnerable device, ever. (Yes, I fully realize you crypto-millionaires took a small risk and won big, and kudos to you) The benefit of institutions is that they are able to plan for failure within their system. Yes, this comes with some costs attached, but the costs associated with decentralized and nearly unregulateable commodity markets have not even begun to surface.

thebean11 5y ago
If you can lose your currency by forgetting a password or using the wrong device then you set things up incorrectly IMO. There are good ways of doing things where your keys stay on a device, or are only exposed to an offline machine with no network or persistent storage. Obviously it gets a little more technical, that's why services that manage the keys for you are so popular.
- minsc__and__boo 5y ago
  >then you set things up incorrectly IMO That's precisely the problem with crypto though - most problems get blamed on the user, and not highlighted as the deficit it is for the crypto.
  - thebean11 5y ago
    It's not a deficit because everyday users can use a service that handles private keys for them. Managing private keys and signing transactions is not the level of the tech stack that nontechnical folks were ever meant to be on. It's like complaining that REST APIs aren't user friendly. My point is for someone who understand how keys work a bit better (like a lot of people here) there are better ways to set things up.
    - athrun 5y ago
      If you use a service that handles your private keys and the service gets compromised, then your funds are gone, permanently. This is a very different risk proposition compared to trusting a bank. If the bank gets compromised, it's the bank's problem, not mine.
      - lottin 5y ago
        Yes, the crypto people got a lot of things wrong. One is the idea that you have to trust banks. You don't. There's a whole system in place that protects us from banks, or anybody else, behaving badly. It's called 'civilisation'.
        hoseja 5y ago
        I'm afraid you've been led to believe the wrong way of who "civilisation" protects from whom.
        lottin 5y ago
        You think society was invented by banks to protect themselves from the ordinary man?
      - toolz 5y ago
        Do you think bank insurance is free? You seem to think crypto can't have insurance or maybe that it'll be costly while ignoring that bank insurance is something you are paying for. It's not free and the bank isn't doing you a favor.
      - thebean11 5y ago
        Sure that's the point. Individuals can make a judgement call over who they think is least likely to lose their keys, themselves or Coinbase. Many of those crypto "banks" are insured.
toolz 5y ago
and how many people have had money locked up by the very institutions that exist to protect those assets? I trust me _way_ more than I trust nameless corporations.
wyck 5y ago
Are you not aware of cold storage? Do you think people store millions on their laptops? Smart people use traditional means to store their crypto, literally paper in banks, custodians with insurance, actual vaults, etc, etc.
- Max_aaa 5y ago
  Cold storage just means that you key is kept offline, but the whole system is on the internet. The central part of crypto is the blockchain, which holds all your assets. So if someone is able to guess your key, or just happen to find it, or if the encryption has been defeated by a leap in computing or algorithms, they will have access to your crypto without needing to access your key.
  - wyck 5y ago
    First off no one is guessing your key, do the math, it's ridiculously impossible. Secondly if someone finds your key that's your problem, its the same as any real life key, it's not magic. 3rdly no leap in computing, even quantum is going to change the fact that no one is guessing your keys. And bitcoin does not require the internet, it only needs to communicate with other nodes, there is even a blockstream satellite you can use right now without internet access. This level is technical ignorance is pretty astounding.
- lottin 5y ago
  Wouldn't these "traditional means" defeat the whole purpose of "crypto", which is to avoid reliance on a trusted third-party?
  - nfin 5y ago
    you can use shamir secret sharing or other similar stuff (like multisignature wallets), so that you need m of n keys. Thus someone accessing some of your keys would not help them at all (and other things can be helpful lile time locks in combination with other features)
  - toolz 5y ago
imroot 5y ago
You've never had a bank take your checking account assets and freeze them on a payday because they suspected "Fraud." The bank is Judge, Jury, and Executioner -- and I'm still fighting with US Bank, over a year later, to get the 40K that they have of mine, but, I'm honestly at the point where I don't think I'll ever see that cash again.

by scoofy 5y ago

thebean11 5y ago

If you can lose your currency by forgetting a password or using the wrong device then you set things up incorrectly IMO. There are good ways of doing things where your keys stay on a device, or are only exposed to an offline machine with no network or persistent storage. Obviously it gets a little more technical, that's why services that manage the keys for you are so popular.

minsc__and__boo 5y ago
>then you set things up incorrectly IMO That's precisely the problem with crypto though - most problems get blamed on the user, and not highlighted as the deficit it is for the crypto.
- thebean11 5y ago
  It's not a deficit because everyday users can use a service that handles private keys for them. Managing private keys and signing transactions is not the level of the tech stack that nontechnical folks were ever meant to be on. It's like complaining that REST APIs aren't user friendly. My point is for someone who understand how keys work a bit better (like a lot of people here) there are better ways to set things up.
  - athrun 5y ago
    If you use a service that handles your private keys and the service gets compromised, then your funds are gone, permanently. This is a very different risk proposition compared to trusting a bank. If the bank gets compromised, it's the bank's problem, not mine.
    - lottin 5y ago
      Yes, the crypto people got a lot of things wrong. One is the idea that you have to trust banks. You don't. There's a whole system in place that protects us from banks, or anybody else, behaving badly. It's called 'civilisation'.
      - hoseja 5y ago
        I'm afraid you've been led to believe the wrong way of who "civilisation" protects from whom.
        lottin 5y ago
        You think society was invented by banks to protect themselves from the ordinary man?
    - toolz 5y ago
      Do you think bank insurance is free? You seem to think crypto can't have insurance or maybe that it'll be costly while ignoring that bank insurance is something you are paying for. It's not free and the bank isn't doing you a favor.
    - thebean11 5y ago
      Sure that's the point. Individuals can make a judgement call over who they think is least likely to lose their keys, themselves or Coinbase. Many of those crypto "banks" are insured.

toolz 5y ago

and how many people have had money locked up by the very institutions that exist to protect those assets? I trust me _way_ more than I trust nameless corporations.

wyck 5y ago

Are you not aware of cold storage? Do you think people store millions on their laptops? Smart people use traditional means to store their crypto, literally paper in banks, custodians with insurance, actual vaults, etc, etc.

Max_aaa 5y ago
Cold storage just means that you key is kept offline, but the whole system is on the internet. The central part of crypto is the blockchain, which holds all your assets. So if someone is able to guess your key, or just happen to find it, or if the encryption has been defeated by a leap in computing or algorithms, they will have access to your crypto without needing to access your key.
- wyck 5y ago
  First off no one is guessing your key, do the math, it's ridiculously impossible. Secondly if someone finds your key that's your problem, its the same as any real life key, it's not magic. 3rdly no leap in computing, even quantum is going to change the fact that no one is guessing your keys. And bitcoin does not require the internet, it only needs to communicate with other nodes, there is even a blockstream satellite you can use right now without internet access. This level is technical ignorance is pretty astounding.
lottin 5y ago
Wouldn't these "traditional means" defeat the whole purpose of "crypto", which is to avoid reliance on a trusted third-party?
- nfin 5y ago
  you can use shamir secret sharing or other similar stuff (like multisignature wallets), so that you need m of n keys. Thus someone accessing some of your keys would not help them at all (and other things can be helpful lile time locks in combination with other features)
- toolz 5y ago

imroot 5y ago

You've never had a bank take your checking account assets and freeze them on a payday because they suspected "Fraud." The bank is Judge, Jury, and Executioner -- and I'm still fighting with US Bank, over a year later, to get the 40K that they have of mine, but, I'm honestly at the point where I don't think I'll ever see that cash again.