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The capability of self-custody is the thing to pay attention to. Nothing else has this capability to the same extent. Today we store most of our wealth in ass

The capability of self-custody is the thing to pay attention to. Nothing else has this capability to the same extent. Today we store most of our wealth in assets (market index funds, stocks, real estate, etc.) and some (typically very little, and rarely outside of a bank account) in cash. Most of this is not actually controlled by you. With BTC (and cryptocurrency more generally) you have the capability of having your private key in a hardware wallet under your control and retain the capability to transact independently of other institutions. If you keep some percentage of your wealth here you retain certain advantages that you can't get elsewhere. The closest alternative would be having cash (in cash form), but it's hard to have that much, hard to travel with it (you can memorize your wallet seed words and recreate your wallet on the other side of a border), and cash is vulnerable to government stupidity (see: Russia). I'm not sympathetic to the Canadian truck protests, but whether or not you care about what they're protesting - it's the capability wielded by the Canadian government over their private finances that's alarming. All this is to say the focus on middleman and paying with crypto in the general case is kind of missing the forest for the trees. The capability of a global self-custody capable store of value that can be trivially moved anywhere is a big deal and puts power back in the hands of individuals.

pphysch 5y ago
It's funny because some Bitcoin evangelists point to the US govt's 1933 confiscation of a gold as a reason to use Bitcoin instead. ... How is nabbing a gold ingot and different than nabbing a storage device? If anything, the threat surface of a digital wallet is much greater (you could steal it remotely if the user doesn't have good cybersecurity practices, unlike a gold ingot).
- gonehome 5y ago
  The storage device doesn't matter - it's the seed words that generate the wallet that matter. If you memorize them you're good (short of someone beating it out of you or legally compelling you - even then they'd have to be able to prove it existed in the first place). You can trivially prove your gold ingot exists because you can just find it. It's also way harder to move your gold ingot out of your war-torn country, harder to transact with it, etc. The storage device does not hold the actual coins, just a private key that lets you update the public ledger that determines ownership (thinking the storage device holds the coins is a common misunderstanding). I'm an open-minded skeptic, but there are real technology advantages to blockchain and cryptocurrency, there are a lot of scams too for sure - but that's not the interesting part. The HN median opinion on this is wrong as it often is (it was wrong about EVs and Tesla too).
  - pphysch 5y ago
    You can also bury your ingots/drives deep in the wilderness and only memorize where they are at
    - gonehome 5y ago
      Obviously that is not as easy/useful/realistic as a wallet you can generate from memorized seed words to instantly recover your wealth anywhere.
      - lottin 5y ago
        How does that protect you from someone who can seize your device? If they can seize your device they can also seize any physical assets that you possess. So your wealth exists only nominally, you can't really spend it.
        gonehome 5y ago
        The device holds a private key that can be regenerated from 12 seed words. The device itself doesn't really matter if you know these 12 words. The key is what lets you update ownership information on the public block chain. The wallet doesn't hold any coins on the device, just a key that let's you update the chain of public ownership. For example: - You live in Russia and see the writing on the wall for invasion and currency collapse - Prior to the invasion you move 90% of your wealth into a BTC wallet. - The invasion happens and the currency collapses. - You want to escape the country, but the border exits are guarded by corrupt guards that will steal any money/valuables you try to cross with. - You memorize the 12 seed words of your wallet and cross the border with nothing. - On the other side you recreate your wallet and restore access to your wealth in a safe country. This isn't just a hypothetical, this kind of thing has already happened: https://news.ycombinator.com/item?id=29518181 https://news.ycombinator.com/item?id=29518181
        Dylan16807 5y ago
        So a key step in there is finding someone that's willing to take your local currency in exchange for a not-local asset that you can access later. Would it be very different if that asset was Euros? Or ownership of gold that's stored in Chile? If you need any documents you can store them in a secret passworded account.
JaimeThompson 5y ago
You can currently take physical possession of commodities including all the precious medals, one doesn't have to allow their stock certs to be help by others, cash and other such methods still work but most people chose to let middlemen do it for them, just like most people do for Crypto judging by the market valuations of some of those companies.
- gonehome 5y ago
  You're right of course, but it's way riskier to take physical possession of commodities and it's harder to move them. These are things crypto is better at. For cash, the advantage is that crypto is independent of government action and global. The crash of the Russian currency is an example of why this is important. Crypto is obviously more volatile than USD, so there's a tradeoff depending on the government backed currency's stability. It's also harder to move similar amounts of wealth in cash or commodities (you could have self custody of a wallet with a billion dollars in it, can't really move a billion dollars in cash or gold). These advantages are real and people are relying on them: https://news.ycombinator.com/item?id=29518181 https://news.ycombinator.com/item?id=29518181
  - JaimeThompson 5y ago
    As are the disadvantages as evidenced by all the ransoms paid in crypto, these ransoms are also evidence that the security required to keep your crypto secure isn't exactly all that common in some of the market segments the crytpo companies are trying to reach.
    - gonehome 5y ago
      I don't disagree with you and I don't pretend there are no risks with cryptocurrency. The security requirements are obviously harder, the UX is bad and even technical users fuck it up. Some of this will be improved by tooling, some of it is just what's required for self-custody. Still, the capability it provides is new and gives individuals more power even with these tradeoffs. That capability is valuable and shouldn't be dismissed imo. It's a lever against authoritarian control and increasing centralization of power.

pphysch 5y ago

It's funny because some Bitcoin evangelists point to the US govt's 1933 confiscation of a gold as a reason to use Bitcoin instead. ... How is nabbing a gold ingot and different than nabbing a storage device? If anything, the threat surface of a digital wallet is much greater (you could steal it remotely if the user doesn't have good cybersecurity practices, unlike a gold ingot).

gonehome 5y ago
The storage device doesn't matter - it's the seed words that generate the wallet that matter. If you memorize them you're good (short of someone beating it out of you or legally compelling you - even then they'd have to be able to prove it existed in the first place). You can trivially prove your gold ingot exists because you can just find it. It's also way harder to move your gold ingot out of your war-torn country, harder to transact with it, etc. The storage device does not hold the actual coins, just a private key that lets you update the public ledger that determines ownership (thinking the storage device holds the coins is a common misunderstanding). I'm an open-minded skeptic, but there are real technology advantages to blockchain and cryptocurrency, there are a lot of scams too for sure - but that's not the interesting part. The HN median opinion on this is wrong as it often is (it was wrong about EVs and Tesla too).
- pphysch 5y ago
  You can also bury your ingots/drives deep in the wilderness and only memorize where they are at
  - gonehome 5y ago
    Obviously that is not as easy/useful/realistic as a wallet you can generate from memorized seed words to instantly recover your wealth anywhere.
    - lottin 5y ago
      How does that protect you from someone who can seize your device? If they can seize your device they can also seize any physical assets that you possess. So your wealth exists only nominally, you can't really spend it.
      - gonehome 5y ago
        The device holds a private key that can be regenerated from 12 seed words. The device itself doesn't really matter if you know these 12 words. The key is what lets you update ownership information on the public block chain. The wallet doesn't hold any coins on the device, just a key that let's you update the chain of public ownership. For example: - You live in Russia and see the writing on the wall for invasion and currency collapse - Prior to the invasion you move 90% of your wealth into a BTC wallet. - The invasion happens and the currency collapses. - You want to escape the country, but the border exits are guarded by corrupt guards that will steal any money/valuables you try to cross with. - You memorize the 12 seed words of your wallet and cross the border with nothing. - On the other side you recreate your wallet and restore access to your wealth in a safe country. This isn't just a hypothetical, this kind of thing has already happened: https://news.ycombinator.com/item?id=29518181 https://news.ycombinator.com/item?id=29518181
        Dylan16807 5y ago
        So a key step in there is finding someone that's willing to take your local currency in exchange for a not-local asset that you can access later. Would it be very different if that asset was Euros? Or ownership of gold that's stored in Chile? If you need any documents you can store them in a secret passworded account.

JaimeThompson 5y ago

You can currently take physical possession of commodities including all the precious medals, one doesn't have to allow their stock certs to be help by others, cash and other such methods still work but most people chose to let middlemen do it for them, just like most people do for Crypto judging by the market valuations of some of those companies.

gonehome 5y ago
You're right of course, but it's way riskier to take physical possession of commodities and it's harder to move them. These are things crypto is better at. For cash, the advantage is that crypto is independent of government action and global. The crash of the Russian currency is an example of why this is important. Crypto is obviously more volatile than USD, so there's a tradeoff depending on the government backed currency's stability. It's also harder to move similar amounts of wealth in cash or commodities (you could have self custody of a wallet with a billion dollars in it, can't really move a billion dollars in cash or gold). These advantages are real and people are relying on them: https://news.ycombinator.com/item?id=29518181 https://news.ycombinator.com/item?id=29518181
- JaimeThompson 5y ago
  As are the disadvantages as evidenced by all the ransoms paid in crypto, these ransoms are also evidence that the security required to keep your crypto secure isn't exactly all that common in some of the market segments the crytpo companies are trying to reach.
  - gonehome 5y ago
    I don't disagree with you and I don't pretend there are no risks with cryptocurrency. The security requirements are obviously harder, the UX is bad and even technical users fuck it up. Some of this will be improved by tooling, some of it is just what's required for self-custody. Still, the capability it provides is new and gives individuals more power even with these tradeoffs. That capability is valuable and shouldn't be dismissed imo. It's a lever against authoritarian control and increasing centralization of power.