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Why is uncensorable money worth the risk of permanently losing your money because you forgot a password or lost a thumb drive?

game_the0ry 5y ago
Trade offs - bitcoin is not a free lunch. If you want to be fully sovereign with your wealth, you have to accept full responsibility of that wealth. If that is not a responsibility you want bc you believe it is too risky, then do not buy bitcoin. Or, you can trust centralized authority (a bank) with that responsibility; obviously, the trade off is you lose full control of your wealth. Additionally, how you approach ownership of your wealth is not binary. Nothing is stopping you from putting some proportion of each in either bank or bitcoin.
- enkid 5y ago
  What does being fully sovereign mean for something that's only used as a medium of exchange? It's value is always only meaningful when at least two people agree on it's value. At best you only control half of the equation.
  - smeej 5y ago
    The comparison isn't reasonably between "sovereign control of your wealth" and "in total control of what everyone else values." That doesn't even make sense. The question worth asking is about how controlling your own wealth, but having to trust the value of it to a giant swath of people over which no one entity has any significant control, compares to not having any control of your own wealth, AND having the value of any wealth you do have dependent entirely on the will of some unelected bureaucrat.
  - game_the0ry 5y ago
    > It's value is always only meaningful when at least two people agree on it's value. Is it not totally obvious that bitcoin has market value? If not, consider these points - bitcoin was not created by MIT and Uchicago STEM and econ PhDs, it was born out of an anonymous internet "white paper." It proved itself as a type of "money" in the internet dark markets, and continues to do so. It wasn't "lab tested," it was tested in the real world. When China banned crypto, the price of bitcoin did not crash. Only authoritarian countries have banned it, while some US lawmakers hold bitcoin and Gensler (chairmen of the SEC) taught a class at MIT about crypto. These should be very compelling aspects of bitcoin.
    - Spooky23 5y ago
      > bitcoin was not created by MIT and Uchicago STEM and econ PhDs How do you know?
      - game_the0ry 5y ago
        Bc there is no way academics would not take credit for it. That's like expecting a fish not to swim.
    - ineedasername 5y ago
      What about the sovereign part? No one has total power over their money because its utility is always based in another's willingness to participate in the transaction. If bitcoin existed before the Civil Rights movement in the US, it would not have helped people of color spend their money in "whites only" establishments or buy houses in white neighborhoods when (prior to 1948) a covenant could legally exclude a person of color from owning certain homes. And after 1948 the legal system could still be weaponized against such purchases, or if all else failed the buyer harassed or worse. These are more extreme examples, but that sort of thing does still go on in places both in the US and elsewhere. Bitcoin or other crypto fall short of solving monetary censorship. Separately, why does it matter where bitcoin was created? (especially given that we really don't know who created it anyway).
    - enkid 5y ago
      Market value is having someone else have control over the value of what you control. Market value may not be centralized, but it is the definition of something you do not control. This is my point. You cannot have full control over something that's value is dictated by an external entity, the entity being the market in this case. The concept of having "full sovereignty" over something that you don't control the value of, and the only purpose is to exchange for something of value, is non-sensical.
- Spooky23 5y ago
  I’d argue that the first rule of growing and preserving wealth is to avoid quasi-religious entanglements with it. Arguments about sovereignty and control are all ultimately specious, as they depend on a global infrastructure paid for by “fiat” dollars to exist. Your “sovereignty” over a random number is meaningless without the network that facilitates its transfer. To date, crypto has proven to be a uniquely awful store of wealth. It was initially a magical way to transfer value cheaply, but the growth of it got rid of the “cheap” part.
  - smeej 5y ago
    > To date, crypto has proven to be a uniquely awful store of wealth. This is a striking claim about the asset class that has gone up in value more than any other in the years since its creation.
    - Spooky23 5y ago
      Tomorrow, it could be 50% less valuable than it is today. It's a highly speculative investment at best, and a pyramid scheme at worst.
      - aaaaaaaaata 5y ago
        How many days in the last 5 years has Bitcoin done a 50% change in a 24hr period? On how many of those occasions was there no opportunity, within say 3-12 months, to sell for higher afterward? and if you don't have the answer to this...
        johnsonlambo 5y ago
        That does not matter. If you bought at the peak in 2017 you would have had to wait 3 years later to come to equal and you would have been down 75% at the low in 2020. I would not consider this a store of value whatsoever. You are literally speaking to the volatility of btc by referencing the massive changes in value over short periods of time. Lets be honest, the majority of btc investors buy because they hope/believe more people will follow after them in a chase for massive gains. Not because the see intrinsic value in the product.
topynate 5y ago
That is an inherently subjective question, possibly with different answers for people in different circumstances and with different risk appetites.
astoor 5y ago
In my view, how you earn your money affects how you value it. Many with cryptocurrency haven't had to do any hard honest work to obtain it, e.g. the early joiners who have just had to wait as their "wealth" accrues from later joiners, or even newer joiners who have made their "wealth" from scams or rugpulls or wash trading to artificially inflate the value of their NFTs or whatever. These people tend not to value their "wealth" in the same way as the "greater fools" who have had to work hard at honest jobs to earn their fiat prior to converting it to cryptocurrency, and so don't have such a problem with the constant risk of losing everything via loss or theft or market crash or whatever.
- seibelj 5y ago
  Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. No different than an investor looking at small cap stocks to pick winners and throwing a lot of money in. It seems you are criticizing the concept of investing.
  - SketchySeaBeast 5y ago
    So it's cool if you take part in a pyramid scheme because you're taking on risk?
    - seibelj 5y ago
      I don't think crypto is a pyramid scheme and your statement is an opinion not a fact.
      - SketchySeaBeast 5y ago
        > Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.
bko 5y ago
You could make the same argument against cash. You could easily lose your cash or have it stolen. That doesn't mean we should force everyone on a centralized digital ledger. You would be given some assurances in case of stolen funds through reversals. But there's a difference between accidentally losing your wallet and having your funds stolen because someone in power doesn't like you. The answer is to allow for both.
- bin_bash 5y ago
  Who keeps a large percentage of their wealth in cash?
  - smeej 5y ago
    I don't know, but they're comparable in sophistication and foresight to people who keep a large percentage of their crypto wealth in a single-signature wallet. Neither one is a good idea. It isn't difficult to set up multisignature wallets, where you can lose some subset of the keys and still retain access to the funds. (It's not easy either, but it's not difficult, and there are companies like Casa and Unchained making it easier.) Just like someone might keep a couple hundred dollars in their wallet/on their person, a couple percent of their wealth in a home safe, and the majority of their wealth distributed across multiple locations with various failsafes to access it, someone might keep a couple hundred bucks worth of BTC in a wallet on their phone, another percent or two of their BTC in a single-sig hardware wallet in a safe at home, and the majority of their BTC in a 3-of-5 multisig setup with only two keys at home, one in a safety deposit box, one in a trusted family member's home, and one in the custody of their attorney.
    - lottin 5y ago
      > It isn't difficult to set up multisignature wallets I don't think setting up the wallet is the hardest part. The hardest part would be to get into a legally binding agreement with the other parties, that you depend on from now on to access your "wealth", the very situation that crypto-currencies were supposed to avert.
thesausageking 5y ago
You can use a multisig service that allows you to keep control and makes it really hard lose your keys. Even still, if you're in a first world country and well off, it might not be for you. At least right now. But it's been hugely useful for Ukraine: https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s-crypto-banker-describes-how-war-is-changing-his-life https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s...
MrMan 5y ago
the reason you lost your money is more important than whether you have any money
tenuousemphasis 5y ago
Luckily, there are already mitigations for risk of loss, notably backups and multi-signature wallets. Both have tradeoffs and additional mitigations. Backups are additional single points of failure but can be protected by passphrases. Multi-signature is more complicated but has no single point of failure and redundancy. Future developments like covenants (restricting future spending of a coin) will create even more secure storage, systems that allow you to claw back stolen funds using backup keys for example.
- SketchySeaBeast 5y ago
  > systems that allow you to claw back stolen funds using backup keys for example Doesn't that remove the trust in the transaction? Isn't the one of the promised joys of these things that, short of a fork, the transaction is immutable and that people don't have to worry about fraud in the form of charge backs or their money disappearing once they have it?
  - smeej 5y ago
    Not necessarily. If you know the mechanism for potential reversal of the transaction and trust the process responsible for making the decision about when to reverse a transaction, you've known the rules and the context from the start. It would have to be a well-designed process to earn your trust, but it's not an unsolvable problem. To my knowledge, there aren't any smart contracts that have implemented such a system really well yet, but I might just not have heard about them, or they may just not have been tried yet.
    - SketchySeaBeast 5y ago
      Well, I'd be interest in how this turns out - the only way I can envision it is either both parties need to agree to a return (which can already be done by agreement), one party has to agree (taking agency away from the other), or a "higher power" needs to agree (removing the freedom from governance that these technologies propose to offer). In most of these cases there's self-determination being lost.
plsbenice34 5y ago
Did you see the videos of Russians lining up all day to try to withdraw tiny amounts of cash from an ATM?
- NikolaNovak 5y ago
  But I'm not in Russia and it feels I have to do A) huge amount of research B) huge amount of risk / personal responsibility C) and Still trust some or multiple 3rd party services to practically obtain or withdraw bitcoin, which have same or more power or likelihood to cut me off I (think) understand the dream. I don't see the reality of seamlessly easily practically safely cheaply transacting bitcoin. As a mediocre techie, every time I ponder getting some bitcoin for giggle, I get lost in conolex how tos and run screaming away from complexity and risk.
  - plsbenice34 5y ago
    I find it takes even more effort to continually understand the situation of the traditional financial system and the current status of geopolitics. I don't know when my country could became the next Russia. It's a hostile world out there; effort is required to survive, and risk is unavoidable
    - NikolaNovak 5y ago
      That's fair; but I was talking about strictly logistics of having cash and withdrawing cash, compared to having bitcoin and using/withdrawing bitcoin.
EGreg 5y ago
Because you have a choice of how to custody it.
newacc9 5y ago
This has been solved with X-of-N multisig since 2012, but its opt-in.
rglover 5y ago
The answer to that question was demonstrated quite clearly in Canada just two months ago.
nyolfen 5y ago
you are welcome to offload that responsibility to a hosted wallet if you don't think you can handle it
- aaaaaaaaata 5y ago
  Or an attorney. Or five different parties you trust.
deleted 5y ago
[deleted]
BTCOG 5y ago
This is similar to losing your wallet full of cash. Simply do not lose your cash. Don't store every dollar of your cash in one place so easily to lose, either.

game_the0ry 5y ago

Trade offs - bitcoin is not a free lunch. If you want to be fully sovereign with your wealth, you have to accept full responsibility of that wealth. If that is not a responsibility you want bc you believe it is too risky, then do not buy bitcoin. Or, you can trust centralized authority (a bank) with that responsibility; obviously, the trade off is you lose full control of your wealth. Additionally, how you approach ownership of your wealth is not binary. Nothing is stopping you from putting some proportion of each in either bank or bitcoin.

enkid 5y ago
What does being fully sovereign mean for something that's only used as a medium of exchange? It's value is always only meaningful when at least two people agree on it's value. At best you only control half of the equation.
- smeej 5y ago
  The comparison isn't reasonably between "sovereign control of your wealth" and "in total control of what everyone else values." That doesn't even make sense. The question worth asking is about how controlling your own wealth, but having to trust the value of it to a giant swath of people over which no one entity has any significant control, compares to not having any control of your own wealth, AND having the value of any wealth you do have dependent entirely on the will of some unelected bureaucrat.
- game_the0ry 5y ago
  > It's value is always only meaningful when at least two people agree on it's value. Is it not totally obvious that bitcoin has market value? If not, consider these points - bitcoin was not created by MIT and Uchicago STEM and econ PhDs, it was born out of an anonymous internet "white paper." It proved itself as a type of "money" in the internet dark markets, and continues to do so. It wasn't "lab tested," it was tested in the real world. When China banned crypto, the price of bitcoin did not crash. Only authoritarian countries have banned it, while some US lawmakers hold bitcoin and Gensler (chairmen of the SEC) taught a class at MIT about crypto. These should be very compelling aspects of bitcoin.
  - Spooky23 5y ago
    > bitcoin was not created by MIT and Uchicago STEM and econ PhDs How do you know?
    - game_the0ry 5y ago
      Bc there is no way academics would not take credit for it. That's like expecting a fish not to swim.
  - ineedasername 5y ago
    What about the sovereign part? No one has total power over their money because its utility is always based in another's willingness to participate in the transaction. If bitcoin existed before the Civil Rights movement in the US, it would not have helped people of color spend their money in "whites only" establishments or buy houses in white neighborhoods when (prior to 1948) a covenant could legally exclude a person of color from owning certain homes. And after 1948 the legal system could still be weaponized against such purchases, or if all else failed the buyer harassed or worse. These are more extreme examples, but that sort of thing does still go on in places both in the US and elsewhere. Bitcoin or other crypto fall short of solving monetary censorship. Separately, why does it matter where bitcoin was created? (especially given that we really don't know who created it anyway).
  - enkid 5y ago
    Market value is having someone else have control over the value of what you control. Market value may not be centralized, but it is the definition of something you do not control. This is my point. You cannot have full control over something that's value is dictated by an external entity, the entity being the market in this case. The concept of having "full sovereignty" over something that you don't control the value of, and the only purpose is to exchange for something of value, is non-sensical.
Spooky23 5y ago
I’d argue that the first rule of growing and preserving wealth is to avoid quasi-religious entanglements with it. Arguments about sovereignty and control are all ultimately specious, as they depend on a global infrastructure paid for by “fiat” dollars to exist. Your “sovereignty” over a random number is meaningless without the network that facilitates its transfer. To date, crypto has proven to be a uniquely awful store of wealth. It was initially a magical way to transfer value cheaply, but the growth of it got rid of the “cheap” part.
- smeej 5y ago
  > To date, crypto has proven to be a uniquely awful store of wealth. This is a striking claim about the asset class that has gone up in value more than any other in the years since its creation.
  - Spooky23 5y ago
    Tomorrow, it could be 50% less valuable than it is today. It's a highly speculative investment at best, and a pyramid scheme at worst.
    - aaaaaaaaata 5y ago
      How many days in the last 5 years has Bitcoin done a 50% change in a 24hr period? On how many of those occasions was there no opportunity, within say 3-12 months, to sell for higher afterward? and if you don't have the answer to this...
      - johnsonlambo 5y ago
        That does not matter. If you bought at the peak in 2017 you would have had to wait 3 years later to come to equal and you would have been down 75% at the low in 2020. I would not consider this a store of value whatsoever. You are literally speaking to the volatility of btc by referencing the massive changes in value over short periods of time. Lets be honest, the majority of btc investors buy because they hope/believe more people will follow after them in a chase for massive gains. Not because the see intrinsic value in the product.

topynate 5y ago

That is an inherently subjective question, possibly with different answers for people in different circumstances and with different risk appetites.

astoor 5y ago

In my view, how you earn your money affects how you value it. Many with cryptocurrency haven't had to do any hard honest work to obtain it, e.g. the early joiners who have just had to wait as their "wealth" accrues from later joiners, or even newer joiners who have made their "wealth" from scams or rugpulls or wash trading to artificially inflate the value of their NFTs or whatever. These people tend not to value their "wealth" in the same way as the "greater fools" who have had to work hard at honest jobs to earn their fiat prior to converting it to cryptocurrency, and so don't have such a problem with the constant risk of losing everything via loss or theft or market crash or whatever.

seibelj 5y ago
Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. No different than an investor looking at small cap stocks to pick winners and throwing a lot of money in. It seems you are criticizing the concept of investing.
- SketchySeaBeast 5y ago
  So it's cool if you take part in a pyramid scheme because you're taking on risk?
  - seibelj 5y ago
    I don't think crypto is a pyramid scheme and your statement is an opinion not a fact.
    - SketchySeaBeast 5y ago
      > Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.

bko 5y ago

You could make the same argument against cash. You could easily lose your cash or have it stolen. That doesn't mean we should force everyone on a centralized digital ledger. You would be given some assurances in case of stolen funds through reversals. But there's a difference between accidentally losing your wallet and having your funds stolen because someone in power doesn't like you. The answer is to allow for both.

bin_bash 5y ago
Who keeps a large percentage of their wealth in cash?
- smeej 5y ago
  I don't know, but they're comparable in sophistication and foresight to people who keep a large percentage of their crypto wealth in a single-signature wallet. Neither one is a good idea. It isn't difficult to set up multisignature wallets, where you can lose some subset of the keys and still retain access to the funds. (It's not easy either, but it's not difficult, and there are companies like Casa and Unchained making it easier.) Just like someone might keep a couple hundred dollars in their wallet/on their person, a couple percent of their wealth in a home safe, and the majority of their wealth distributed across multiple locations with various failsafes to access it, someone might keep a couple hundred bucks worth of BTC in a wallet on their phone, another percent or two of their BTC in a single-sig hardware wallet in a safe at home, and the majority of their BTC in a 3-of-5 multisig setup with only two keys at home, one in a safety deposit box, one in a trusted family member's home, and one in the custody of their attorney.
  - lottin 5y ago
    > It isn't difficult to set up multisignature wallets I don't think setting up the wallet is the hardest part. The hardest part would be to get into a legally binding agreement with the other parties, that you depend on from now on to access your "wealth", the very situation that crypto-currencies were supposed to avert.

thesausageking 5y ago

You can use a multisig service that allows you to keep control and makes it really hard lose your keys. Even still, if you're in a first world country and well off, it might not be for you. At least right now. But it's been hugely useful for Ukraine: https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s-crypto-banker-describes-how-war-is-changing-his-life https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s...

MrMan 5y ago

the reason you lost your money is more important than whether you have any money

tenuousemphasis 5y ago

Luckily, there are already mitigations for risk of loss, notably backups and multi-signature wallets. Both have tradeoffs and additional mitigations. Backups are additional single points of failure but can be protected by passphrases. Multi-signature is more complicated but has no single point of failure and redundancy. Future developments like covenants (restricting future spending of a coin) will create even more secure storage, systems that allow you to claw back stolen funds using backup keys for example.

SketchySeaBeast 5y ago
> systems that allow you to claw back stolen funds using backup keys for example Doesn't that remove the trust in the transaction? Isn't the one of the promised joys of these things that, short of a fork, the transaction is immutable and that people don't have to worry about fraud in the form of charge backs or their money disappearing once they have it?
- smeej 5y ago
  Not necessarily. If you know the mechanism for potential reversal of the transaction and trust the process responsible for making the decision about when to reverse a transaction, you've known the rules and the context from the start. It would have to be a well-designed process to earn your trust, but it's not an unsolvable problem. To my knowledge, there aren't any smart contracts that have implemented such a system really well yet, but I might just not have heard about them, or they may just not have been tried yet.
  - SketchySeaBeast 5y ago
    Well, I'd be interest in how this turns out - the only way I can envision it is either both parties need to agree to a return (which can already be done by agreement), one party has to agree (taking agency away from the other), or a "higher power" needs to agree (removing the freedom from governance that these technologies propose to offer). In most of these cases there's self-determination being lost.

plsbenice34 5y ago

Did you see the videos of Russians lining up all day to try to withdraw tiny amounts of cash from an ATM?

NikolaNovak 5y ago
But I'm not in Russia and it feels I have to do A) huge amount of research B) huge amount of risk / personal responsibility C) and Still trust some or multiple 3rd party services to practically obtain or withdraw bitcoin, which have same or more power or likelihood to cut me off I (think) understand the dream. I don't see the reality of seamlessly easily practically safely cheaply transacting bitcoin. As a mediocre techie, every time I ponder getting some bitcoin for giggle, I get lost in conolex how tos and run screaming away from complexity and risk.
- plsbenice34 5y ago
  I find it takes even more effort to continually understand the situation of the traditional financial system and the current status of geopolitics. I don't know when my country could became the next Russia. It's a hostile world out there; effort is required to survive, and risk is unavoidable
  - NikolaNovak 5y ago
    That's fair; but I was talking about strictly logistics of having cash and withdrawing cash, compared to having bitcoin and using/withdrawing bitcoin.

EGreg 5y ago

Because you have a choice of how to custody it.

newacc9 5y ago

This has been solved with X-of-N multisig since 2012, but its opt-in.

rglover 5y ago

The answer to that question was demonstrated quite clearly in Canada just two months ago.

nyolfen 5y ago

you are welcome to offload that responsibility to a hosted wallet if you don't think you can handle it

aaaaaaaaata 5y ago
Or an attorney. Or five different parties you trust.

deleted 5y ago

[deleted]

BTCOG 5y ago

This is similar to losing your wallet full of cash. Simply do not lose your cash. Don't store every dollar of your cash in one place so easily to lose, either.