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Bitcoin, just like traditional money, can exist as a non-blockchain ledger entry in bank's computer system. This is how most exchanges and custodial wallets wor
by bluepnume 5y ago
Bitcoin, just like traditional money, can exist as a non-blockchain ledger entry in bank's computer system. This is how most exchanges and custodial wallets work.
The difference is, you can also self-custody your Bitcoin. Obviously what's in your custody is just a private key; but for all intents and purposes that is self-custody. You are the sole person in control of those coins.
So Bitcoin gives you the choice of how you want to store it. Traditional money does not give you that choice. At a certain point there are physical and practical limits to how much cash you can self-custody (not to mention transport or transfer from one place or person to another).
- ineedasername 5y agoSelf storage of non crypto assets beyond a certain threshold often end up taking the form of other assets like real estate. Purely from a net worth standpoint it's usually not optimal to have cash (physical or banked) on hand above a certain point. But I take your meaning and it's a valid point: crypto self storage scales better than traditional cash. If scaling of that sort was an issue for me and self-storage a critical feature I wanted then crypto would fill the need. For the moment I'd still avoid using it for that purpose: I don't consider any coin truly stable at the moment, and if a new one came along tomorrow that appeared to have a rock solid foundation then I'd still want to see a few years of history before trusting it's stability. USDC might come close, but can you have self-custody of it, or trade it outside of the Coinbase ecosystem?
- bluepnume 5y agoYou can certainly self-custody USDC -- but unlike Bitcoin, even if you self-custody you still have to trust that the USD backing the coin actually exists somewhere.