4 ms·

Keeping crypto on an exchange is like keeping gold at the gold dealer. Just why.

by notch656a 4y ago

arcticbull 4y ago
Nobody keeps bricks of gold at home. Just why would they. Way too much risk.
- boznz 4y ago
  no risk if nobody knows they are there, ditto if you are a crypto billionaire and dont tell anyone
  - jackvalentine 4y ago
    Your house burns down. Your house floods. You put your hardware wallet on the kitchen bench after adding/withdrawing crypto and the dog grabs it and chews it up.
    - BuyMyBitcoins 4y ago
      Don’t forget about the risk of your brain naturally forgetting a password that isn’t in active use. Especially considering your cold storage solution probably doesn’t share a password you use anywhere else.
- notch656a 4y ago
  I'm not rich enough to own 'bricks' of gold, but if I was I would be a bit more creative than keeping them all naively stored under a bed or something at home. In any case having been subjected to various government fuckery in my life, I'm keenly aware of the need for wealth diversification. Self custody of (some fraction of) wealth is a means of diversification against risks of thugs in various official capacities. And to say nobody keeps bricks of gold at home, well just peruse reddit [0]. [0] https://i.redd.it/gbtjawvob1g61.jpg https://i.redd.it/gbtjawvob1g61.jpg
  - arcticbull 4y ago
    Reddit is the classic trump card haha, you got me there.
_vdpp 4y ago
Same reason you don’t keep all your savings under the mattress. There have been a number of stories about people losing or corrupting their crypto wallets. Once it’s gone, it’s gone.
- deleted 4y ago
  [deleted]
- mwcremer 4y ago
  Which raises an interesting question: what fraction of Bitcoin, for example, is effectively lost forever? I assume minuscule, but like entropy it never decreases?
  - andirk 4y ago
    I assume its some large % of all bitcoin is lost especially from early adopters mining thousands of then worthless tokens.
  - woodruffw 4y ago
    You assume wrong! Approximately one in five BTC minted so far has been lost. [1]: https://www.nytimes.com/2021/01/13/business/tens-of-billions-worth-of-bitcoin-have-been-locked-by-people-who-forgot-their-key.html https://www.nytimes.com/2021/01/13/business/tens-of-billions...
- notch656a 4y ago
  Would you keep all your cash in the bank? Frankly I feel terrified if I don't have enough cash on hand to last at least a month. For instance the IRS has been known to freeze bank accounts of completely innocent business owners on wild goose chase accusations that small deposits are structured, for instance. It's also worth noting there are certain unique risks to exchanges that aren't really applicable to most bank accounts.
  - tluyben2 4y ago
    Not sure if it’s my circle, but you seem an exception. I live in a tiny village and haven’t touched cash for years (somewhere 2018), nor has anyone I know. Personally I hear what you are saying as I had my accounts frozen (in my country, you can basically sue a company and start by freezing the assets of the company and their owners without any proof) a long time ago, so I always have a lot of accounts no one knows about (the tax office does but they are not allowed to provide those to lawyers). However, cash… Nah. I can kind of see that someone might put gold somewhere just in case the entire system collapses (which will end cash too), but outside that…
not_kurt_godel 4y ago
Because the only practical way to spend the magical decentralized internet money is to trust a centralized intermediary to not only mediate transactions but hold your entire account with no accountability, regulation, or oversight.

Keeping crypto on an exchange is like keeping gold at the gold dealer. Just why.

arcticbull 4y ago

Nobody keeps bricks of gold at home. Just why would they. Way too much risk.

boznz 4y ago
no risk if nobody knows they are there, ditto if you are a crypto billionaire and dont tell anyone
- jackvalentine 4y ago
  Your house burns down. Your house floods. You put your hardware wallet on the kitchen bench after adding/withdrawing crypto and the dog grabs it and chews it up.
  - BuyMyBitcoins 4y ago
    Don’t forget about the risk of your brain naturally forgetting a password that isn’t in active use. Especially considering your cold storage solution probably doesn’t share a password you use anywhere else.
notch656a 4y ago
I'm not rich enough to own 'bricks' of gold, but if I was I would be a bit more creative than keeping them all naively stored under a bed or something at home. In any case having been subjected to various government fuckery in my life, I'm keenly aware of the need for wealth diversification. Self custody of (some fraction of) wealth is a means of diversification against risks of thugs in various official capacities. And to say nobody keeps bricks of gold at home, well just peruse reddit [0]. [0] https://i.redd.it/gbtjawvob1g61.jpg https://i.redd.it/gbtjawvob1g61.jpg
- arcticbull 4y ago
  Reddit is the classic trump card haha, you got me there.

_vdpp 4y ago

Same reason you don’t keep all your savings under the mattress. There have been a number of stories about people losing or corrupting their crypto wallets. Once it’s gone, it’s gone.

deleted 4y ago
[deleted]
mwcremer 4y ago
Which raises an interesting question: what fraction of Bitcoin, for example, is effectively lost forever? I assume minuscule, but like entropy it never decreases?
- andirk 4y ago
  I assume its some large % of all bitcoin is lost especially from early adopters mining thousands of then worthless tokens.
- woodruffw 4y ago
  You assume wrong! Approximately one in five BTC minted so far has been lost. [1]: https://www.nytimes.com/2021/01/13/business/tens-of-billions-worth-of-bitcoin-have-been-locked-by-people-who-forgot-their-key.html https://www.nytimes.com/2021/01/13/business/tens-of-billions...
notch656a 4y ago
Would you keep all your cash in the bank? Frankly I feel terrified if I don't have enough cash on hand to last at least a month. For instance the IRS has been known to freeze bank accounts of completely innocent business owners on wild goose chase accusations that small deposits are structured, for instance. It's also worth noting there are certain unique risks to exchanges that aren't really applicable to most bank accounts.
- tluyben2 4y ago
  Not sure if it’s my circle, but you seem an exception. I live in a tiny village and haven’t touched cash for years (somewhere 2018), nor has anyone I know. Personally I hear what you are saying as I had my accounts frozen (in my country, you can basically sue a company and start by freezing the assets of the company and their owners without any proof) a long time ago, so I always have a lot of accounts no one knows about (the tax office does but they are not allowed to provide those to lawyers). However, cash… Nah. I can kind of see that someone might put gold somewhere just in case the entire system collapses (which will end cash too), but outside that…

not_kurt_godel 4y ago

Because the only practical way to spend the magical decentralized internet money is to trust a centralized intermediary to not only mediate transactions but hold your entire account with no accountability, regulation, or oversight.