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Sure thing - once again people were unable to move around their coins due to depending on a tool hosted on someone else's computer. We've seen this many times,

by jmoak3 4y ago

Sure thing - once again people were unable to move around their coins due to depending on a tool hosted on someone else's computer. We've seen this many times, and it's a shame because letting another party manage your wallet or run a node for you defeats what I find attractive about bitcoin - the ability to be a peer in a decentralized peer-to-peer system. If Binance went under in that time, people would have simply been screwed and lost their coins Mt.Gox-style. Bitcoin only achieves it's decentralized promise if everyone hosts their own node and connects their wallet to it, and I'm personally not seeing that. Why don't people run their own nodes and connect their wallets to their nodes exclusively? Because it's a pain, and nobody wants to host their own servers. They'll pick gmail over a mail server 99% of the time, and that is bad for the promise of bitcoin. I would wager most/all cryptocurrencies have similar problems. Moxie's web3 blog touched on this, and he nailed it.

gardenhedge 4y ago
How do you know many (or too many) people are doing it this way?
- jmoak3 4y ago
  There are ~16k total reachable bitcoin nodes out there, which means there are plenty of users are trusting 3rd party nodes. https://bitnodes.io/ https://bitnodes.io/ Having your own keys and using a wallet application that connects to someone else's node is better than keeping your coins on an exchange, but you're still relying on someone else's node to not screw you. Compare the meager 16k nodes people trust with the 100 million who claim to own bitcoin. https://www.wsj.com/articles/bitcoins-one-percent-controls-lions-share-of-the-cryptocurrencys-wealth-11639996204 https://www.wsj.com/articles/bitcoins-one-percent-controls-l... (no paywall: https://archive.ph/73vR1#selection-4213.0-4213.97 https://archive.ph/73vR1#selection-4213.0-4213.97) I have no data on this but if history is any indication, I'd wager 90% of user's wallets point to the same 100 nodes. All of crypto looks like PayPal with extra steps. If I'm incorrect someone please educate me on this.
  - gardenhedge 4y ago
    Oh, I see what you mean. I own BTC but don't run a node.. so your point is that I am dependent on other people running nodes? It's a good point alright.

by jmoak3 4y ago

gardenhedge 4y ago

How do you know many (or too many) people are doing it this way?

jmoak3 4y ago
There are ~16k total reachable bitcoin nodes out there, which means there are plenty of users are trusting 3rd party nodes. https://bitnodes.io/ https://bitnodes.io/ Having your own keys and using a wallet application that connects to someone else's node is better than keeping your coins on an exchange, but you're still relying on someone else's node to not screw you. Compare the meager 16k nodes people trust with the 100 million who claim to own bitcoin. https://www.wsj.com/articles/bitcoins-one-percent-controls-lions-share-of-the-cryptocurrencys-wealth-11639996204 https://www.wsj.com/articles/bitcoins-one-percent-controls-l... (no paywall: https://archive.ph/73vR1#selection-4213.0-4213.97 https://archive.ph/73vR1#selection-4213.0-4213.97) I have no data on this but if history is any indication, I'd wager 90% of user's wallets point to the same 100 nodes. All of crypto looks like PayPal with extra steps. If I'm incorrect someone please educate me on this.
- gardenhedge 4y ago
  Oh, I see what you mean. I own BTC but don't run a node.. so your point is that I am dependent on other people running nodes? It's a good point alright.