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Satoshi's dream of a decentralised ledger finally reaches its ultimate form of a centralised list maintained by the DTC. Rejoice!
by fancyfredbot 3y ago
Satoshi's dream of a decentralised ledger finally reaches its ultimate form of a centralised list maintained by the DTC. Rejoice!
- ur-whale 3y agoWhile I agree with the sentiment, please remember that actually buying BTC directly and doing self-custody is still an option.
- fancyfredbot 3y agoSo much more hassle though. Nobody's going to bother with that now - what's the point?
- treyd 3y agoUX with hardware wallets (which you can get for like $60) is pretty decent these days and it eliminates a lot of stress in the workflows you typically use. There's still a huge room for improvement with seedphrase backup and "social recovery", but it's easier now than it's been in the past.
- lxgr 3y agoHow does the average person back these up in a secure, yet durable way that lasts decades and can easily be discovered by (and only by) their ultimate heirs?
- akgoel 3y agoPassphrase in a bank safe deposit box.
- jekrb 3y agoI think everyone will have different behavior sec for their funds, with the options now ranging from simply committing a 12 or 24 word seed phrase to memory and buying ETF shares. There is shamir secret splitting, multisig, MPC, secure enclaves with biometerics, etc... There will be apps like Fuse wallet: https://www.fusewallet.com/ https://www.fusewallet.com/ There will be phones like Saga: https://solanamobile.com/hardware https://solanamobile.com/hardware I think how one handles their wallets will be much like how people make their espressos. Some will just stick k-cup in a machine and hit a button, others will become full-blown coffee enthusiasts that carefully measure their beans, de-static their grinds, and extract for the exact right amount of time.
- lxgr 3y ago> simply committing a 12 or 24 word seed phrase to memory That's absolutely out of the question for almost any human being, especially given the timeframes involved. > There will be phones like Saga [...] There will be apps like Fuse wallet: [...] Again, we're talking about a timeframe of decades. How many of these will even still boot up after that amount of time? None of these seem safe to just throw in a bank safe deposit box. > make their espressos. Some will just stick k-cup in a machine and hit a button I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.
- k12sosse 3y ago> I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso. No, that's his passphrase
- jekrb 3y agoMy point is there are thousands of ways to handle your wallets, I don't think there will be one average way. The ETF is probably the equivalent of this "espresso style" k-cup https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-Coffee/p/espresso-style-coffee-cafe-bustelo-k-cup#24_CT https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-C...
- transcriptase 3y agoSame as anything else really: A sheet of paper and a safety deposit box. You die, your heir or executor takes the appropriate paperwork to the bank, and then they get the contents of the box.
- lxgr 3y agoHow many people even have a safety deposit box? Many banks don't offer them anymore, and in some countries they have a disturbing tendency of getting robbed, with absolutely no recourse for the depositors (since contents are usually unverified and uninsured).
- transcriptase 3y agoThen buy a large fire safe, bolt it to your floor inside a closet, and fill it with 10 lb barbell plates until it requires a forklift to move. If your threat model includes someone inside your home with power tools and you can’t trust a bank… you might want to consider moving.
- lxgr 3y agoGiven that people probably don't arrange their life around the ability to safeguard physical assets, I think you've just given several good arguments against self-custody: Many people don't own a home. Not all of those that do want to expose themselves to the liability of storing valuables there. The safety situation between homes even within the US varies greatly, and even more so internationally. Banks with safety deposit boxes aren't ubiquitous. If it works for you, great! I'm just saying that you might be in the minority here.
- fragmede 3y agoThat's cool. What do I do when I move every few years because I'm a renter and can't afford to own a home in this economy?
- transcriptase 3y ago
- treyd 3y agoThat's what the "social recovery" ideas are for. It's a framework for doing key management across multiple trusted parties under controlled conditions in the hypothetical case your primary keys are inaccessible. You could have your executor hold a key, for example.
- brucethemoose2 3y agoI love this scenario. "Why is Bitcoin a great asset?" "Because its the future of currency! Its great and everyone will use it!" "Then why don't you just get it directly?" "Uh, its too much of a hassle. For me. A professional finance worker."
- hn_throwaway_99 3y ago> Nobody's going to bother with that now - what's the point? This is actually a great comment that I think applies well to the crypto world as a whole, even if that wasn't your original intent.
- fancyfredbot 3y agoI will own up to trolling slightly to draw attention to the fact that exhanging bitcoin as a digital currency is not something which would occur to most people who own it. The only thing most people will do with their bitcoin is exchange it for fiat.
- tempestn 3y agoThat and hodl it, hoping it'll someday be worth more.
- bob_malrey 3y agoBut what’s the point of Bitcoin then? They might as well put anything in these ETFs and it’d be the same thing then: the flat rocks in my garden are limited in number and very scarce, wanna put some in an etf?
- rkagerer 3y agoMaybe, but my rocks are better, faster, and more scalable! Frankly we could probably get our rock ETF's approved more quickly. Regardless of how you feel about Bitcoin, it's not (or shouldn't be) the SEC's place to play nanny and dictate the particular assets/commodities/etc. in which you're allowed to invest your money. Incidentally even one of SEC commissioners agrees https://www.sec.gov/news/statement/peirce-statement-spot-bitcoin-011023 https://www.sec.gov/news/statement/peirce-statement-spot-bit...
- dovakin 3y agoWell as a matter of fact btc is none of these things compared to any other crypto, which are themselves not particularly any of these things. But I agree with the fact it’s not the SEC’s role to tell us the merit of btc. I do have some worries on the Tether scam still going on for example though, which has been manipulating BTC for years.
- rvnx 3y agoNo matter if it is a scam or not, at the end it worked. Similar to banks which don't have enough capital. Now Tether owns tons of money, and can buy treasuries that bring few % of interests, and these interests are not paid back to USDT holders. As a result, overtime, they'll be able to fill-in any potential gaps or money accidentally lost.
- teh_infallible 3y agoImpressive, isn’t it? They bootstrapped a stablecoin! Edit: spelling
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- rkagerer 3y agoIt's not really that hard, and the tools are continually evolving to be more user friendly (e.g. Last year Trezor added hardware support to simplify Shamir backup). Of course the ability to hit "buy now" in the same marketplace you manage all your other investments is pretty low friction and I'm sure this decision will bring fresh investment out of the woodwork.
- houseatrielah 3y agoSave approx. 1% on fees annually is the point.
- miohtama 3y agoEveryone who does not have access to the US financial system will keep doing it. Which is 7/8B people on this planet.
- lxgr 3y agoAre you missing some other somewhat relevant financial systems here by any chance? The EU (higher population than the US) has had Bitcoin ETFs for a while now.
- TheDudeMan 3y agoYour question is equivalent to asking the point of bitcoin (avoid centralization).
- trompetenaccoun 3y agoThe mob always wins in the end, but I never understood why many on HN have been so cynical about Bitcoin. At least Satoshi tried, whoever they were. They gave a gift to the world, but it sadly got co-opted and taken over first by small-time grifters and now by the big boys at Wall Street. In hindsight it was probably bound to happen, because money buys influence and a casual decentralized group of coders can never win against banks and governments. Anyway, digital gold is still better than nothing. It's still an innovation as a store of value, even if the payments idea is basically history (some Bitcoin maxis just don't understand that yet). Also Bitcoin has inspired a whole ecosystem of other blockchains. If you want the original concept of a peer-to-peer electronic cash system, Monero is probably one of the best to check out currently. Governments are btw currently going after Monero, because unlike the common myth about Bitcoin, it actually enables anonymous payments - just like cash. And so of course we can't have that. Multiple exchanges already announced they were forced to delist XMR.
- loceng 3y agoIt's only worth something if someone else values it vs. physical gold.
- snapcaster 3y agoOf course, this is also true of physical gold though. If all non-industrial use of gold were to end the price would collapse
- losteric 3y agoThat's a tautology.... The aesthetic and industrial applications of gold are what makes it intrinsically valuable - that being the key distinction, and distinct from Bitcoin. If you ignore the useful aspects, of course it's no different from any useless thing.
- sapphicsnail 3y agoGold's value is mostly disconnected from it's utility. We've just decided it's valuable for a longer period of time so less people question it.
- maxioatic 3y agoBut then I have to pay taxes on it. Time to full send my retirement accounts into these ETFs so I can retire early. /s Actually though I might consider allocating a tiny percentage (1-3%) to these. Seems like fairly low risk with enough upside, but who knows.
- siwatanejo 3y agoWhat do you mean? self-custodying BTC is still unrealized gains until you sell, so no tax either.
- ghshephard 3y agoBTC ETF in in a 401K/IRA can be contributed, grow, or possibly be withdrawn tax-free depending on how you set it up. Coinbase reports your gains and you owe taxes on them. (Don't think Coinbase has an IRA/401K option for custody. Yet.)
- maxioatic 3y agoI was referring to the capital gains tax you pay for selling BTC on an exchange. I was thinking specifically about Roth IRAs, where any gains are tax free, but a 401k or similar would work too.
- anonu 3y agoThese are cash creates not in kind creates. So there is no escaping taxes. You will be paying capital gains just by holding spot Bitcoin ETFs Edit: after further research it appears that the cash create mechanism doesn't cause a tax event for shareholders as it does with mutual funds. See https://www.grayscale.com/blog/legal-topics/addressing-potential-tax-considerations-for-investors-in-spot-bitcoin-etfs https://www.grayscale.com/blog/legal-topics/addressing-poten... We will have to see how every Bitcoin ETF is structured. YMMV depending on this structure and how you get taxed.
- tempestn 3y agoI think the parent is talking about buying the ETF inside a tax sheltered account.
- deleted 3y ago[deleted]
- factorialboy 3y agoSarcasm aside, this is the ultimate endorsement. The likes of Blackrock could use BTC as a hedge if the Feds keep on printing USD under political pressure.
- bob_malrey 3y agoHow would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chances to lose it or get it stolen are higher.
- shawabawa3 3y agoFees for storing and moving bitcoin are absolutely not approaching the costs for gold Try moving $10M of gold from one end of the world to another for under $100
- nikolay 3y agoWell, how about trying to move $200 in Bitcoin - it's the most expensive funds transfer. You cannot "move" $50 as it's cost-prohibitive!
- mratsim 3y agoTry moving $50 in a private bank. Fees for stocks start at $200.
- nikolay 3y agoI do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!
- nullc 3y agoSome people own bitcoin only because they expect its value to increase due to demand from others. There is nothing inherently invalid about this-- speculation occurs in all kinds of valuable assets and it serves the public good of creating a demand buffer. For those parties, bitcoin's general properties are not very relevant and a centeralized list maintained by DTCC may well better serve their particular needs. To the extent that it does: more power to them!
- miohtama 3y agoNote that the same is for gold. Most people own gold ETFs, not physical gold, and most gold’s value is speculation (not industrial use).
- vasco 3y agoAre there any asset classes in public markets that aren't driven primarily by speculation?
- nullc 3y agoSure, any kind of relatively short duration dividend/interest yielder, to give an example. Though it's possible to make extra money with t-bills by trading against rates, no one can say thats a primary driver. Likewise for much of the bond market.
- FactKnower69 3y agoGold did at one point in history have an actual use case apart from speculation and being pretty: it is almost uniquely suitable as currency and store of value (along with silver) because it is hard to create, easy to purify and non-destructively measure the purity of, fungible, and can be easily split and recombined into units of any desired weight as far as having an actual historic or present day use case, blockchain snake oil is still in search of a problem only it can solve to this day
- anonu 3y agoSpot on. DeFi relies heavily on CeFi.
- CyberDildonics 3y agoCryptocurrency still works the same as it ever did. I would be more concerned that the average bitcoin transactions costs over $11 dollars (down from over $37 USD a month ago) https://bitinfocharts.com/comparison/bitcoin-transactionfees.html#3m https://bitinfocharts.com/comparison/bitcoin-transactionfees...
- earnesti 3y agoWhat about Lightning Network?
- thefourthchime 3y agoThat's off chain and should be nearly free
- SamPatt 3y agoIf only. It's not off chain when you open a channel, rebalance a channel, or close a channel. On-chain Fees need to be paid at every step of the way. High BTC fees impede the Lightning Network from being a true scaling solution, an obvious fact that has been dismissed for many years by adherents of absurdly small block sizes.
- ric2b 3y agoIt is nearly free.
- CyberDildonics 3y agoIf you want an actual transaction on the actual chain that can actually be spent then you need to pay the giant bitcoin transaction fee. Why would anyone put up with the extreme convoluted nonsense of the lightning network when they could use any other cryptocurrency and have almost no fees because they aren't constraining their block sizes to sell a second layer? There is no technical reason to do this, it was purely a political propaganda based move. Before you respond with "but disk" or "but network" or "but cpu" look at the actual bitcoin throughput (about 700KB every 10 minutes) and look at how much hard drive space you can buy for the cost of one transaction. Then realize that individuals don't even need to sync with the chain to use cryptocurrencies. This is a well worn road.
- mrinfinite 3y agoSatoshi Nakamoto means Central Intelligence Agency LITERALLY!!!! Just the facts
- beambot 3y agoThe bigger irony will be when the US Government steps in and seizes all BTC & ETH within their reach so that they can create their very own crypto-backed central bank digital currency (CBDC) as the new "gold standard" a la Executive Order 6102 in 1933: https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102 Incidentally: When you look at currencies (and governments) on long enough time scales, you'll see that they're pretty ephemeral -- e.g. very few currencies or governments around today were around in (roughly) the same form 200 years ago. I consider it a benefit that we might have a way of persisting wealth that doesn't involve rent extraction or digging shiny metal out of the ground -- though I admit to not being a fan of the "wastefulness" of PoW in the midst of energy decarbonization. If you want a fun watch: The History of Paper Money on Youtube is a fascinating look at how currencies, banks, central banks, and fiat money all came into existence. TLDR: Our "modern" approach to money was a giant "too big to fail" ponzi scheme largely perpetrated (multiple times) by John Law. Wild. https://www.youtube.com/watch?v=-nZkP2b-4vo https://www.youtube.com/watch?v=-nZkP2b-4vo
- david_shi 3y agoIf they try to pull this off, human civilization will have entered full 1984 territory
- neodypsis 3y agoI think you misunderstand the purpose of ETFs.
- dang 3y ago"Don't be snarky." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- fancyfredbot 3y agoGenuinely mortified. I'll resist the urge in future. Thanks for keeping HN such a great site Dan.
- dang 3y agoAppreciated! Btw I know comments like that are fun when talking to friends or whatever. We just have that guideline because of how they influence discussion on a large internet forum...not for any ethical reason or anything like that.