This conversation goes all the way back to Hal Finney, who suggested that banks could issue currency backed by Bitcoin reserves sort of like the Free Banking era of the 1800s. Lyn Alden points out that this is the basic structure of our money already. A base layer upon which successive layers lose hardness but gain flexibility. Venmo floats on top of Visa which floats on banks which float on the Fed which ultimately is grounded by US debt (Treasuries). Look hard enough into money and you see the whole world is just floating on top of US Treasuries. It's kind of mad.

So yeah, there's a good chance that future humans will rarely interact with real Bitcoin. Just like we don't pay for coffee with Treasury bonds, even if that's what ultimately is happening. The difference is that the base money layer would be a whole lot more solid with Bitcoin than it is with debt. But that's a whole other theoretical rabbit hole to go down.

That is way more streamlined than what I had planned. Brilliant.

The multi-vendor aspect is something I realized too. That's a downside of the passphrase option.

In a 2-of-3 multisig scenario: One key at home, second key in a bank vault, third at a distant trusted location.

It occurred to me, why not just use a geographically-distributed single key plus passphrase? Scenario: The single key at home, the passphrase in a bank vault, a backup of the key at a second bank, backup of the passphrase at the distant trusted location.

I can't see what multisig has over the passphrase. You can lose one location and still recover the wallet, just like a 2-of-3. Yet no one location has access to the funds. Theft/robbery/fire protection is the same. If the bank loses your safe deposit box you can still recover. You'll need two separate safe deposit boxes but so what, they're cheap.

What the passphrase does provide is a simpler learning curve for loved ones if you die. I'm trying to game out how to explain xpubs and descriptors and derivation paths to people who aren't technical. With singlesig+passphrase, there are fewer moving parts for family to access the funds.

Somebody poke holes in this. What's the benefit of multisig? What am I not seeing?