[2018-12-11] ‘Proof Of Keys’ Wants You To Get Your Bitcoin Off Exchanges - Jan 3

[ruthbabe]

Cryptocurrency investor and entrepreneur Trace Mayer plans to use the anniversary of the Bitcoin genesis block to make holders reclaim their private keys.

MAYER TO BITCOIN HODLERS: RECLAIM SOVEREIGNTY

In a video introduction to the plan, which he dubbed ‘Proof of Keys,’ Mayer appealed to the Bitcoin community to remove all funds not under their direct control, specifically third-party exchanges.

“We’ve got lots of new people who have come into the community, and I think it’s important to declare and redeclare our monetary sovereignty on a regular basis,” he said in the video.

https://youtu.be/_bNk5g_S0ZA

AVOIDING YOUR ‘MONETARY ENEMY’

One of the longer-serving figures in the Bitcoin space, Mayer voiced repeated distrust of well-known industry businesses including payment processor BitPay, US exchange Coinbase and storage service Xapo.

Quoting a warning by Bitcoin Core developers about using such businesses to store private keys, he continued that taking back control had multiple benefits for “HODLers of Last Resort” beyond financial security.

Technical literacy, knowledge, and respect of network consensus laws and more, he contended, would help galvanize those who have chosen Bitcoin over fiat.

“Anyone who doesn’t want you to hold your own private keys or do your own network consensus – they’re your monetary enemy,” he continued.

While dubiously referring to those who successfully control all private keys as “elite,” Mayer’s January 3 summons comes at a time when exchanges continue to garner criticism over chosen business paths.

Coinbase, which saw a backlash over its initial refusal to support SegWit transactions, poor technical reliability and consumer support, this week was found to be the entity behind suspect transactions amounting to 856,000 BTC ($2.9 billion).

The product of “scheduled maintenance” developers had signaled would occur November 28, the transactions involved almost 5 percent of the entire circulating Bitcoin supply.

Reacting on Reddit, users subsequently lambasted the exchange over the move, which appeared to involve over one hundred “non-multisig, non-SegWit” addresses.


Source:  https://bitcoinist.com/bitcoin-proof-of-keys-btc-off-exchanges/

[buwaytress]

Except that we've got to realise that many (I want to say most, but okay benefit of doubt) people who own Bitcoin deliberately want to trust someone else to store their Bitcoin for them. Keeping your own private keys secure? Owning your own wallets? Deciding the fees you want and signing your own transactions? They shudder to think they want any responsibility for their own spending. A username and password is what they're comfortable with so they can always turn to some company in case something goes wrong. Judging from the number of people asking for help when they've lost their keys, I guess people just aren't ready for that kind of absolute control either.

I even actually tried convincing people to do just as Mayer says, but what can you do when people are enthused with custodial services and insurance-protected deposits? They're speculators in the end, fascinated by the markets. Nothing else about Bitcoin interests them.

[1Referee]

I even actually tried convincing people to do just as Mayer says, but what can you do when people are enthused with custodial services and insurance-protected deposits? They're speculators in the end, fascinated by the markets. Nothing else about Bitcoin interests them.

It's okay man. I tried to convince people around me of how important it is to take care of your own keys, but most of them are plain stupid and not worthy of my time. Suckers will keep using banks and whatnot because they don't know any better than having a centralized party reign over them.

The only way for them to realize how bad their crypto etiquette is, is to have an exchange implode in their face with severe losses as result. Only then will they think back at all the people who tried to explain them the importance of storing your own keys. It's just not enough seeing an exchange implode far away, they have to be sucked into an actual exchange hack scenario.

[Lucius]

At this point it is not possible that people withdraw all coins from exchanges/online wallets, for reasons already mentioned above. Ordinary users still believe in traditional value-saving methods and this is online services like Coinbase or any other exchanges. Is it just about simplicity of holding coins or there is also ignorance that this is only way to buy/hold cryptocurrency?

We can say those who are for some time in cryptoworld know about that saying : If you do not own your private keys, you do not actually have full control over your coins. For those who do not believe this is true, just start with Mt.Gox case and continue to investigate the cases afterwards.

However those who trade have a need to keep a part of their coins on exchanges for now, maybe in future trading will be possible by using much safer ways like directly trading from hardware wallets : Trezor users can now exchange in wallet (beta)

Coinbase, which saw a backlash over its initial refusal to support SegWit transactions, poor technical reliability and consumer support, this week was found to be the entity behind suspect transactions amounting to 856,000 BTC ($2.9 billion). The product of “scheduled maintenance” developers had signaled would occur November 28, the transactions involved almost 5 percent of the entire circulating Bitcoin supply.

If they announced it in advance why this should called suspect transactions? We had a chance to peek in procedures that Coinbase takes when it comes to security and I think they are at the highest possible level. Also here is some pretty good explanation what exactly happened during scheduled maintenance : Coinbase Might Be Behind Those 856,000 BTC Worth of Transactions 

 

[hatshepsut93]

A username and password is what they're comfortable with so they can always turn to some company in case something goes wrong.

But this is actually way worse than having own wallet, you take all the same risks of managing your wallet - risking of getting infected with malware that grabs your passwords, redirects you to malicious sites, etc; and then on top of that you risk an online wallet company vanishing with all your money. Also, online wallets have more attack vectors than software one's - weak passwords can be bruteforced, they can be broken if email/phone is compromised. Perhaps there is some merit in the idea of "crypto bank", for those who are too technically illiterate, but exchanges shouldn't be viewed as such, we need actual services for that.