Why use decentralized bitcoin in a centralized way?

[bittraffic]

In the early days of Bitcoin, I think some users were really up to keep Bitcoin as decentralized as possible. They seems to be outnumbered already and some are just shying away because users are becoming used to the centralization.

Maybe because the idea that Bitcoin will not grow with out the regulation of the government so we gradually get used to KYC already, we are now INSTITUTIONALIZED. 

[Gladitorcomeback]

There is no specific group you need to join or pay any money to use Bitcoin in a decentralized manner, all you need to do is find the right wallet and use that to hold and use your Bitcoin. The wallet should be a non-custodial one such as Electrum so that you can be the only one having access to your funds and there are no third parties involved. If you want more security for your coins, you should go for a hardware wallet because they tend to be safer than online wallets.

Choosing custodial wallets or centralized exchange platforms to keep your funds is a choice that some people make. They either don't know how to use a non-custodial wallet or they trust those wallets and exchanges too much that they feel completely safe when their coins or assets are stored with them, however, it isn't considered to be very safe for several reasons including hacks and exploits.

[EarnOnVictor]

-snip-
I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

This is your choice, my friend, no one is forcing you in any way. The situation where the decentralised Bitcoin can be used in a centralised way is to be using it through the arrangements of centralised establishments. The good news is that such can be avoided by strictly buying and holding, or selling your Bitcoin through a decentralised system and self-custory wallets. This is not a hard thing to do, you may Google them and you will be fetched with a lot of ideas and advice on how you can go about them.

As for those who are using the coin in a centralised way, well, I am one of them and you can't blame us for that. First, I have nothing to hide, second, the centralised system makes my Bitcoin management more dynamic. I can stake, trade, swap coins/tokens and do all kinds of business easily and cheaply with such an arrangement, which makes it better for me even as I also have some self-custody keeping, just to be safer.

[Synchronice]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

This is a very good post and I am glad there is a person who wants to use bitcoin in a classic way.
The answer to your question is that it's getting hard every day to be your own bank and keep privacy when using Bitcoin.

The first step is to buy an air-gapped hardware wallet, like Coldcard and Passport, then create a Bitcoin address and save seed phrases safely. If you want to buy Bitcoin, you better use decentralized exchange to keep your privacy more likely protected. Always try to use kyc-free services. This way, you'll be your own bank and you'll protect your privacy.

By the way, there is a price that you'll have to take and that's responsibility. When you have a total control, you also have the whole responsibility on your shoulders!

[Floxynice]

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Consider people who used Bitcoin in centralized platforms as lazy and ignorant users. Bitcoin itself is a freedom but people leave the freedom behind and chose after the value it add to them and as long money is made, they be like "who cares"?

The fact that the rest chose to ignore decentralization, that's there problem, you can choose your own way, run your own Bitcoin node, buy a hardware wallet and be your own bank and support the network by running the node 24/7, you are adding value to the network and those who chose to use the centralized entities can continue to hide their password from a place they don't even own the private keys.

I think I agree with your first paragraph. Bitcoin's value appreciates over time and many are just too comfortable with the fact that bitcoin can be profitable, nothing else matters.

Isn't running a bitcoin node time consuming? For someone who just wants to Be his own bank, can owning a non-custodial wallet alone serve same purpose?

[Z-tight]

Isn't running a bitcoin node time consuming? For someone who just wants to Be his own bank, can owning a non-custodial wallet alone serve same purpose?

Running a full node is great, but you can be your own bank without it. Running a full node gives you better privacy and security as you can verify everything locally, and you do not depend on third party nodes, it also means you are contributing to the security of the network. However, you can also run a pruned node, which would reduce the resources you have to spend.

You simply have to avoid custodial services to be your own bank, and also use self custodial wallets and p2p exchanges. That way you always have your own seed phrase and in total control of your funds.

[Plaguedeath]

In the early days of Bitcoin, I think some users were really up to keep Bitcoin as decentralized as possible. They seems to be outnumbered already and some are just shying away because users are becoming used to the centralization.

Maybe because the idea that Bitcoin will not grow with out the regulation of the government so we gradually get used to KYC already, we are now INSTITUTIONALIZED. 

People who're using Bitcoin in decentralized way are privacy oriented or value security over money, so they won't shift to centralized way. It just new people who interested with Bitcoin tend to choose centralized way since they lack of knowledge or they're money oriented person.

Nope, the idea of Bitcoin will still grow, no matter how strict is the regulation, there's always a way to get rid from centralization, check kycnot.me there are many no KYC sites.

[kryptqnick]

The op poses a valid and relevant question. Bitcoin is meant to be used in a decentralized way, but of course people have the freedom to turn to centralized solutions as well. Some use them because of lack of knowledge about noncustodial wallets. Others are interested in Bitcoin as an investment asset, so they don't really care about the ideas behind it. Also, there are those using exchanges or custodial wallets out of convenience, especially if they make a lot of transactions regularly.

[Abu-Naim]

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.

Sure, people are using bitcoin in centralized exchanges or in centralized ways which I think can only be involve in sharing of bitcoin within various wallet address.
While some bitcoin users are too careless to be using exchanges to store bitcoin which is not in line with decentralization, but they chose to keep their asset on the exchanges instead of sending them out after trading them in the exchange.

  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Yes, a lot of people here are using Bitcoin the Satoshi way which is taking full control of your Bitcoin and becoming your bank.

You can buy a cold storage wallet, or any non custodial wallets to store your bitcoin, but be mindful of your private key, learn how to save them well because the fear of losing private keys is the reason some people prefer using exchanges. If you can afford any physical bitcoin wallet, you can use an open source wallets like Electrum and Blue wallet for the main time before you can afford a physical wallet.

[blckhawk]

Because it's more convenient for those that don't have any kind of knowledge on the technicalities involving a more complex but decentralized way of doing transactions with bitcoin. That's the only reason why they do that plus most of them have a better service than decentralized exchanges because they've got billions put into their service to make it so they can cater to the people that are going to use their services. It's also much easier to buy your bitcoin there as there's close to no fees, the only downside is that it's not your coins anymore once you deposited your cryptocurrency there.

[Hamza2424]

Hmm, I cant get it, bro if you want to use Bitcoin in your control all you need is just a non-custodial wallet and store your Bitcoins there then you'll have all those access points which are demanding, I am not sure the numbers but on Bitcoin network, I'm sure mostly people hold their maximum Bitcoin in their custody yup, there is a large number of the user using the exchanges to store or trade their Bitcoins

Reasons:
 
Newbies
flexible trading access
Cost saving.

Still maximum number of Bitcoins are stored in their custody.

[jrrsparkles]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Well, that's the whole point of decentralization it is your money so use it as you wish whether you keep it in your wallet or prefer a custodial wallet.

I understand what you are trying to say but can you pay for Bitcoin when you are buying your groceries? Not yet.

So people who have their funds stored in bitcoin are forced to convert into fiat to pay for their needs.

[DubemIfedigbo001]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

It's your choice to tread the path that appeals to you the most, the most important thing is being in the know. Although I see centralized exchanges as just a marketplace where you can trade coins for other coins or for fiat, but some people have turned the exchange to a place for storing coins for a longer time. Bitcoin was created to give you power over your finances by using a decentralized approach to handling your funds, so it's your decision to remit such autonomous power to the mercy of an exchange which you have no control over and face the consequences if there becomes an unhappy ending.

its no news that funds kept in exchanges are yours only as long as the exchange deems you fit to have access to them, or as long as they are in full operation, but such cannot be said of decentralized wallets where you have access to your coins whenever you wish as far as you've your seed phrases and private keys. Funds that are left in exchanges are supposed to be those which would be needed within the shortest possible time and not for long term storage.

Most people keep the bulk of their funds in exchanges to escape transaction fees when they intend trading their coins, but its certain they pay a greater price when exchanges folds up, so its better to pay a little price and play very safe.

[GideonGono]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

Some are using the centralized wallets or exchange to hold their crypto, in order to save up fee when they want to trade it into Fiat, or earn by staking it, but we should always remember "Not your keys, not your coin".
If we don't have full control of it, then it is not ours and the risk to be hacked or something is always there, so it is better if we would put it on our own wallet.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

To be honest it is really easy to achieve you just need to have your own wallet, which is not part of any third party or exchange.

[Floxynice]

The concept of centralized exchange platforms is contrary to the decentralized approach in which Bitcoin was founded. Centralized platforms are considered like banks, with KYC and AML procedures and strict policies. They are the primary controllers of your assets and your private keys.

Although many decentralized Bitcoin wallets are available for free, the most secure are hardware (cold) wallets that are not connected to the internet and can be purchased for a fee. Custodial wallets, on the other hand, are not safe if the centralized exchange gets hacked, users' data is collected, and their privacy is compromised. However, CEX users might be inexperienced or not fully aware of what they are doing, prefer using features like P2P trading or other types of trading, or want to take advantage of the offers provided by these CEX platforms... These may be some of the reasons besides their laziness.

I quite agree with you. For people who are used to the traditional methods of safekeeping their monies, it can be quite difficult trying to learn the new banking method Satoshi introduced. I think it is better they stick to what they are comfortable with instead of making costly mistakes while trying out what they have no clue about.

[coolcoinz]

On one hand, OP is completely right about people making a mistake holding bitcoin on centralized platforms. ETFs are a great example of that centralized bitcoin.
I don't own any of that and I wouldn't put my coins there, even if they paid me 10% a year for doing so. I'm more concerned about my privacy and freedom and I will not put all my money at risk just to get 10% a year.

On the other hand, it's their mistake to make. If they find this risk worth taking, let them. It's their life and their money.

[kotajikikox]

-snip-

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Choosing to use Bitcoin means we want freedom over our money.
The freedom we get because we are in full control has its unique nature, so its use is very different from other payment systems.

Most people in here would consider bitcoin to be the safer option compared to centralized banks. Banks are very sneaky and has lots of mysterious fees. Not to mention the crazy interest they put on everything. It’s one of the many reasons why people was attracted towards bitcoin. The convenience of exchange as well as the privacy and anonymity it provides.

[Cryptoprincess101]

In the early days of Bitcoin, I think some users were really up to keep Bitcoin as decentralized as possible. They seems to be outnumbered already and some are just shying away because users are becoming used to the centralization.

Maybe because the idea that Bitcoin will not grow with out the regulation of the government so we gradually get used to KYC already, we are now INSTITUTIONALIZED. 

Seriously Bitcoin is moving away from it's purpose of invention because a lot of people now uses centralized exchanges instead of decentralized and non custodial wallets but I think people are afraid of the government that is why they still use centralized exchanges and they also feels that KYC makes the system more transparent since every users real data are stored in there but I believe with time people will start to know the need for a more decentralized system.

[Troytech]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

I think you might be getting some idea wrong here,
you  understand that exchanges and institutional systems has been introduced into bitcoin but they have a lso served a significant purpose that we can't neglect in the history of bitcoin, you should know that decentralized exchanges are still under development and have higher fees than the usual centralized exchange and for those users that tend to use the crypto space more for transactions can find this annoying to pay huge fees for ever transactions that they want to perform but with centralized exchange that process is easier and have lesser fees attached to them, this in turn while deviating a little from what satoshi envisioned it has also facilitated the use of bitcoin as a means of payments and in some way allowed some users to buy and sell bitcoin seamlessly and quicker than I should have been.

Also you know that a lot of investors are still skeptical about bitcoin and institutional bodies like ETFs has played a role in bringing those people into bitcoin under a common flag of safety and this has also helped bitcoin to continue to spread abroad in its own way.

And you are free to do what you want, you can decide not to use centralized exchanges at all, but either way a common ground has already been established from the past occurrence of centralized exchanges and how they can't be trusted, so yeah you can use them temporarily and use custodian wallet to store your crypto.

[romero121]

People want ease of access, and for that reason, people prefer centralized platforms. Bitcoin was innovated to eliminate the centralized authorities that take control over people's money. But the development that happened through the centralized network has made people get adopted to it and continue using it, even after understanding the negative parts of a centralized system.

When we use it in a decentralized way, the control will be in our hands. Even a small mistake could freeze the account or make us lose control over the assets, whereas with the centralized way of using, even if there's an issue, we'll have a support team to resolve it. This is the reason why most people prefer the decentralized asset to be used in a centralized way.

Multiple choices of access were provided, and for beginners, centralized exchange seems to be more user-friendly. This is also a reason why people prefer using centralized platforms. Another reason was the high liquidity and multiple asset pairings, which make trading and other options easier.