Why use decentralized bitcoin in a centralized way?

[oktana]

To use bitcoin the decentralized way, you simply have to ensure that you’re the only one who has access (private key or mnemonic phrases) to your Bitcoin. It’s that simple. For those who use decentralized exchanges, one of the reasons is how easy it is to use but the smart ones know that decentralized exchanges are only used to trade (buy or sell) and not to store Bitcoin. And for those who use Bitcoin bank i honestly don’t have any clue what’s going on in their head. Lol

[Ben Barubal]

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?

     You know, at first I had the same view, but later I also realized that it is not bad to use a centralized exchange platform. It's up to us whether we trust it or not. Because if you tell yourself that the centralized-based system is not safe, why do many communities in this field use CEX, and it's okay for them to submit KYC as well? 

     Yes, in DEX there is no KYC needed; we are really in control. It's just that when it comes to the release of profit from DEX, he has a bit of a hassle and there are many third parties to go through. And I also don't see any p2p features in DEX, or if there are only a few of them, unlike the CEX platform, which is especially the top exchange in the market for p2p transactions.

[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. 

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.

What I mean when I say grow is not just about the price but also adoption. The adoption is just not going to be fast-forwarding if the regulation is too tight to almost ban BTC like China.

But because of regulation and platforms allowing people to buy BTC and bank payments started the adoption. I remember I sold my coins to a platform and have go go to a bank to withdraw fiat.

[fauzan Ichsan]

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.

What I mean when I say grow is not just about the price but also adoption. The adoption is just not going to be fast-forwarding if the regulation is too tight to almost ban BTC like China.

But because of regulation and platforms allowing people to buy BTC and bank payments started the adoption. I remember I sold my coins to a platform and have go go to a bank to withdraw fiat.

Indeed, these things are interrelated, where the higher adoption growth opens up opportunities for price increases, however, from a functional perspective, adoption seems to be slow, because it is limited. like in my country where it is only allowed to trade and invest, as if it cannot be used for real life, but this is better than being prohibited or having more stringent rules, at least we can make money here

[Iranus]

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.

Bitcoin is money, asset, people who are using bitcoin in a decentralized way are people who value money above all else because they want to keep their money as private as possible. Those who prefer to use centralized exchanges because they don't care about privacy, they like simplicity and convenience. And both of these types of investors value money and all care about money, if they didn't care about money, they wouldn't invest in bitcoin.

You're right, no matter how strict and harsh the government is, there will always be a solution for us to use bitcoin in a decentralized way, the problem is whether we want it or not.

[Ruttoshi]

Bitcoin is decentralized but who cares about that, since we all have our reasons of buying bitcoin. It is left for whoever is using bitcoin to use bitcoin in a decentralized or a centralized way. Bitcoin has given you the opportunity to be your own bank, and whoever cannot be their own bank can go ahead to keep their bitcoin wherever they want.

Some people that are new to bitcoin or cryptocurrency don't even know that exchanges are not good for them to store their coins. I have a friend that never knew about a self custody wallet until I told him, he has being storing his coins in an exchange all this while.

Centralized exchange has the local currency of so many countries but Decentralized exchange does not have, this is another reason why people love using centralized exchange for easy trade from fiat to bitcoin and vice-versa.

[legiteum]

To understand why people do this, you need to understand The Anon Paradox which says that people want anonymity for "small" money and personal identity for "big" money.

In other words, for the spending cash in their wallet, people want to be able to spend that anonymously for relatively small transactions.

For major items like a car, a house, or one's life savings, people want that to be attached to their name so they could never lose it by accident or theft.

And most people do not want to guard their own major wealth, nor would they be anywhere near as effective as professionals in doing so.

Under this principle, blockchain-based cryptocurrencies get the consumer market exactly backwards: they are only suitable, technologically speaking, for very large transactions and holdings, and not suitable for the "small" money that one keeps in their wallet because transactions are slow and expensive by design.

The other problem is that most consumers don't want the kind of "privacy" that Bitcoin offers, which, without the use of a mixer (which most do not use), is no privacy at all since transactions are all available publicly. And for products like Monera, most consumers don't want privacy from government subpoenas, because they don't think they are criminals or don't want to tangle with their government.

Hence, today Bitcoin is used in a mostly centralized way as essentially a meme investment instrument.

In the future, pure centralized digital currencies like Haypenny currencies will become more popular than blockchain because they offer the product that consumers actually want.

[Dr.Bitcoin_Strange]

You can use Bitcoin in a decentralized way if you don't interact with centralized platforms that require you to carry out KYC verification before you can buy and withdraw your Bitcoin. Most times, something can actually be designed to have one pattern of user case, but changes can take place and result in others using the thing. If you want to protect your privacy while using Bitcoin, then you should purchase your coins only on decentralized exchanges and also spend those coins on decentralized platforms. 

Bitcoin was created for everyone, but it's not everyone that must use it; most people still prefer to use fiat and also to save their money in the bank, and perhaps bitcoin is not a legal tender in every country, people still need fiat money. 

[CryptopreneurBrainboss]

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.

People love to stick to what they know and has been working for them, you don't expect people to just change from their old habits overnight, it'll eventually happen but it'll take sometime. The idea of using centralized platforms is because people don't want responsibility for their finances but still want to benefit from investing in Bitcoin. The owners of those centralized platforms are taking advantage of our ignorant to enrich their pockets. If you asked the average investors of Bitcoin, they have used a centralized exchanges as some point and there's nothing wrong in doing that but exchanges should only be used for the purpose they were created for and not being used as a wallet for storing of our cryptos.

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 very possible to achieve, use a non constodial wallet and make use of only decentralized exchange or P2P exchanges. The only price I think you have to pay is paying a little bit extra when you're making a transaction because this platforms aren't that popular yet and at such have very little liquidity which might make transactions going on, on the exchanges to be expensive. You also have the power over your finances so you're incharge of protecting your funds. Scammers might also be numerous but if you're very cautious, you should be fine and be able to use the decentralized exchange without much challenges.

[Onyeeze]

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?

not all digital currency that is decentralized but cryptocurrency mostly Bitcoin is decentralized currency and the government have been emphasizing on a way that they will make a cryptocurrency mostly bitcoin to be a centralized currency, but what makes bitcoin to be unique today is because it is been decentralized and the government does not have any power to control it market price and when looking at it you can see that what makes it to be decentralized is the unique nature of Bitcoin, for me I know quite well that currently what makes Bitcoin to stand firm today is base on its a decentralised one, assuming is a centralized currency it wouldn't have any effect worldwide.

[yudi09]

-snip-

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.

Such an assumption is actually good because it is in accordance with the fact that Bitcoin is a safe choice because full control is owned by the owner. Banks don't. The money there belongs to them even though we are the ones who deposited or saved it.

Banks offer interest while every month our savings are deducted for many reasons.
Not to mention the complicated system that involves their use of our money.
Furthermore, when we want to do something with our money, it gives the impression that it belongs to those who we cannot manage as we wish.
Then, Bitcoin as money of freedom must be agreed upon.

[Ale88]

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?

The centralized exchanges are just one way to get bitcoins but that doesn't mean that you need to keep them there, actually nobody will ever suggest you to keep your bitcoins on exchanges. For many people CEXs are the easiest and safest way to buy bitcoins, that's it. If you prefer to buy bitcoin on DEXs or by someone on the street, you are free to do that. Simply not everyone is willing to go for the most complicate route. You talk about being your own bank: as soon as you move your bitcoins from a CEX to your wallet you're good, at that moment you are your own bank.

[kotajikikox]

What I mean when I say grow is not just about the price but also adoption. The adoption is just not going to be fast-forwarding if the regulation is too tight to almost ban BTC like China.

I understand your point. Some people use bitcoin only for investment and nothing else and as long as they get to do that, they wouldn’t care about the regulations. Even if it meant that it would strip away bitcoin’s decentralized nature. Some other people though greatly value their privacy and really believe in the fundamental principle of bitcoin that allowing the government to control and regulate bitcoin is something they can not and will never accept.

[darewaller]

Personal preference? I mean this is the type of thinking that doesn't understand what decentralized means at all, not even remotely. Like a million people mentioned before me in history, decentralized doesn't mean anything about price or ownership, it means control.

Meaning that just because we put our money into Binance, doesn't mean that Binance can print more bitcoins, there are 21 million of it and won't be any more, there aren't any organization that can revert the chain back, there aren't any that can move it another direction as they want, there aren't any that can increase the block size just because they want to without our consent. That's decentralized, our money being used in binance or whatever is not what decentralized means.

[khiholangkang]

To use bitcoin the decentralized way, you simply have to ensure that you’re the only one who has access (private key or mnemonic phrases) to your Bitcoin. It’s that simple. For those who use decentralized exchanges, one of the reasons is how easy it is to use but the smart ones know that decentralized exchanges are only used to trade (buy or sell) and not to store Bitcoin. And for those who use Bitcoin bank i honestly don’t have any clue what’s going on in their head. Lol

Yes it is that simple, but most bitcoin owners today prefer to use centralized exchanges to store their assets because the purpose is to trade, the few people who may have touched decentralization are those who are already well informed about bitcoin itself, and old investors will definitely use wallets that they constrain themselves, unlike new investors who will definitely use CEX to store their bitcoin and like bitcoin Spot ETFs, they trust their bitcoin to third parties rather than themselves because they may not understand how decentralized bitcoin works.

It is only a matter of time, when many third-party exchanges go bankrupt, that many will understand where to exchange and store their bitcoins.

[oktana]

To use bitcoin the decentralized way, you simply have to ensure that you’re the only one who has access (private key or mnemonic phrases) to your Bitcoin. It’s that simple. For those who use decentralized exchanges, one of the reasons is how easy it is to use but the smart ones know that decentralized exchanges are only used to trade (buy or sell) and not to store Bitcoin. And for those who use Bitcoin bank i honestly don’t have any clue what’s going on in their head. Lol

Yes it is that simple, but most bitcoin owners today prefer to use centralized exchanges to store their assets because the purpose is to trade, the few people who may have touched decentralization are those who are already well informed about bitcoin itself, and old investors will definitely use wallets that they constrain themselves, unlike new investors who will definitely use CEX to store their bitcoin and like bitcoin Spot ETFs, they trust their bitcoin to third parties rather than themselves because they may not understand how decentralized bitcoin works.

It is only a matter of time, when many third-party exchanges go bankrupt, that many will understand where to exchange and store their bitcoins.

I am not sure of them going bankrupt. Unless mismanaged, they should be making huge amount of money. For instance, Binance has made a lot of money so much that they do charity. They charge fees for trades and transfer and some listings and many other things. So, they may not go bankrupt for people to learn better. Issues that can make them learn better may be being locked out of your account probably because of server issue or any technical error. Then maybe they will probably see why it’s best to manage their assets themselves.

[Solosanz]

To use bitcoin the decentralized way, you simply have to ensure that you’re the only one who has access (private key or mnemonic phrases) to your Bitcoin. It’s that simple. For those who use decentralized exchanges, one of the reasons is how easy it is to use but the smart ones know that decentralized exchanges are only used to trade (buy or sell) and not to store Bitcoin. And for those who use Bitcoin bank i honestly don’t have any clue what’s going on in their head. Lol

Honestly there's nothing wrong to hold your coins in decentralized exchange, but make sure it's a real decentralized exchange in the first place!

The real decentralized exchange is bisq, it's better to hold there rather than hold in centralized exchange. Bisq has no central server, even government shutdown the site, we can still access our wallet and the exchange.

And wait... what's exactly "Bitcoin bank"?

[Filippo Spina]

Never makes sense to me when I see people using bitcoin in a centralized way.

Why are you letting cashapp hold most of your btc?
Why are you letting FTX hold most of your btc?

Where is your ledger?

Self-custody is a right for everyone, but no one said it was easy. It takes practice, consistency, routine, time management, and above all else mental clarity.

[0t3p0t]

We use decentralized Bitcoin in a centralized way because we cannot use exchanges that are compliant to the local laws due to the regulations being implemented so we are forced to do KYC as we are using their services and that us how I think it works.

[dzungmobile]

We use decentralized Bitcoin in a centralized way because we cannot use exchanges that are compliant to the local laws due to the regulations being implemented so we are forced to do KYC as we are using their services and that us how I think it works.

Regulation is main reason but some other factors like limited noKYC exchanges, DEX and their lower trading volume as well as less trading pairs and barrier to switch fund from Bitcoin to other cryptocurrencies are other reasons.

Bitcoin maximalists will not care about altcoins and they can feel fine with DEX, no KYC exchanges. Majority of the crowd do mixed actions with Bitcoin and altcoins then any exchange, KYC or no KYC, will not be their favorite if they can not be given different pairs to switch fund around.

Now, it is favorite and personal choice but in future, with more regulations on KYC and DEX, what will we have?