Why use decentralized bitcoin in a centralized way?

[Floxynice]

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?

[Hatchy]

Decentralization is a feature introduced with Bitcoin, allowing anyone to fully control their coins. You have the option to use Bitcoin in a centralized or decentralized manner. But it's important to note that Bitcoin was originally intended to be decentralized. Satoshi's primary goal in creating a decentralized currency was to empower users to act as their own banks, keeping their funds independent of governments or centralized entities. Despite this, many Bitcoin users today store or transact through centralized entities.

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 not difficult to achieve mate, all you have to do is stay away from any centralized body. It's your choice and there's no price to pay. Not everyone will move to centralization as Bitcoin is meant to be decentralized.

[Cookdata]

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.

[The Hidebehinder]

Fear and the issue of not trusting themselves and their knowledge with the amount held.

Happened to me when I had a pocket full of cash from a sale and I immediately rushed to an ATM to deposit it to my account rather than going around with what was one year and a half of rent money and I don't see it being that weird for users who are afraid of viruses, that lack technical knowledge that don't trust their roommates and many more cases to feel better knowing the coins are in somebody's else care, despite making the mistake of confusing a Cex that might be run like FTX was with a bank that at last is FDIC insured.
It's not the way it should be but blaming somebody for choosing the easy way of escaping responsibility it not either either, I have done thousands of tx so much that my wallet started freezing my computer when loading and I still triple check every address, every fee, the messages with the client, and so on, some guys would simply not want that stress.

[thecodebear]

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 can do anything you want. Bitcoin by default allows you to hold your own money. There is no club you have to join haha. You just send your bitcoin to your own address. That's it.

People use centralized services because they are used to them and care more about convenience that taking full advantage of Bitcoin, or for a lot of people they don't even know you can store bitcoin yourself. But in general most people are gonna choose convenience, so it is no surprise that lots of people choose to keep their bitcoin with custodians rather than do the little bit of effort to make a bitcoin key-pair and send the transaction, and then keep their private key safe and secure. As more and more of the general public buy Bitcoin, more and more people are going to be using holding their bitcoin with custodians rather than themselves.

We can educate people all we want, but most people are still gonna choose convenience of 'banking' their bitcoin with an institution, even if its not particularly smart or safe. All you can do is decide what is best for you, so just make an address and send your bitcoin to it and you're done.

[mk4]

There will always be people that will use/hold BTC in a centralized custodian, period. Especially those who don't have the technical knowledge to secure their own coins via self-custody(mostly old people), and those who are going to declare their holdings to the IRS anyway so they hold the BTC through ETFs instead to decrease complexity with taxation.

What's important is that we have the option to hold via self-custody; regardless what other people think.

[albon]

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.

[btcinfo891]

I can think of the following reasons why users prefer centralized services

• Arguably centralized services are easier to use.
• In some cases centralized services have lower fees when transferring crypto between user accounts in the same platform.
• Almost always centralized services have lower latency when transferring crypto betwen user accounts in the same platform.

For new users the first point (easier to use) is what attracts them to centralized services.
For some experienced users (e.g. daytraders) the second and third points (low fees, low latency) is crucial.

[ranochigo]

There is an assumption that Bitcoiners wants decentralization. That is false, most of them are in it for the money unfortunately. When you're in it for the gains, you think less about the other intrinsic benefits that Bitcoin offers.

Pin this on the centralized services because that is the first point of contact for many and they stop right there. If you truly want them to take control of their own funds, we have to abandon the regulations and the licensed exchange and services. We all know that is not happening anytime soon.

[peter0425]

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

Are you actually hoping to find one? Because there are multiple platforms that talk about bitcoin just like this forum for example. But there’s no clear separation between those who use centralized exchanges or wallets between those who use decentralized exchanges or wallets. It’s just all a matter of preference and there’s no judgement between others since we all need and want different things.

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?

Nope. lots of us still think that decentralization is something that is offered and thus shall be taken. However these times, the government is keen on observing bitcoin and trying to make it as centralized as possible

[Sebas.tian]

I think, everybody have their own different ways of holding Bitcoin to ensure they are making progress in the industry, but those countries that made Bitcoin legal tender use Bitcoin in a decentralized way, because their government is not against it. But if your government is against using Bitcoin in a decentralized way, it will make you to lose all your Bitcoin when they find out that you are using Bitcoin in a decentralized way which is against the law of the country.  Since Bitcoin is not yet legalize in my country, I use Bitcoin in a Centralized way by converting my Bitcoin into fiat money before I will be able to purchase what I want in the country because Bitcoin is not a legal tender in my country for Bitcoin users to use it in a decentralized way.

[Helena Yu]

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?

Is it only you or you're also forcing other people to use Bitcoin in decentralized way? if it's only you, sure you can do anything that you want. But if you're forcing other people to follow what you do, it will drain your life since each person has it's own need.

The reason why most people choose to use decentralized exchange is the trading fees is cheap, you only need to pay 0.1% in centralized exchange, but you need to pay miner fees when you trade in decentralized exchange which cost around $0.5 or more.

The prices to pay people to use decentralized exchange is the money, they don't want to lose their money due to miner fees.

[davis196]

The people are using centralized crypto exchanges mostly because it's convenient. Actually the crypto day traders are the main customers of crypto exchanges. If you aren't a day trader, there's no point to use such service. I don't care about altcoins, so I haven't used a crypto exchange in the last 2 or 3 years.
If you have small amounts of BTC, just setup Electrum wallet on your PC. If you have big amounts of BTC, just buy Trezor or Ledger.
Nobody is forcing you to use centralized services, but buying BTC from a centralized crypto company is a little bit more convenient than dealing with strangers on the P2P crypto markets.

[tbct_mt2]

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.

Decentralization of Bitcoin has nothing to do with control or non-control of bitcoins for Bitcoin holders. It more relates to private keys/ mnemonic seeds.

If people use good wallet softwares, to create their wallets and by this get private keys, they will have control of their coins. If they use bad wallet softwares or use online accounts to store their bitcoins but don't have access and control of private keys, they don't actually control their coins.

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.

Centralized platforms are built and provided for people who want convenience and don't want to learn basics to secure their money better. There are always people who want to get convenience and forget or don't care about security and safety.

But safety, security should be first considerations for all.

Now, as the day passes, more bitcoiners are becoming centralized.

I believe you only thought the fact is like this, believed it like this and I believe you did not write it base on any on chain information.

[Richbased]

A lot of people have different purposes of owning Bitcoin, some want to accumulate and convert to fiat, while some want acquire it and hold as many as they can and possibly use it as a medium of exchange in the future when Bitcoin must have possibly been adopted by a lot of people whereby you can transact with one another without congestion in mempool or high transactions fee.

Though the main reasons for inventing Bitcoin is to stand as a decentralized medium of digital transactions without interference from the government banks and other third party companies but however, you can't control the choices of everyone. Everyone is entitled to what/how they want to go about with their Bitcoins.

[kro55]

Stop caring about how other people use bitcoin, where they store it, and what they use it for...because everyone uses it differently. You just need to use bitcoin the way you think is best for you, that's all.

We all know that bitcoin is decentralized and it is not owned by any individual and Bitcoin is for everyone. So why do we spend time caring about how other people use bitcoin, why criticize them if they don't use bitcoin like us, what right do we have to do that? It's their bitcoin, let them use it their way, and we just use it our way.

[Zlantann]

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.

These centralized platforms make Bitcoin transactions convenient that's why people use them. In some areas, one might not find a reliable decentralized P2P platform that makes these exchanges important. People are also attracted to these centralized platforms because they invest money do a lot of advertisements. Some people don't even know much about decentralized wallets because they believe that these exchanges are the only means of hodling or trading Bitcoin.

Is there a club or group of only people who use 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?

Bitcoin promotes privacy so you might not find a club or organization where only decentralization maximalists converge. But you can locate such people in the forum who share the same ideology. Some members have never done KYC in any exchange because they have devised means of exchanging their coins. In this era where the government is enforcing KYC in almost all crypto-related service providers, it will be hard to avoid this centralized platform. But there are still some decentralized exchanges like Bisq that can help you achieve your goal.

[btc78]

Decentralization has privacy at its core. I am sure people who use or hold bitcoin or other cryptocurrencies in decentralized platforms are very appreciative of their privacy so I don’t think you’ll find an exclusive platform just for them. Many of them wouldn’t even let you know that they in fact hold some bitcoin.

Nevertheless, if you prefer decentralized platforms there’s no need to ask other people about it or try to pursue others. I’ve always thought investing as a subjective approach which is why we should always be making decisions for ourselves.

[tranthidung]

Decentralization has privacy at its core. I am sure people who use or hold bitcoin or other cryptocurrencies in decentralized platforms are very appreciative of their privacy so I don’t think you’ll find an exclusive platform just for them. Many of them wouldn’t even let you know that they in fact hold some bitcoin.

Bitcoin is a public blockchain with a public ledger so that everyone can check past blocks and transactions. It is not a private blockchain like Monero and there is no absolute privacy with Bitcoin blockchain.

The advantage is if you use a non custodial, open source wallets to create your wallet, offline, and don't share your public address anywhere else especially on Internet, nobody will know that you are owner of that address and nobody will know you own bitcoin.

It's very first step to gain privacy but next steps will be achieved by how you use UTXOs as inputs for sending transactions out and whether you use Coin control feature and changed addresses for receiving bitcoins from senders. It's a complicated procedure to secure your privacy and along the way, if you make mistakes, your privacy will be broken.

How to spend specific UTXOs in Electrum wallet

[yudi09]

-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.
The use of Bitcoin can also be used as an investment if the user desires this.

It's not difficult to achieve it. To do this, you prepare a wallet and get a public address as an address for receiving and sending. Then save the private key or seed phrase properly and make sure it is stored offline. Be careful in public spaces.

Keep learning about Bitcoin. We fully support your efforts.