Custody problem solved: centralized and insured

[Comeacross]

While we are still here, another one just happened.

Bitget exchange got hacked. About $351m worth of crypto stollen. The CEO confirmed the incident on X formerly Twitter Here

The interesting line?

Withdrawals temporarily suspended as a precautionary measure, pending security review

These platforms can freeze your account today and not give you an explanation until when they wish.

If someone else is writing the rules, is your money really under your control? I guess you know the answer already.

Let remove custody from the discussion as far as exchanges are concerned.

[MoparMiningLLC]

Centralized and insured defeats the purpose of Bitcoin.

The purpose of Bitcoin is to make an investment in Bitcoin at a lower price and then sell it at a higher price, thus reaping a profit.

People used to use it a lot for illegal stuff, but they have mostly switched to Monero for that, or so I've heard.

custodied funds should be treated 100% as lost funds - if you do not hold the keys yourself, then it is not your funds.

Custodied funds are stored under your name, which cannot be taken away from you.

The only reason your house or your car is yours to use is because there are documents with the government saying it's yours.

no - the point of Bitcoin is to be money and to make a person responsible for their own finances. Those who see it purely as an investment are not Bitcoiners. Custodied funds - fiat or Bitcoin - can be seized and taken. One should hold the keys to their funds not someone else.

If you do not understand that, then I don't have the time to explain it to you.

[legiteum]

Bitget exchange got hacked. About $351m worth of crypto stollen. The CEO confirmed the incident on X formerly Twitter

Yes, there are shady CEXs out there, which is why you need to choose one that is established, and has insurance.

That said, none of the users of that CEX were killed, tortured, or had their loved ones threatened--unlike what can happen if you use self-custody.

no - the point of Bitcoin is to be money and to make a person responsible for their own finances. Those who see it purely as an investment are not Bitcoiners. Custodied funds - fiat or Bitcoin - can be seized and taken. One should hold the keys to their funds not someone else.

If you do not understand that, then I don't have the time to explain it to you.

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide  .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

[BlackHatCoiner]

Today Bitcoin is used almost entirely as a meme investment instrument.

What is considered a meme investment? An investment is when you put your money into something, in the hopes that more money will come out over some period of time, with a certain risk that is often unknown, and you think the reward is worth the risk. By that definition, a meme investment is clearly something subjective that has to do with how you comprehend reality and investments, and not something that has to do with the properties of Bitcoin as an investment.

[MoparMiningLLC]

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide  .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

I feel it is to teach people to hold their funds instead of trusting banks and financial institutions. And there are more than 47 users who are responsible hodlers of their own Bitcoin... you know that right? lol

if self-custody is done correctly it cannot be seized. Maybe it can be given up but not seized without the owner allowing it.

[legiteum]

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide  .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

I feel it is to teach people to hold their funds instead of trusting banks and financial institutions. And there are more than 47 users who are responsible hodlers of their own Bitcoin... you know that right? lol

Yes, but only 47 of them use Bitcoin as a means of teaching themselves something (probably less than that, actually).

The other 99.999% of Bitcoin holders hold it to... make a profit.

if self-custody is done correctly it cannot be seized. Maybe it can be given up but not seized without the owner allowing it.

LOL, "given up" versus "seized". Okay.

The words don't matter: a government can get your Bitcoin if they want your Bitcoin and they know where to find you, just like they can get your car, your house, your collection of rare baseball cards, or whatever.

If you want to make a case that Bitcoin is easier to hide from the cops if they are after you, then maybe that could be, but most people don't live their lives afraid of the police taking their money. If that's what Bitcoin was really used for exclusively, there would be 99% fewer Bitcoin holders...

And if you are saying that Bitcoin's primary purpose is to hide money from the police, then... you are agreeing with Bitcoin's most consistent naysayers...

[coinlary]

Sometimes, I enjoyed reading some of your post while sometimes I feel like just hitting the ignore button because it feels like you're beign sponsored but neither do I  want to start missing all your post .

We don't need to agree in order to be entertained...  

src= imgflip.com

Bitget exchange got hacked. About $351m worth of crypto stollen. The CEO confirmed the incident on X formerly Twitter

Yes, there are shady CEXs out there, which is why you need to choose one that is established, and has insurance.

That said, none of the users of that CEX were killed, tortured, or had their loved ones threatened--unlike what can happen if you use self-custody.

It surprises me that you don't  think they can kidnap and force people to enpty their custodian wallets just to save themselves or their relatives while still torturing  and even killing victims ?
You're acting like it's kind of totally immune to such

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide   .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

I feel it is to teach people to hold their funds instead of trusting banks and financial institutions. And there are more than 47 users who are responsible hodlers of their own Bitcoin... you know that right? lol

Yes, but only 47 of them use Bitcoin as a means of teaching themselves something (probably less than that, actually).

The other 99.999% of Bitcoin holders hold it to... make a profit.

So far, they are holding it the right way. They are supporting the great cause and in one way or the other, they are forced to learn something. But does it mean that because they want to learn, they shouldn't care about the profit ?

[legiteum]

Bitget exchange got hacked. About $351m worth of crypto stollen. The CEO confirmed the incident on X formerly Twitter

Yes, there are shady CEXs out there, which is why you need to choose one that is established, and has insurance.

That said, none of the users of that CEX were killed, tortured, or had their loved ones threatened--unlike what can happen if you use self-custody.

It surprises me that you don't  think they can kidnap and force people to enpty their custodian wallets just to save themselves or their relatives while still torturing  and even killing victims ?
You're acting like it's kind of totally immune to such

Not immune, but highly resistant. Any kind of custodial solution is another headache that most criminals don't want to deal with. They often have withdrawal limits and extra security checks, especially for higher-value transactions, and ones that look like it's a full-draining operation.

Finding somebody with a hardware wallet is way, way easier for a criminal.

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide   .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

I feel it is to teach people to hold their funds instead of trusting banks and financial institutions. And there are more than 47 users who are responsible hodlers of their own Bitcoin... you know that right? lol

Yes, but only 47 of them use Bitcoin as a means of teaching themselves something (probably less than that, actually).

The other 99.999% of Bitcoin holders hold it to... make a profit.

So far, they are holding it the right way. They are supporting the great cause and in one way or the other, they are forced to learn something. But does it mean that because they want to learn, they shouldn't care about the profit ?

No, they aren't forced to learn anything at all. They just get Robinhood and click on "Bitcoin". Any idiot can figure that out in two minutes and never learn another thing after that besides the word, "Bitcoin".

[MoparMiningLLC]

ROFL. If the purpose of Bitcoin was, "to teach people to be more responsible", it would have about 47 users worldwide  .

And self-custodied funds can be sized and taken as well, so I'm not sure what the point was there.

I feel it is to teach people to hold their funds instead of trusting banks and financial institutions. And there are more than 47 users who are responsible hodlers of their own Bitcoin... you know that right? lol

Yes, but only 47 of them use Bitcoin as a means of teaching themselves something (probably less than that, actually).

The other 99.999% of Bitcoin holders hold it to... make a profit.

if self-custody is done correctly it cannot be seized. Maybe it can be given up but not seized without the owner allowing it.

LOL, "given up" versus "seized". Okay.

The words don't matter: a government can get your Bitcoin if they want your Bitcoin and they know where to find you, just like they can get your car, your house, your collection of rare baseball cards, or whatever.

If you want to make a case that Bitcoin is easier to hide from the cops if they are after you, then maybe that could be, but most people don't live their lives afraid of the police taking their money. If that's what Bitcoin was really used for exclusively, there would be 99% fewer Bitcoin holders...

And if you are saying that Bitcoin's primary purpose is to hide money from the police, then... you are agreeing with Bitcoin's most consistent naysayers...

I dont know about 99.99 holding it - there are quite a lot of people (considerably more than 47 ) that are using Bitcoin on a daily basis. Our entire business operates on Bitcoin - and I know more than a few dozen others that do as well.

I use Bitcoin only - I have no bank accounts - I have no IRA - no stocks - no cash - just Bitcoin.  If someone does not take Bitcoin - I pay with my Gemini credit card (only credit card I have) and then pay the Gemini bill directly with Bitcoin. I have done this since 2023.

Those who do not use it and simply hodl it have missed the point. It was designed and intended to be used as money.

as for "given up" there is nothing the govt can do to force me to give up my Bitcoin - I don't hold one sat on any custodial service.


I think we are just going to have to agree to disagree.

[BlackHatCoiner]

Those who do not use it and simply hodl it have missed the point. It was designed and intended to be used as money.

The notion that money is exclusively a medium of exchange and nothing else is a 21st century thing, when fiat predated. Money serves two roles, storing the value of your labor, and being widely accepted as medium of exchange. I'd argue that "good money" is money that primarily serves the former, because even if it's not widely accepted, you can still protect yourself from inflation by just selling the good money for bad when needed.

Bitcoin was also intended to protect you from inflation.

Announcing version 0.3 of Bitcoin, the P2P cryptocurrency!  Bitcoin is a digital currency using cryptography and a distributed network to replace the need for a trusted central server.  Escape the arbitrary inflation risk of centrally managed currencies!  Bitcoin's total circulation is limited to 21 million coins.

[legiteum]

I dont know about 99.99 holding it - there are quite a lot of people (considerably more than 47 ) that are using Bitcoin on a daily basis. Our entire business operates on Bitcoin - and I know more than a few dozen others that do as well.

Sure, but that doesn't mean they use it "in order to learn something". They use it because they are forced to for some reason.

I use Bitcoin only - I have no bank accounts - I have no IRA - no stocks - no cash - just Bitcoin.  If someone does not take Bitcoin - I pay with my Gemini credit card (only credit card I have) and then pay the Gemini bill directly with Bitcoin. I have done this since 2023.

ROFL

Oh my god, really? Do you not understand that this is absolutely no different than using a normal bank? That Gemini is... a normal bank that fully tracks everything you (the real, personally-identified you) do?

You gain no benefit in using Gemini over using an ordinary credit card in terms of personal privacy. Using it exposes you to all of the privacy issues any credit card would. That it has a (virtual) balance of Bitcoin within it is immaterial.

Bitcoin has taught you nothing! 

[Btcdeybodi]

Self-custody has always been a bad idea for the simple reason that most people are not security experts, they do not live their lives in a high security context, and most importantly they do not want to. What good is having more money when that money diminishes your lifestyle? Living in constant fear that you may accidentally lose your life savings, or that you may be beaten or killed because of that savings is no way to live. If you have to wake up every morning and check to make sure your self-custody product(s) are still secure, your life is diminished.

I don't know how you came up with the knowledge that self custody is a bad idea. Apart from people that lost their seed phrases and those who exposed their wallets to scammers, i haven't really heard that a wallet that has private keys got hacked, i may be wrong but even if it happens, it's doesn't happen all the time. No matter how your try to degrade the use of self custody wallets, it is still a safe place to have secret keys to your bitcoins.

Why do you need to leave your finances in the hands of insurance company when you can hold it yourself? Perhaps it requires a lot of paperwork to make claims of which it can take you a longer time for your money to be recovered.

PS: I know you will want to come for a debate but am not avaliable for that today.

[Rabata]

Self-custody has always been a bad idea for the simple reason that most people are not security experts, they do not live their lives in a high security context, and most importantly they do not want to. What good is having more money when that money diminishes your lifestyle? Living in constant fear that you may accidentally lose your life savings, or that you may be beaten or killed because of that savings is no way to live. If you have to wake up every morning and check to make sure your self-custody product(s) are still secure, your life is diminished.

If someone loses bitcoins in self-custody due to their own weakness or ignorance, the custody is not responsible, but the person who was unable to use the facility is. Moreover, a single wallet failure will never be considered a threat to all wallets. It is certainly wrong to say that if one wallet is hacked, the entire self-custody system will be hacked.

Since Bitcoin is the most volatile, insurance companies will not be interested in taking insurance against it, and even if they do take insurance, there will be many conditions that will definitely be difficult for the investor to accept. If the insurance companies refuse to pay their insurance money as conditions due to hacking or bankruptcy of the exchange, then there is no logic in taking that insurance.

If you have to take the help of a third party to use Bitcoin, there is no need to use Bitcoin. Of course, I think there is no alternative to self-custody. If you want to use and hold Bitcoin as you wish without relying on third party, there is definitely no alternative to self-custody.

Those who want to hold Bitcoin for the long term, if they use a hardware wallet and store their seed phrase and keep private key properly in offline, then it is definitely the safest for them to hold Bitcoin. Since the original purpose of Bitcoin's creation was to rely on its decentralized system where everyone will have the benefit of money transactions without the help of any third party. If someone does not use self-custody, then he will be deprived of the benefits of Bitcoin's decentralized system.

[Justbillywitt]

That said, none of the users of that CEX were killed, tortured, or had their loved ones threatened--unlike what can happen if you use self-custody.

Let me ask you, if a user who stored all his assets in Bitget, because according to you that self custody is bad, that people should embrace centralized storage. Let’s assume the person got the news that Bitget has been hacked where he stored all his funds. Due to the news of the hack, he got shocked, slumped and died. Who do you think killed him? You don’t necessarily need to shoot people with gun or torture them physically to kill them. You can kill people by your actions. So this your point does not in anyway justify centralized storage of assets.