Cryptocurrency with an off switch.

[Obim34]

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

Still is, I mean, Bitcoin is still decentralized, it cannot be frozen on-chain when in a self-custodial setup.

Mind you, if you hold Bitcoin on a centralized platform, the platform reserves the right to freeze your account holding the coin, that doesn't mean Bitcoin stopped being decentralized, it was you giving them control over your Bitcoin. But if the coins (Bitcoin) are held in a non-custodial wallet, they cannot be frozen by any party, even if the funds are traced from an illicit source, only the owner has access to move their coin.

[osasshem]

The frozen funds are stable coins, and it's about half of the total funds the hackers stole, while the other half is gone into the hackers possession.
I think these whole things are put in place for the reason of security reasons, in situations like this. The part of the frozen funds being released is yet to be told, with high hopes that it will fall out well and those funds returned.

[maydna]

Bitcoin still decentralized but the party maybe not. But this gives us lessons that popular exchanges can get hack anytime so this should makes us carefully select the exchange. Never keep a huge funds on the exchange because anything can happen without we know. This should makes Binance realize that they must fix their security and strict it from the attacker. As a big exchange, they can still the target so no time to rest for a while because the hacker still watching and finding the next bug.

[buwaytress]

What does this mean for cryptocurrency and it's original vision?

It means you still need to distinguish between Bitcoin and everything else under the cryptocurrency blanket. There is no off switch for Bitcoin (or not a practically feasible one anyway in this day). Can't say the same about any other "cryptocurrency". Nope, not even ETH. Ask the Classic guys.

[retreat]

The news that about $2.8bn of stolen funds from the Binance hack was frozen and ultimately returned to Binance came as a relief

No. The status is still frozen in the hacker's wallet. If it is to be returned, then it needs to go through a legal process, and that could take longer.

to meant but it also begs the question "is cryptocurrency not decentralized anymore?" What would happen if a false alarm or a malfunction falsely identifies a random institution's holdings as fraudulent?

That's the risk of a centralized system: if they want to, the coins you hold can be frozen unilaterally by its issuer. But if it's Bitcoin, then it can't.

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

You can achieve that with self-custody. If you keep your Bitcoin in a self-custody wallet, you're basically becoming your own bank.

[d5000]

One could argue that as long as Bitcoin's blockchain is completely transparent, there could be a "de facto off switch". Because once a certain address is known to basically the whole crypto world to contain funds from a hack, most services and even P2P traders wouldn't accept them.

Mixers without AML checks are one of the few ways out of that "off switch". The problem is that governments don't like them, and even many of us tend to consider them "evil" due to this, but what if the "off switch" was e.g. some guy from an authoritarian government reporting the funds of an opposition group as "stolen"?

I don't know a perfect way out of that problem, because of course that defeats Bitcoin's censorship resistance property. I have still hopes we get better privacy tools than CoinJoins, such as the Shielded Bitcoin proposal which popped up a few months ago, or perhaps a Bitcoin MWEB sidechain?

[Crypto_Timothy]

You can't be rooting out for privacy and decentralisation and then moving your funds into Binance and Coinbase, people only runs their mouth about decentralisation and they aren't practicing it.

This is a point i have been thinking about lately, especially after i saw a thread on the forum that was talking about taking loan to buy crypto from banks? Like of all places, a bank? and of course the banks will collect at the necessary information it needs before it can give you a loan which defeats the privacy entirely but that is people taking that option which ties to the point you are talking about now. Everyone talks about decentralization but truly only a few actually practice it fully.

I dont know if the hack was intentional so people would trust centralization more but if more persons are thinking like this as a result of this constant hacks then i guess you can put two and two together but i must confess that this hackers are getting very smart with thier targets and its alarming

[shinratensei_]

The news that about $2.8bn of stolen funds from the Binance hack was frozen and ultimately returned to Binance came as a relief to meant but it also begs the question "is cryptocurrency not decentralized anymore?" What would happen if a false alarm or a malfunction falsely identifies a random institution's holdings as fraudulent?

If the crypto have on and off switch, they will simply revert the false positive.

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

What does this mean for cryptocurrency and it's original vision?

Even though I get what you mean, but the tendency is too generalizing and simplfying something very complex. There are two kinds of crypto, decentralized and centralized. The centralized ones is usually a token made centralization in mind like the on and off switch and you're allowed to choose what you prefer. BTC don't have off switch, it is truly decentralized as promised. For stablecoin, there is DAI that can't get blacklisted. It's all about choosing the right thing for your need.

[ColdLava40]

The news that about $2.8bn of stolen funds from the Binance hack was frozen and ultimately returned to Binance came as a relief to meant but it also begs the question "is cryptocurrency not decentralized anymore?" What would happen if a false alarm or a malfunction falsely identifies a random institution's holdings as fraudulent?

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

What does this mean for cryptocurrency and it's original vision?

You are mixing everything up.

They were able to freeze the tether coins because tether is a centralized network.

Bitcoin is not centralized but decentralized it cannot be frozen. The only thing that can happen is when coins are seized by the government after being linked to such activities.

But it won't for once change the fact that bitcoin without it's keys is not yours and cannot be controlled or frozen like tether does with stable coins.

We don't really know if the coins have been truly returned to binance but the amount I remembered wasn't up to $2.8billion, maybe you could have shared a link to reference.

[Cookdata]

This is a point i have been thinking about lately, especially after i saw a thread on the forum that was talking about taking loan to buy crypto from banks? Like of all places, a bank? and of course the banks will collect at the necessary information it needs before it can give you a loan which defeats the privacy entirely but that is people taking that option which ties to the point you are talking about now. Everyone talks about decentralization but truly only a few actually practice it fully.

I dont know if the hack was intentional so people would trust centralization more but if more persons are thinking like this as a result of this constant hacks then i guess you can put two and two together but i must confess that this hackers are getting very smart with thier targets and its alarming

I don't like the idea of taking loans to buy Bitcoin and I don't even care about the source. If you want to buy Bitcoin, look for a way to comfortably buy with money that you don't have to take interest. However, I also understand some people taking loans from banks. An average banks gives 9% annual interest rate on loans which some people don't see as a problem, they can pay it off even before the due date if they take an amount less below what they earned as income.

Bitcoin isn't a season that is a forceful asset to buy. No matter how small the interests looks, it's better you use it to do DCA and get what more Bitcoin than give that money away for money they are not going to give you for free. If you even want to consider how banks gives ridiculous conditions for loans, you wouldn't want to be involved in their scheme.

[o48o]

-cut-
You can't be rooting out for privacy and decentralisation and then moving your funds into Binance and Coinbase, people only runs their mouth about decentralisation and they aren't practicing it.

I feel like this is most crypto holders out there. Motive behind praising bitcoin fundamentals is to pump their bags and they don't seem to find irony in that the value of bitcoin is measured in money it's traded against, which is very much centralized.

Personally i don't see how the battle for anonymity / privacy could be won when people are so focused on pumping the price in fiat money.

[KingsDen]

"is cryptocurrency not decentralized anymore?"

I have read some replies but people did not pick on this point very well... Cryptocurrency is not decentralised but bitcoin is decentralised. Even bitcoin usage is more on centralised form due to the availability of the CEXs. Bitcoin is the only true decentralised coin from the protocol side.

Remember, Cryptocurrency = bitcoin + altcoins. Don't mix them together. The frozen coins from the Binance hack are Tether and USDC and other centralised coins and not bitcoin.

We criticise centralisation so much but they keep helping our ass whenever there is a major hack. Tether try as much as possible to freeze, even if not all but an appreciable extent.

[Texac]

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

What does this mean for cryptocurrency and it's original vision?

A large portion of what we consider to be crypto project and token is dominated by centralized stablecoin and centralized exchange. At any moment, whether on a whim or by order from central command, they can freeze billions of dollar.

If your holding even when managed from comfort of your own home rather than while standing in bank queue, remain dependent on whims of a corporation or issuer then what exactly distinguish this from traditional banking? So we only dreaming of decentralization. But large part of crypto space is actually trapped in web of proxy centralization.

[SatoPrincess]

First of all, you are making the mistake of thinking bitcoin and cryptocurrencies are interchangeable. Bitcoin is a cryptocurrency but not all cryptocurrencies are Bitcoin.

Secondly, Satoshi had a vision for bitcoin hence the bitcoin white paper but I don’t think there was a vision for cryptocurrency par say. A lot of these shitcoins that emerged in the last ten years have been infamous for plagiarising white paper from each other so their vision statement does not really hold any value to me.

[Iranus]

Binance is really something, it seems they have not learned their lesson, as mentioned they were hacked multiple times and still allowed it to happen again. I guess even if Binance is able to cover their customers' balances, it's also worth considering shifting to a more secure exchange.

Aren't you oversimplifying things a bit?

Keeping a business secure and fending off hackers is no easy task, especially when it holds hundreds of billions of dollars' worth of assets and is constantly in hackers' crosshairs .

Learning from past attacks doesn't mean you can prevent every attack that comes next. And just because an exchange has suffered multiple security breaches doesn't mean it hasn't learned from them. Hackers don't stand still either. They're always finding new ways to exploit vulnerabilities. No system is 100% secure.

So  which exchange do you reckon is safer and more reliable than Binance ? huh?

[Livingleged]

I don't like the idea of taking loans to buy Bitcoin and I don't even care about the source. If you want to buy Bitcoin, look for a way to comfortably buy with money that you don't have to take interest. However, I also understand some people taking loans from banks. An average banks gives 9% annual interest rate on loans which some people don't see as a problem, they can pay it off even before the due date if they take an amount less below what they earned as income.

Bitcoin isn't a season that is a forceful asset to buy. No matter how small the interests looks, it's better you use it to do DCA and get what more Bitcoin than give that money away for money they are not going to give you for free. If you even want to consider how banks gives ridiculous conditions for loans, you wouldn't want to be involved in their scheme.

I don’t also support taking loans to buy bitcoin, even though in some case due to how small some people earnings are they feel it’s okay to take loan to buy some bitcoin when the price is dump and repay the loans comfortably without any default in the repayment or additional interest. In this case they will have gotten more bitcoin in a subsidies price than they will get when they just continue DCAing with their small amount they earn.

Of course bitcoin isn’t a must do affairs and you can always wait until you’re fully ready, but taking some risk is also good sometimes if you don’t take risk you don’t grow. If one has a well structured plan to repay loan, then taking them go investment such as bitcoin will be welcomed to me.

[MusaMohamed]

I don’t also support taking loans to buy bitcoin, even though in some case due to how small some people earnings are they feel it’s okay to take loan to buy some bitcoin when the price is dump and repay the loans comfortably without any default in the repayment or additional interest. In this case they will have gotten more bitcoin in a subsidies price than they will get when they just continue DCAing with their small amount they earn.

Bitcoin is a volatile cryptocurrency and asset so in risk management, taking any loan for purposes like buying bitcoin or using bitcoin as a collateral for doing other things is very risky.

If Bitcoin price becomes too volatile and opposite to your expectation, your collateral in bitcoin will lose considerable value and it can consequently cause a liquidation on your loan collateral and you will lose most of your initial bitcoin.

If you use other things as collateral for a loan, to have money for buying bitcoin, you will have to pay loan interest, and have to face with possible bad financial status if Bitcoin drops a lot in price.

With Bitcoin investment, don't take loan, use your own money to buy it. If you already have bitcoin, don't use your bitcoin as a collateral for any loan. You already have a valuable asset, so let's keep it safe, don't take more risk.

[stepwilli]

The news that about $2.8bn of stolen funds from the Binance hack was frozen and ultimately returned to Binance came as a relief to meant but it also begs the question "is cryptocurrency not decentralized anymore?" What would happen if a false alarm or a malfunction falsely identifies a random institution's holdings as fraudulent?

I have always thought crypto to be my finances in my hands, free from outside influence, I don't have to cue at a bank or answer to any institution before I get access to my holdings, but it seems that times are changing faster than we can keep up with.

Your information is wrong if you have always thought that all the cryptocurrencies are decentralized, because that's not the case. Not all cryptocurrencies are truly decentralized just like Bitcoin, where there is no central authority who can freeze funds, block wallets, or reverse transactions, etc. With stable coins, such as USDT and USDC, their companies have complete control over their coins/tokens, no matter where they are, and they can freeze the tokens/coins within your wallet at any time. This is the reason why so many people always say that you should never hold too many stable coins as that simply means your money is not really just in your control.

If someone is holding Bitcoin, and holding them in a non-custodial wallet, there is no way anyone can freeze their bitcoins, and that is what decentralization is. However, if you are holding bitcoins within a centralized exchange or in a centralized wallet, then there is still a possibility that they can get frozen or confiscated because in that case, the centralized authority will have control over the assets and not you.

Coins that get frozen are centralized, and we need to understand the difference between the two.

[ovcijisir]

What does this mean for cryptocurrency and it's original vision?

It means you still need to distinguish between Bitcoin and everything else under the cryptocurrency blanket. There is no off switch for Bitcoin (or not a practically feasible one anyway in this day). Can't say the same about any other "cryptocurrency". Nope, not even ETH. Ask the Classic guys.

As far as I understand only USDC and USDT can be frozen and returned. I don't know exactly how they work, but those are centralized currencies and entity that controls them can freeze them if they notice something suspicious.

Chainalysis wrote good analysis of Binance robbery, if somebody is interested I can dig out that article.

[Ucy]

Freezing fund (or ability to freeze fund) doesn't necessarily equate to centralization. What makes things centralized is if someone or a group unilaterally do the freezing without the full consent and involvement of the rest of the community in a permissionless manner.
If the fund was frozen decentrally, you have little to nothing to worry about, otherwise  a centralized freezing becomes a potential vulnerability that can be exploited by adversaries. So, the centralized approach is not issue free unless the man at the center is infallible and just.

The right way to freeze fund is by having an open, transparent and evidence-based process that allows for thorough investigation of claims or allegations of serious violations of just law. Every member of the system is involved in the investigation to keep things decentralized. Once the claim is confirmed to be true, the request to freeze a fund is approved by the members  either by their not rejecting the proven claim or outrightly accepting it as truth