What is your opinion on services which claim to hold your bitcoins?
On one hand, I can see a use case for such services. Someone who doesn't want the responsibility of taking care of their computer security or believes that their computer security is not good enough but wants to hold bitcoins could find them useful.
For example, a journalist who travels around the world and visits dangerous places might not want to keep their bitcoins locally in case their computer goes missing. Even paper wallets could be stolen.
I was on Freebitco.in the other day and saw this:
According to Wikipedia (
link), Xapo is supposed to be an online wallet and vault for the storage of bitcoins. It seems legitimate but then again, almost all of these services do until suddenly they aren't. I know Circle is also offering a similar BTC storage service too (
link). Both claim to insure their customers' deposits and that any bitcoins stored with them are safe.
History, on the other hand, tells a different story. Ever since MyBitcoin got "hacked" in 2011, the track record of third party services (e.g. inputs.io, Mt. Gox, Flexcoin, etc.) which claim to hold your bitcoins for you has not been very positive.
Reading Satoshi's posts, it seems that he was distrustful of banks on all levels. I'm not sure if Satoshi ever used these words himself, but the phrase "be your own bank." shows up a lot during discussions about Bitcoin. So does the phrase "if you don't hold the private key, you don't have any bitcoins". I wonder what Satoshi would think of these Bitcoin "banks" ? Do you think they are providing a legitimate service as Bitcoin continues to evolve and become more mainstream or are they a parasite upon the Bitcoin world?
I run them through the same due diligence as I do before choosing a PayPal like service or before choosing my stocks broker or being conned into opening an account with a rather new bank. So I end up with trusting my own wallet.
