Hacker News Reader

Comment by gota | Hacker News Reader

I've said this time and time again: 'be your own bank' is a terrible design error, not a feature, for 99.99% of users.

This guy is most likely somewhat technically literate, and this happened to him.

There is no mandate in Bitcoin to 'be your own bank' - its just an option. It is a feature and a very good one for people who are afraid of government intrusion into how they use their money. If you don't care about this "feature" you can turn it off by putting your crypto in Coinbase or other exchanges where it will be insured.

This feature is the whole point of Bitcoin and blockchain in general. If we just wanted to be able to have balances in banks, the current banking system does it far cheaper with a lot more legal protections.

The problem with such a new, unproven, and completely unregulated system, many alternatives to 'be your own bank' are also not good options. Plenty of exchanges have lost a lot of people's money. It's hard to tell which wallet or exchange is reliable and which isn't. Instead of trusting a system that's tightly regulated in order to protect people's money, you're expected to trust a system that's completely unregulated, that's filled with crooks and cowboys and idiots who keep creatively or accidentally figuring out new ways to lose your money.

It's a good example of why regulation is necessary in banking.

I would have to disagree on both main points;

BTC is nearing 12 years old and time tested.

BTC also proves that no regulation at all is necessary.

It also proves that even folks who think they're technically literate, are hardly capable of making proper backups and or properly using Bitcoin. It's too sophisticated for most. You shouldn't keep multiple bitcoin in one private key. There is no reason at all Bitcoin should have KYC or regulation. It exists outside the government monetary systems and it is your risk you take to use it. Crying about using it because it's risky just means you shouldn't be using it.

12 years is a lot in the world of tech, but absolutely nothing in the world of banking. Or banking system and its regulatory systems have evolved over centuries. And frankly, I'm not sure what bitcoin has actually proven in those 12 years; it's barely being used for any kind of serious commerce. It's mostly a speculation rollercoaster that goes up and down based on whether people expect it may or may not prove itself eventually.

People constantly losing bitcoin like this, or through exchanges falling over, is terrible for trust in bitcoin. Banking regulation exists exactly to prevent this kind of thing. At the end of the day, people trust their government a lot more than they trust a bunch cowboys. It may be cool, but it's no basis for a financial system.

> Satoshi Nakamoto stated in his white paper that: "The root problem with conventional currencies is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

https://en.wikipedia.org/wiki/Bitcoin

It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured.

Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.

Bitcoin does not provide a trust-less alternative, at best, it requires you to trust yourself.

The internet is full of people that have lost their wallets due to hardware failures and no backups, scams, phishing, ...

Was Mt Gox insured? Why should I trust anything after that?

Haha. That's funny. That's like asking if the neighborhood gang member is FDIC insured before they come ask you to "invest".

Users may use one of the many wallets that suddenly vanishes, along with the bits. Neither online or offline is very secure, from bitrot, hackers and viruses. So no.

This is untrue. The entire design of Bitcoin was never to have exchanges, to entirely be your own money's keeper. You would have to actually read the whitepaper, have talked to Satoshi and Hal Finney and paid attention to it's purpose. What you said was an opinion. Not your code/node instance, not your keys, not your money. Bitcoin was not designed to custody your money to a bank, it was designed __against__ doing just that. It is very unfortunate when something like this happens but it's very foolish to have more than 1-2 BTC in one privatekey. This guy should've gone through the painstaking process of putting one BTC, or even less, into 1400 privatekeys and new cold wallets.

>all digital currency that Coinbase holds online is insured. ...

>Coinbase holds less than 2% of customer funds online

So you're not really insured against some human getting the offline key https://help.coinbase.com/en/coinbase/other-topics/legal-pol...

> somewhat technically literate

But doesn't know what IRC or freenode is, as illustrated by a comment in that thread.

Is that really your bar for being "somewhat technically literate"? Being familiar with decentralized chat protocols and services? What a world...

Once in a while, I refer to Hacker News in a job interview, just to understand the cultural fit of the hire.

Same here.

yes

In general I'd say that most "higher functioning" Bitcoin users are fairly decent with C++, using CLI/TTY only wallets, and familiar with the cypherpunk movement, culture, and history. If you are not familiar with IRC it makes it sound like you just started using a computer the last couple years.

There's a reason why any site dealing with crypto has a dozen labels begging people to double-check addresses, divulge no information to strangers, don't trust anyone, etc. However, warning labels come on any product and people still manage to misuse them. No matter how many labels you plaster about being more careful with bitcoin, people will keep losing it to things like this.

Yeah agreed. If everyone was a developer and a security expert, Bitcoin is great, but instead its a massive hobby that has serious risk like what happened to this poor guy.

The virtues people often use for crypto (trustless, irreversible, untraceable) are almost always user-hostile. Banks aren’t great, but at least it’s harder to phish $16million.

Reply on news.ycombinator.com