Not your keys, not your crypto.
Although at least with cash most people would understand how to protect it. A vast majority of people in the world are never going to understand crypto well enough to be fully capable of securing it themselves.
Current crypto exchanges are basically like holding your money in a gaming account in an offshore casino. The companies don’t submit themselves to anyone’s jurisdiction—so there’s no implied legal safety.
1: https://support.gemini.com/hc/en-us/articles/205823016-Are-m...
2: https://help.coinbase.com/en/coinbase/other-topics/legal-pol...
3: https://www.coindesk.com/bitgo-600m-insurance-capacity-big-t...
Returning coins to users would only be part of the problem. Everyone’s coins would be worth less from the fallout alone.
The exact kind of trading that crypto people already do all day, is called ForEx trading when applied to fiat currencies; and (investment) banks know how to do it very well. Those banks just haven't built the infrastructure to allow them to manage a BTC or ETH holding through the same ForEx account that they use to manage fiat holdings.
If they did build that infrastructure, most of the crypto exchanges would go extinct overnight. Why would I do my (crypto) ForEx trading on a crypto exchange, if I could trade it with my bank instead?
(There are benefits to using a DEX over a hypothetical crypto-enabled investment bank for crypto-trading; just no real benefits to using a regular centralized exchange over said bank. Centralized exchanges are investment banks — just fly-by-night ones compared to real investment banks.)
Will be fun when all the people clicking on these links lose all their currency.
It’s not like the Internet, which was an all-new solution.
At least with all other assets classes, there is some verification of the transaction and receiver by the exchange, and the possibility to reverse an error.
Bitcoin addresses are created with a built in checksum code. Generally speaking, it is not possible to send Bitcoin to a mistyped address.
It's like sending gold over snailmail to a random address
If you are sending to an address you did not create, then you are sending to an address where you don't have the key anyway. If you are sending to a specific address (given by someone else or generated by you) the checksum will only line up if it is unchanged.
Ethereum does not have this as far as I know.
Kraken now has a US banking license, Coinbase is not more likely to shut down or screw you over than any normal bank, etc.
The people saying "not your keys, not your coins" are in general applying the same logic to banks - so, yes, "not your cash, not your fiat" holds just as true in principle. Banks and government institutions can still freeze your funds for arbitrary reasons. In many places you also don't have any recourse in the event of, say a combined hacking + SIM-jacking attack resulting in loss of funds from your bank account.
Understanding how to protect your funds properly will continue to get easier to understand and do over time (and honestly, a hardware wallet like for example Ledger is in principle not more complicated or difficult to use properly than using the various 2FA systems banks utilize today).
It's not that hard today, and it will continue to get easier.
More secure ways to do custodial/multisig/etc that relies on a third party like a bank are being continuously worked on as well.
It's still early days. But at the end of the day, if you're happy to forfeit your independence for convenience, banks will be happy to fill that void for you.
The promise of cryptocurrency is that you have the choice. That choice does not exist in the legacy fiat economy.
What is the minimum set of people, or computers, or cellphones that one would have to compromise to steal a substantial chunk of Coinbase?
How vulnerable are Coinbase to, say, Solarwinds style supply chain attacks?
Coinbase literally just direct listed, had their executive team dump every single vested share on the open market, and then listed Tether. Not a mention of Tether in their regulatory filings under "OMG WTF ARE YOU THINKING". Hmmmm.
Starting to smell a bit like an exit scam.
AFAIUI this is not uncommon practice for IPOs in general
That being said - time will have to tell of the CB executive team is honest or not. I wouldn't be surprised either way TBH.
Jumping on Tether seems very shortsighted in CBs position.
IPOs generally have a 180 day lockup, in part so that the market can begin down the path of price discovery. This is a solid anti-pump-n-dump mechanism. This is achievable because new shares are issued for folks to trade with. The rules were changed recently, by the way, so that direct listings could also issue shares instead of requiring insider selling.
I think some selling is fine, I do think selling almost 100% of vested shares by every executive on day 1 isn't a bullish indicator. Usually they sell over months/years with a 10b5-1 plan.
> Jumping on Tether seems very shortsighted in CBs position.
I think they direct listed before launching USDT specifically so they could avoid putting Tether in their disclosures.
> I think they direct listed before launching USDT specifically so they could avoid putting Tether in their disclosures.
That definitely explains the timing, but given that they probably prefer users to use their own USDC anyway, why do this when it's such a controversial asset?
We don't need or want a trustless distributed consensus currency...
We don't need or want a fully public ledger...
We don't need or want to be in charge of their own keys...
We don't want to deal directly with other agents without a middleman to protect us from fraud and theft.
Slow transactions and distributed public ledgers are built into the design of something like bitcoin and are fundamentally tied to it - take away all those things by redesigning it or trying to augment it and you're left with a bad copy of a centralised transaction network. People need to trust their money and trust the agents they transact with, validation of identity (something bitcoin actively works to undermine) is key to financial transactions, it should be central to any network.
There really are some fundamental flaws in the design and in the aspirations of currencies like bitcoin which mean they will only ever be used by a tiny minority. Hence bitcoin has recently become a vehicle for pure speculation instead, which will end very badly when this bubble bursts.
The blockchain and smart contracts serve this purpose. Regardless, there's additional protocols and tools being created for decentralized insurance, escrow, custodians, etc.
They do not, and the bitcoin blockchain in particular eschews identity verification in favour of pseudo-anonymity and puts people in charge of their own anonymous keys - perfect for criminals (anonymous enough to evade police) and states monitoring citizens (not anonymous enough to evade states, lasts forever for retrospective enforcement), but terrible for normal citizens who just want to be sure who they are transacting with and be able to get compensation if they are defrauded.
Blockchains and smart contracts are no substitute for real-world contracts enforced by courts and regulators, and the cryptocurrency attempt to supplant state currencies and their legal supports actively undermines any attempt to get regulators to seriously go after fraud. So instead regulators have classed them as assets (so they can tax every transaction in theory) and washed their hands of them.
Take, for example, the simplest use of currency... I want to buy an item that someone else is selling. The blockchain can verify that the buyer has sent the seller money, but it can’t verify that the thing the person bought isn’t defective. It can’t even verify that that person even delivers the item to me. It can’t verify that the item isn’t stolen.
Credit cards can help remedy the situation for all of those things.