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Comment by mrtksn | Hacker News Reader

I know, "Not your keys, not your coins". However, most people have no idea about the technicalities of the crypto and because transfer fees range from not-zero to ridiculous, as long as the arbitrage between exchanges stays minimal there's no motivation to ever move crypto anywhere so for most people crypto currency is simply the number in their account on a website.

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I reckon 95% of people are also in it for speculation, and then you must have your coins always at the exchange, cause you never know when Elon Musk decides to pump, or when the FED or China or the EU decide to make a move. To move coins takes hours last I tried it and as you say the fees are also ridiculous now.

I get all that, but it is a bit like having a perfectly good safe at home and still carrying your gold to the bank because opening it is a bit cumbersome and fidgety.

Kinda defeats the purpose of having a decentralized cryptocurrency.

Storing all your gold at home is your super secure safe is also not very smart though. I am actually surprised we do not see more robberies of this kind targeting Bitcoin billionaires.

Here is the irony of crypto vs gold...

You can secure ur gold physically very well, fires and natural disasters short of volcano, yet it is easy to steal it at gunpoint.

Crypto is hard and cumbersome to secure ( paper keys, hw Wallets), yet very hard to steal at gunpoint.

Hard to steal at gunpoint? Who is going to refuse to hand over their keys when the choice is "Your Bitcoin keys or your life"?

Sure. I can hand you a handful of USB sticks about 20 paper wallets maybe a hard disk or two...and tell you, here are my keys. Now what you do? Do you put down your gun and start verifying which one is with actual funds or, do you know what is a usb drive and what is a hw wallet? Are you gonna ask me for my password too. How do you know you actually stole something worthwhile? How do you know I am not going to be faster transferring the coins to different wallets?

All that is vs. "show me gold, shiny ohh heavy".

You see the levels of complications....

A million dollar heist typically involves more than one individual. One person holds the gun the other handles moving and verifying the funds.

I'd sit there with you and transfer them through some tumblers. I'd have brought a laptop and set aside time, and will threaten you on your life if you slow down or refuse.

It only sounds hard if you assume I'd take an unreasoanbly incompetent approach. It's like "rape is impossible because a women with her skirt up runs faster than a man with his pants down".

To be fair, because it is so easy to hand over access to crypto wallets vs a bank account (your bank will reverse fraudulent transactions) it would actually be possible to hand the robber a bait wallet with a small fraction of your net worth but enough to keep the robber happy.

If the criminal is sophisticated enough to target cryptocurrency holdings, they'll probably transfer the coins to their own wallets right there on the crime scene. Exchanges won't help either: they can simply force their victims to log in and withdraw the money.

This also happens with traditional banks where I live. People are kidnapped and taken to ATMs where their accounts are drained.

"Here is my 'checking' wallet. The key to my paper 'savings' wallet are in bank XYZ's vault, care to come get them with me?"

That's about the security of bank vaults, not Bitcoin. Fiat savings (or gold, diamonds, whatever) stored in the bank vault would be just as hard to steal.

May I introduce you to the $5 wrench method?

https://xkcd.com/538/

Irrelevant because I cannot (a) give the content of the vault from memory to save my life or (b) enter the vault accompanied (so there's an opportunity to alert bank personnel that I am under duress). Well "irrelevant" to the safety of the wallet at least, not of my squishy bits.

>Crypto is hard and cumbersome to secure ( paper keys, hw Wallets)

are hardware/paper wallets hard/cumbersome to use? I suppose they're less intuitive locking up a metal bar, but they're not exactly hard to use. If anything they're easier to secure because you can store multiple redundant copies, whereas you can't with gold.

The chance that a Bitcoin billionaire has their private key held in a way that easily be robbed is pretty low. Most will be using additional cryptographic security. e.g. Shamir's Secret Sharing.

Killing a bitcoin billionaire can also be a way to inflate its value.

I can imagine one bitcoin billionaire killing others to do just that in order to reduce the supplies.

Bitcoin's market cap is currently around $1T. Killing someone with $1B in bitcoins would only increase the value of the remaining coins by 0.1%. That seems horribly risky for a very small gain.

Thats only true if you assume 100% of coins are actually accessible. The true market cap of bitcoin is always going to be less than the number of coins that have been mined would imply, due to losses.

Shamir's Secret Sharing could also be a solution to this, with parts distributed to your heirs and the threshold being the number of parts you distribute to others, keeping an additional part for yourself.

That defeats the claimed purpose: decentralization, isn't it?

Sure, absolutely. Most Bitcoiners don't care; they're in it for the speculation.

> and because transfer fees range from not-zero to ridiculous

This problem has been solved already: just stick to using exchanges that support Lightning (e.g. Bitaroo, Bitfinex, Bitnovo, etc)

Bitfinex

No danger of fraud there!

Catch-22: To open a lightning channel, you need to make a transaction (and so pay the high fees), but to pay that fee, you'll need to already have coins in a wallet that you control - which you can only achieve by withdrawing some coins from the exchange.

So your 'solution' is for people to withdraw some coins, paying a high fee, then open a lightning channel (again, paying another high fee), make a lightning transaction (beta software, coins at risk, barely functional, better hope you're running the lightning software 24/7 to ensure you don't get ripped off!) and finally you have your coins in your own wallet. What a bargain! Currency of the future!

>Catch-22: To open a lightning channel, you need to make a transaction (and so pay the high fees), but to pay that fee, you'll need to already have coins in a wallet that you control - which you can only achieve by withdrawing some coins from the exchange.

I'm not sure whether any exchanges implement this, but theoretically they can withdraw and open a channel at the same time. ie. instead of withdrawing 0.1 BTC, they deposit 0.1BTC to a channel and send all the funds to you.

>beta software

It's used in production by various merchants so I'm not sure how relevant this is. Speaking of which, isn't bitcoin itself "beta" as well? ie. the version number is still 0.x.x

>barely functional

???

>better hope you're running the lightning software 24/7 to ensure you don't get ripped off

AFAIK the period is somewhere between 1 week or 2 weeks (don't remember which), and you can have third parties do the monitoring for you.

Beta software: http://lightning.network/docs/ reports that the design of the network is still only in draft form, never mind the software! (those pesky details like routing, which are a difficult problem, are mostly elided in the documents so far)

The main lightning daemon, https://github.com/lightningnetwork/lnd is still beta, with plenty of warnings in the docs about shortcomings and potential loss of funds. I'm sure people use it, but the developers are very clear that it it is not to be trusted: https://github.com/lightningnetwork/lnd/blob/master/docs/saf... says that it is 'considered reckless to put any life altering amounts of BTC into the network' - how can anyone consider this to be production quality?

you can have third parties do the monitoring for you

Not your keys/monitor, not your coins! We're back to square one, aren't we? With just some dodgy software and additional complexity papering over the critical flaws.

>reports that the design of the network is still only in draft form

last updated 2016

>(those pesky details like routing, which are a difficult problem, are mostly elided in the documents so far)

Can you elaborate on why routing is a difficult problem? Pathfinding and flowgraphs are solved problems in computer science.

>I'm sure people use it, but the developers are very clear that it it is not to be trusted: https://github.com/lightningnetwork/lnd/blob/master/docs/saf... says that it is 'considered reckless to put any life altering amounts of BTC into the network' -

it's considered reckless to put any life altering amounts of money into a volatile cryptocurrency (or for that matter, even a single stock)

>how can anyone consider this to be production quality?

it's considered production quality because merchants are willing to put hundreds of thousands of dollars into it.

>Not your keys/monitor, not your coins!

watchtowers don't require your keys.

You mean the centralized off chain network that's riddled with bugs and horrible UX?

Can you elaborate on why it's "centralized"?

It's a network of node operators but rather than operating as a network, they operate as individual hubs. It's also all offchain and you have no idea if they're playing by the rules.

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