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Comment by rblatz | Hacker News Reader

This is exactly why I think all current forms of cryptocurrency are not suitable for use as a store of any significant value. You must have 100% flawless opsec at all times or you could have your entire life savings stolen, with absolutely no recourse.

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One of the most important features of the financial system is that most actions have an "undo" procedure. It might takes a few days, but in most cases you can get most of your money back after a simple mistake.

This is almost always a great benefit for consumers. For some merchants this is an unacceptable risk and because of it they are not able to offer their products at a reasonable price.

I'd say that's mostly true for credit card transactions, but I don't of anyone who has gotten scammed and got their money back. Banks either don't care, or can't actually do anything. Scammers know what they are doing.

Maybe credit card, but cash, debit, interac, etc don't.

If I etransfer (Canada) someone money and that person up and disappears I am out that money, a bank will do absolutely nothing. You can file a police report but those chances are also basically zero.

Same with cash, if I give someone cash or take cash out and don't store it properly I lose the whole thing.

There isn't really an undo process except credit cards.

There is? What’s the purpose of a court? Even if it was cash and it was illegally stolen

Please be careful - wire transfer often do not have an "undo" or even if available it's often too late to use it.

When bitcoin gets covenants, we'll be able to send payments that can be undone for a limited period of time (say, a week).

I'm always surprised to hear, as a supposed benefit, how easy Bitcoin makes it to move money. I don't want it to be fast, easy or cheap to move my life savings. I want inertia.

Maybe we could transfer a standardized cryptocurrency ammount into a write-once device, and use as many of those as we need to purchase things. We could call these fungible cryptodevices "cashcoins".

Already been done: https://kong.cash/

https://opendime.com/

I agree significant value should not be stored directly by many end users.

What cryptocurrency can do is separate the owner of the value (the individual) from the provider of the security (the custodian).

In theory you can have an account where both you and your bank must sign a transaction to move funds. This adds an additional layer of security. The bank can't steal your funds without your digital signature and you can't do something stupid without the bank's approval.

It hasn't happened yet in a meaningful way. But it is possible.

> In theory you can have an account where both you and your bank must sign a transaction to move funds. This adds an additional layer of security. The bank can't steal your funds without your digital signature and you can't do something stupid without the bank's approval.

This is basically the model of Casa, except they're never custodian because they only hold 1-of-N signing keys, where N is 3 or 5, and creating a transaction requires a quorum.

The advantage is some redundancy in your signing device setup, and also protection against theft by geographically distributing your keys, while still maintaining sovereignty of your funds. It also allows them to assist you in recovering access to your funds if one of your own signing keys is lost, but they never have the ability to move your funds on their own.

The tradeoff compared with maintaining your own multisig setup is a reduction in privacy, since they can see your transaction history. This is still far more preferable than letting a custodian hold "your money" for you. I believe it's the best model for the vast majority of the public to hold Bitcoin.

They also push a "seedless" model to prevent the exact attack described in the article. Nothing prevents the user from keeping backups of one (or more) of your seed phrases, it's merely a suggestion.

https://keys.casa

disclosure: I used to work at Casa and hold a tiny bit of equity, and I continue to be a satisfied customer

This will change when bitcoin gets covenants. Then we'll be able to send payments that can be undone for a limited period of time (say, a week).

You can lose your entire live savings with a regular bank as well. There is just government programs that offer insurance (FDIC, CDIC, etc)

All crypto needs is a insurance program that offers protection and guarantees your money.

It will take time but it's inevitable at some point with banks and large companies signing up.

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