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Comment by phailhaus | Hacker News Reader

> Satoshi wouldn't be encouraging people to put their coins on a trusted third party like that. All fundamental crypto values say this.

You can literally say this about "regular" currency. Just don't put your money in banks! But people do, why? Once you answer that, you'll realize why people do it for crypto too. You can't complain that it's "against fundamental crypto values" when it doesn't have any mechanism for preventing it. It's convenient, it has benefits, therefore people do it.

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I put my money into a bank because the bank is FDIC insured. The risk is less than keeping it in a safe in my house.

Plus (during normal times) you get an interest rate that equals inflation. Mattress loses during inflation.

>But people do, why?

1. cash is bulky and risky to keep at home

2. inflation eats away at your savings

Bitcoin is designed to solve both issues.

Then it is an utter failure at both.

except it doesn't solve either, because it's still risky to keep (whether with a 'trusted third party' or at home on some physical device... at the end of the day it can't be better than physical possession.. i.e. cash). volatility is a lot worse than stable inflation, and deflation (just HODL!) is much, much worse to the point of demonstrating the degree to which bitcoin is not useful as a monetary unit of exchange.

Bank robberies are no longer a thing in the 21st century. No one loses their savings because of thieves.

Of course it's still a thing, both regular robberies and digital ones. And people lose savings to online thieves and cheats who take control of their accounts, or manage to perform transfers on their behalf.

They still do, it's just the thieves have the backing of the court system.

https://ij.org/report/seize-first-question-later/

At least when you do, you’re fdic insured up to 100k typically

>it's still risky to keep (whether with a 'trusted third party' or at home on some physical device... at the end of the day it can't be better than physical possession.. i.e. cash).

I'm not sure how you can conclude that password protected, geographically distributed (eg. 2 of 3 multisignature) storage "can't be better than physical possession.. i.e. cash".

I mean a realistic use case that a normal person would actually do… people who are used to just tapping their iPhone twice to pay for things. My mom has absolutely no clue what you’re talking about… at best she might have a ledger nano one day

Bitcoin is designed to combat inflation? Please show me how it does this. I am very skeptical of this claim.

Because there will be maximum only 21 millions of bitcoin while US dollar in circulation is doubling every decade or so.

This seems to use the uncommon, Austrian and wrong definition of inflation as being purely an effect of monetary supply.

There is ultimately a fixed supply of Bitcoin, so the money printer can’t go brrrrrt.

How's that working for you? As a hedge against inflation, Bitcoin seems a remarkable failure.

1. Bitcoin may not be bulky but there are still many risks. Losing the wallet, forgetting a password, or theft are still issues!

1. Loose the password to your crypto wallet or your physical machine and all your money is gone. Regular people won't go farther than that.

2. Deflationary currencies reduce the urgency to invest or spend and crush economies.

Bitcoin makes both issues worse.

A bank is insured and has a guarantee...

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