Bitcoin worth $1.5B withdrawn from Coinbase in 48 hours
cryptoslate.com
cryptoslate.com
This is probably a good thing, as it's the only real way to ensure they actually have your money. And it's a story if you're worried about being last one out in that case! (I think it unlikely for Coinbase TBH).
Definitely some people (myself included!) hope this becomes a cultural norm for Bitcoin. But that might be a bit optimistic!
?? Movement of 1.5 billion of bitcoin in two days seems at least _curious_, Worthy of Note. What don’t I get? This is just another day in bitcoin world I’m not aware of?
If people store monies at home, robberies will grow. There are even bank armed robberies, home break-ins are a walk in the park for thieves.
If you have multiple wallets, you have multiple keys to manage.
You need banks. Hardware wallets and seeds phrases don’t work for most people.
Split and distribute geographically, if it's worth the effort.
[1] https://bitcoin.stackexchange.com/a/98423
[2] https://en.bitcoin.it/wiki/Seed_phrase#Two-factor_seed_phras...
Unscrew and hide behind a doorknob or a light switch, the inside of a clock, the bottom of a dresser, inside the wall trim, the leg of a couch, etc.
Then add controls on the wallet itself - only x can be withdrawn every 24 hours, and m out of n recovery methods (your trusted friends and family, a service which validated your email/ phone number, a pass phrase, an in-person office which validates your id and passport for a fee, etc), and you can be as secure as any bank.
1. How do you expect users of this system to obtain their coins?
2. Have you ever in your life forgotten something even though you knew it was important?
If you want to sell your coins to someone you transfer the coins to coinbase, then transfer them.
2 - Yes, but not something that I use with any sort of frequency. If you store bitcoins in a wallet and leave them for years and years you would expect to forget password eventually and that would be a problem.
So, don't do that.
If you're super scared of it, go ahead and use an exchange, be aware that could be screwed.
I would wager good money that at least as much currency has been lost from individual wallets (forgotten passwords, crashed hard drives, stolen credentials, weak brainwallets, malware, scams, death of the owner, etc.) than had been lost to exchange failures.
Exchange failures are loud, public, and occasional. Individual wallets fail quietly, privately, and every few constantly. We just don’t hear about it in aggregate.
It’s like comparing deaths from car crashes to airplane crashes. Unless you’re personally impacted deadly car crashes are invisible (often not even reported in local media) compared to the big and dramatic deaths from plane crashes (often ~300 people at a time) that are covered in the news with the same level of intensity as centralized exchange losses.
50k people die from car crashes every year in the US but you essentially never hear about it as they’re largely considered a somewhat-reasonable and acceptable loss considering the population, number of cars, miles driven, etc in the US. Unfortunately with the “hope you learned your lesson” attitude in crypto.
At least with improved safety standards, etc the number of deaths from cars has been declining. With every mass exodus like this and the state of UI/UX in crypto the losses from self-custody are going to explode in the coming weeks, months, and years. To make matters worse I don’t think the average user rushing to transfer funds away from an exchange fully understand that they’re completely on their own at this point. Unlike every experience they’ve ever had with traditional finance there’s no such thing as a password reset and there’s no toll-free number to call for help when you inevitably lose funds via a hack, forgotten seed, etc.
The phrase "land of the free, home of the brave" has to be read as "land of the free, because we are brave enough to take personal responsibility for our freedoms, rather than entrusting powerful authorities to safeguard them for us."
To save time on replies: “you’d have to be unlucky for that to happen,” and “just try to be fast” is not an ideal mitigation strategy.
Buy your coins and then move them to your hardware wallet. It will be fine.
There are trustworthy businesses (e.g keys.casa) which help with custody. But it's a different business these days.
Not that there wouldn't be point for exchange if tokens had some real use or value. As forex exchanges have.
Going long on a DeFi token is like betting that the horse is more beautiful than the other horses in the stable
Your second concern is valid - choose a device that's been audited.
2) yes
If crypto is “the way of the future”, and it some how catches on, then people are simply going to learn how it works or get locked out of future markets. Due to the seemingly large number of crypto scams, a lot of people will lose their money along the way.
Not that I think it should succeed, but if there is a truly compelling use case for everyone to switch over, I don’t think we’ll let the complexity stop us.
Having a hardware wallet solves very little for small-time investors (the 99%) as they are in this to speculate, not to keep their savings for the next several decades. With everything moving online, it's close to impossible to convince even more tech-savvy people to plug in a USB dongle every time they want to make a transaction. You could say that then it's their own fault if something goes wrong as they "don't own the keys", but historically this type of blame-game did not last. Government regulation and insurance is a much more effective way forward.
Though to give Bitcoin some of the (marketing) credit, we get Blockchain, DEFIs, DAOs and soon CBDCs out of it. So, there's some massive innovation to be had in that sector.
Dash is already popular for payments and transactions with low fees.
Bottom line, a total miner capitulation event on any of these coins that are cheaper to mine is 100% unlikely. Computing and energy costs go lower and lower every year.
I don't expect the vast majority of ordinary people to have any interest whatsoever in crypto.
I would expect someone that has their entire net worth in paper currency to take steps similar to a bank in order to secure it -- a safe is safer than a mattress, a vault is safer than a safe -- I don't think that it's asking much for someone that is in a similar situation with cryptocurrency to take similarly large precautions.
It takes effort and study to understand how to better secure one's life, this is no different.
They would also have to avoid major exchanges for any operations, because Coinbase KYCs the crap out of you.
Everyone does it, including the most computer illiterate people. Gosh, accountants are super familiar with invoices generated as signed XMLs.
If a very inefficient and corrupt government could do it , I'm positive a private company could find the way.
It's just a matter of finding the right analogies and encapsulating the complexity for people.
As a counterargument: many more complex financial instruments existed for decades now and are not widely adopted because of both the cognitive load and the specialized software needed for participation. Adding hardware to this mix does not seem like a step in the direction of mass adoption.
Just to be clear, I am not saying we should not innovate in this space. On the contrary, the current state of hardware wallets is unacceptable. The only way to make this a viable option is drastic innovation. Just repeating "not your keys, not your crypto" and "get a hardware wallet" is disingenuous.
I think you’re right that it’s still simple, but what’s lacking is a “follow these exact steps” guide. People don’t want to think too much about it, they just want to throw money at crypto.
Something like:
1. Buy X hardware wallet
2. Open account at X bank, store seed phrase in the vault. If your house burns down, your money is safe.
3. Here’s exactly how to use the hardware wallet for all common operations. Do this (and nothing else), and your money is safe.
If it was wrapped up in a nice package with a pretty red bow on it, people would buy into it. But I’d say I’m more crypto-inclined than most tech people, yet I’m still nervous. I was already burned by Gox and not eager to repeat that, so Coinbase is out. Which leaves hardware wallets, which I know nothing about.
I’ve got crypto enthusiast friends who refuse to use hardware wallets because of the inconvenience.
For the bitcoin economy to hold any significant value whatsoever, you need the people who are using exchanges and "banks".
If it works for only a handful of people, you may as well trade unsealed copies of "Zelda II" between each other.
Consider: You had to send fiat to an exchange to buy the coin. Unfortunately before you have a chance to spend it, the exchange halts all withdrawals. How did your hardware wallet help you here?
The point being: “good. not your keys not your coins” is not an appropriate response to exchange insolvency, and further makes you sound like a complete asshat. “just avoid the insolvency window!” is better advice (edit to add an explicit “/s” on this last sentence. Dunno what is with these downvotes).
My point is it’s a base trivialization of the facts, and regardless of whether you use your own wallet or not exchange insolvency is a viable risk to users of the ecosystem. There is nothing “good” about it, and further making broad generalizations like this about financial victims that are not 100% correct is, indeed, asshat-ery. But the latter is merely an opinion and precludes how one treats others.
> Also how do you propose one avoid the insolvency window?
I do not propose it can be addressed, but maybe someone else has ideas.
The first is having an organisation that can't be trusted hold "your" coins for a long period of time. It is a bad idea because you could hold the coins yourself (that is, there is a less-bad alternative).
The second is buying coins from that same organisation. This may not be a bad idea, because the risks involved in the short transaction may be very low, and you may not have a better alternative.
Again, my point is that regardless of whether either of these things is a “good idea” or “bad idea”, it is not fair to call exchange insolvency a good thing; *one* reason here being that the second “thing” “has to exist” for the ecosystem to work.
I really did not expect this to be so controversial a point, but I suppose I haven’t done the best job expressing it.
But I think the reality is you just misunderstood the original comment. The original comment was saying that it was good that people were withdrawing their crypto, not that it was good that any particular exchange had become insolvent. Only after I read your edited original comment did I realise that this is what happened.
When a crypto exchange fails I always say "That was unsurprising. Remember to hold your own coins." A lot of other people say similar things.
I do not say "This is a good thing. I'm sure that now that Failed_Exchange_1001 has failed people will finally learn to hold their own coins." I don't think I've heard many people suggest that.
Well. looks at the dozens of comments in this thread. My bad.
But seriously, write down the 12 seed words, keep it somewhere safe. Make another copy, tear it in half (6 words each) and keep one with a relative and one at work. Check them at 1, 2, 4, then every 6 months.
But for most people this is all overkill: just use a mobile wallet.
This isn't a good idea; every word an attacker knows makes the remaining words exponentially easier to brute force. if you're going to split your key into pieces, you should use something like https://linux.die.net/man/1/ssss
I'm not a fan of 2. I'm definitely in the camp of -- one of the most irresponsible things ever created was third-party password managers. I'm fully aware than capitalism isn't a fan of "sorry, but this is hard and you should just learn it.."
But passwords and security on computers is hard and you should just learn it, at least at this stage.
It is THEORETICALLY is possible to have a world wherein password security is made easier for the user -- but it's not viable until you somehow bring in skin-in-the-game for the third party who's taking on the responsibility, e.g. liability or lawsuits or some other real actual punishment for the third party that screws up.
I started using KeePassXC a few years ago, and I think it's the best thing since sliced bread.
Grandma's little notebook next to the computer isn't perfect, but can be much safer.
Are you referring to something online, like LastPass or 1Passord? I do not like the idea of online password managers at all.
Another issue with PM sites is a couple of them have bumped features up to higher pricing tiers, leaving some people up a creek and unable to access their own information.
If you want money that can be 'fixed' for you by the authorities, well, that's what you'll get. They'll fix it for you real good.
The problem is of course most people do forget things, and regrettably prefer usable systems. This is just to say, we are still far from a system I would call usable, although I would say interesting progress has been made: multisig, hardware wallets, etc.
My only point in this thread is as follows: there is nothing “good” about this. It’s a failure of design and engineering for systems intended for humans. There is nothing to celebrate here, as the OP was oddly doing.
> there is nothing “good” about this.
There totally is, but the good is only apparent to people with the perspective of most of our ancestors. Nixon took us off the gold standard in 71', and yet he lied at the time and said it was 'temporary'. Why was that? We grew up in school being told that the gold standard was a janky old technology that failed leading to the great depression. If that's true, why did we stay on the gold standard until 1971 and why did Nixon lie when he took us off of it?
All of history, property rights have been workable only with armies to enforce them. And what inevitably happens is that the armies will end up stealing from the people whose property rights they are ostensibly protecting.
The existence of property that, in the hands of a skilled user, _cannot_ be stolen, is, indeed revolutionary.
I agree that this system is far too complex for most people. Most people will probably just end up using federated chaumian mints. "All" they will get is the benefit of a currency that doesn't depreciate, year after year, and the resulting cultural shift that arises when people don't need to participate in complex mechanisms they don't understand, just to save for the future.
I think we are likely to see the rise of a technobrahmin class that understands both crypography and ML, and uses this knowledge in the service of tiny micro-tribes of people they grew up with. Civilization has long required specialization, and i think we're about to see a migration of 'trusted information authorities' from places like the New York Times, all the way down the social hierarchy to, 'a guy i went to grade school with that i know is honest'.
(Or as they used to say: Have you ever tried to sell a diamond?)
Was it a few large ones or many small ones?
Why the last 48hr and not two weeks ago? Was there an event that caused this?