"People don't WANT to 'be their own bank' " \ stacker news ~bitcoin

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"People don't WANT to 'be their own bank' "

363 sats \ 20 comments \ @joda 22 Jan bitcoin

A common buttcoin argument is that people are happy having their money with a custodian who is backed by insurance, pays them interest, and protects them against fraud, theft, and extortion while still allowing easy access to their funds.

I don't actually have an argument against this. Not only do people have a revealed preference for custodianship of their money, but a significant portion of the general public is not capable of safely storing significant amounts of bitcoin.

Do you disagree? This, of course, does not imply bitcoin does not succeed as a store of value, but it does imply that "not your keys" is the norm and banks can presumably rehypothecate or lend with only fractional reserves.

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65 sats \ 0 replies \ @OriginalSize 22 Jan

People generally don't know what they want and that's ok.

Those of us who want what Bitcoin provides will accept responsibility and do the work. We should not be discouraged by those who do not yet know. Their existence is why there's still so much opportunity.

40 sats \ 0 replies \ @john_doe 22 Jan freebie

I think asking a question about the will of people will automatically be biased and I wouldn't attach too much interest to it as I don't think you will get anything significant out of these questions. I would agree that old people with mental disabilities, or kids under 5 yo should not be their own bank, whether they want it or not. For the rest of the population, managing our own wallet is a matter of technological advancement I would say. Just yesterday I discovered bip 67 which allows us to skip remembering the order of our keys in multisig. Until then I was convinced the correct order was necessary but my information was too old and incorrect anymore. I am very optimistic about the idea of being our own bank thanks to this constant refinement of technology. Last day I was reading the story on Stacker news of a Portuguese who lost his life savings in Bitcoin through a hot wallet he was convinced would be fine. Let us learn from that, use technological improvements and manage money with cold wallets!

21 sats \ 2 replies \ @hodlpleb 22 Jan

Most people in the current system cannot comprehend taking that level of responsibility. They want to have a phone number to call when they lose their credit card.

21 sats \ 0 replies \ @TNStacker 22 Jan

As someone who has studied finance and worked for decades to get those around me to take responsibility for their money and investments I can tell you that most people's eyes glaze over when discussing money. Over time, most close friends and family end up asking me to manage their money, which is counter to the point I'm trying to get across.

This will break, but it will take time. Focusing on the developing world, plus the unbanked in major economies is they way. They can skip the banking infrastructure just as developing countries skipped landline communication tech going straight to mobile.

10 sats \ 0 replies \ @joda OP 22 Jan

Do you think these "most people" are going away? Or a generational shift in financial literacy and technical acumen will outpace commensurate malfeasance (scams and hacks and such)?

20 sats \ 0 replies \ @m4 22 Jan

I agree. People want to live a comfortable life. Taking responsibility is always stressful and requires getting out of your comfort zone. I don't think this is going to change anytime soon.

10 sats \ 0 replies \ @0245bdaef2 22 Jan

A domesticated dog does not dream of freedom, but of their next snackie.

10 sats \ 1 reply \ @BountifulB 22 Jan

It's so true. Met a friend yesterday and whose Trezor got "hacked" (they don't know why there was no balance on it) and they started their stack over... but this time physically lost their Ledger device. This is not a person of low intelligence but perhaps disorganized.

0 sats \ 0 replies \ @joda OP 22 Jan

I see the same thing. I think probably all of my friends are smarter than I am, and yet I'm better in the domain of money (and have long experience with the tech of Bitcoin). NONE of them want to deal with self-custody; the ones who bought any bitcoin did so in around 2015-16, kept it on an exchange, and eventually sold.

10 sats \ 5 replies \ @fm 22 Jan

Banks give a false security perception. I know this because during my life, i watched several people having their money stolen from them. From having millions to eat trash. One got so affected he killed the bank manager. And im not even talking about Corralito situations.

10 sats \ 4 replies \ @joda OP 22 Jan

That's fucking bananas. But I also think there would be quite a bit less security, and more violence (at a micro level) if everyone "banked" with Bitcoin in self-custody. From outright loss from mistakes and scams, to wrench attacks. Seriously-- a guy goes to a bar in his Corvette, you wait for him to come out, a little tipsy, and you arrange for him to transfer you a large sum of Bitcoin.

220 sats \ 3 replies \ @fm 22 Jan

Oh, thats happening today.. Here scammers try to set up a p2p deal and they will drug you with fentanyl.. After a while they torture you.. Not sure if the best combo because fentanyl acts as a painkiller.. but you get the idea..

guess people have to keep separate wallets and stop showing off

1 sat \ 2 replies \ @joda OP 22 Jan

WTAF? Where are you? Honduras? Venezuela?

10 sats \ 1 reply \ @fm 22 Jan

Hahha, no buddy.. It’s happening in Spain.. Malaga have a couple situations. Lot of money and a lot of dark money

https://m.stacker.news/13388

That’s one example

0 sats \ 0 replies \ @joda OP 22 Jan

fuck me

10 sats \ 0 replies \ @porterbitcoin 22 Jan

It’s the very nature of the fiat system that makes this possible. There’s room for bailouts at many different layers of the system because fiat is not final settlement.

The world is going to converge on bitcoin as money because it’s finitely scarce. A byproduct of this is that the world is going to be using a money with an immutable ledger. There are no takebacks. This reality will impose greater personal responsibility on all the people who use it.

I don’t think all 8 billion people will hold private keys. But all 8 billion people will have to learn how to use bitcoin in a trust-minimized way.

10 sats \ 2 replies \ @gbks 22 Jan

Just one anecdote, but I spoke with someone recently who doesn't want to hold bitcoin because there is no "insurance". They want there to be a fallback/backup plan and someone to be able to help out when things to south. This person was specifically wanting for the government to be the backstop. Presumably, this person sees government as a trustworthy-enough societal coordination mechanism, probably based on personal experience (Others may obviously not see government the same way).

Whether people are capable or not really depends on what tools we, as builders, build for them. Generally, I think we should assume that people are smarter than we think.

0 sats \ 1 reply \ @joda OP 22 Jan

Some people are smarter than we think, but a pretty good number are pretty darned dumb. Even if they are savvy enough to manage their own money in direct custody, do they want to?

I guess I'm still a maxi in a sense, I'm just very skeptical that most or even many people will self-custody bitcoin itself. I think something like "banks" will exist to hold our bitcoin, insure it, give us interest on it, and provide a convenient way to spend. And anything resembling a bank will be regulated by government, which means transactional oversight and power to stop transactions or entirely "un-bank" individuals.

0 sats \ 0 replies \ @gbks 22 Jan

I think more people will do so that we might think, but it might be a generational change and not something that happens in a few years.

0 sats \ 0 replies \ @joda OP 23 Jan

Just caught this podcast with Lyn Alden where they talk about this issue a bit, mostly in the second half

https://fountain.fm/episode/56k2xlZdUblYJNTD3KqY