If any one of those papers is stolen by anyone nefarious, then they can whisk away all your bitcoin and you have zero recourse as to how to get any of it back. You can do more sophisticated games with multi-sig where you need, eg: 3 of 5 papers to move any money but it’s still significantly widening your attack surface for a discipline we already know humans do terribly at.
I would not want any financial instrument that could not be converted to goods and services, or a different financial instrument, no. I mean this seems self-evident, what are we doing here? I guess it’s:
Okay then, thank you for weighing in with your analysis!
You haven’t made much of a case for them beyond the obvious “anything can be a store of value.”
So please, I’d like to hear your case for Bitcoin/cryptocurrency. Meaning: Why? What’s it good for? How is it anything other than rampant speculation?
I suspect that the vast majority of Bitcoin holders do indeed have multiple backups of their passwords. We only hear about the very few who don’t do proper backups. That’s what makes it newsy.
I remember another story about a bitcoin hoard in which the password was stored on a password-protected secure device. The owner had only ten attempts to guess the password to unlock the device, after which the hoard would be lost forever.
Again, it’s good for trading in goods and services. I’ve shared a few notable examples here, I don’t plan to make an exhaustive list.
But I’m not really interested convincing anyone that Bitcoin is “good for” anything. Like it or don’t, I don’t care. I don’t own it, won’t buy it, I don’t care about replacing fiat currency with cryptocurrency. If any crypto does get government backing, I’m fairly sure it will be something other than Bitcoin.
My interest is that it’s a fascinating phenomenon, and it’s important to get the critiques right, because crypto absolutely is not going away. Entire countries are going to adopt crypto as their currency, Argentina is already getting close to it. It might go well, it might go horribly, but if you dismiss it because you can lose a password, you do not understand even basic banking, and you are not prepared to discuss any of what’s about to happen, or what is already happening.
Of course, it’s not actually worth anywhere near that amount, because bitcoins aren’t liquid enough. If he did miraculously recover the coins, trying to sell that many would seriously deflate them.
Dollars and bitcoins have mostly the same utility (except dollars have more, because you can spend them in many more places), but dollars cost a lot less to make.
And you could lose access to your bitcoins, if you lost your primary hard drive, your backup hard drive, your thumb drive that you keep in your pocket, your cloud backup, and all five of the paper printout backups you’ve made (one in your pocket, one in your safe deposit box, one at your place of work, one at home, and one at a friend’s house across the country). If, that is, you made all of those backups, as any sensible person would do.
Anyone can devalue it, just the same as dollars. Every time anyone says “I won’t accept bitcoins”, they’re devaluing them a little bit. Blockchain establishes the existence of bitcoins, and the ownership of them, but neither of those tells you the value: That’s just based on faith, like any other currency.
Dollars aren’t really the right comparison, though, because dollars are a unit of exchange, and bitcoins aren’t, and that results in them behaving in very different ways. There are hundreds of different businesses in a mile radius from me, selling a wide variety of goods and services, and every one of them prices their goods and services in dollars. And while those prices can change (most of them go up in time), they do so only gradually, in a very stable way. That provides a backing for dollars. One dollar is a fifth of the price of a Wendy’s junior bacon cheeseburger meal. It’s a third the price of a gallon of gasoline. It’s one eight hundredth the cost of a month’s rent in a one-bedroom apartment. It’s all of those things, and because all of those prices are stable, so is the dollar.
Bitcoins, meanwhile, do have value, and can be exchanged for other currencies, and can be traded for goods and services. But nobody at all sets prices in them. Even if someone does sell a hamburger for bitcoins, they’re not going to price it at five microcoins. They’re going to price it at 5 dollars worth of bitcoins, and if the value of bitcoins fluctuates, so will the number of them that are needed to buy a hamburger. And so bitcoins don’t have the sort of stabilizing backing that dollars do.
No it wouldn’t, as previously mentioned in this thread.
This is just asinine. Devalue has a technical, economics definition. You can’t just replace it with a colloquial usage and cry gotcha.
“Devalue” doesn’t mean “decrease the value of”?
There’s exactly two ways in economics to devalue something: increase its supply, and decrease its demand. Refusing to accept bitcoins is doing the latter.
I agree.
I can pay my tax bill in dollars. I cannot pay it in bitcoin, gold, or beanie babies.
I heard about that too. The IronKey device he stored it on is DoD approved so likely uses a pretty strong encryption algorithm. Quite possible the NSA has a backdoor password yet they aren’t going to tell.
Still, having a USB card in hand - even encrypted - is better than the chance of finding a HD deep in a landfill with supposedly a plain text key yet who knows if that can be read.
I looked it up (look for Stefan Thomas Ironkey) and a company has what I reckon to be the best idea - they know how to nix the 10 attempts to I guess infinite. At that point, it woud be possible to brute-force the password (it would be useful to know if it was a phrase or 300 random digits and letters).
a decrease in a currency’s value relative to other major currency benchmarks is instead called depreciation ; likewise, an increase in the currency’s value is called appreciation .
Can’t you just acknowledge that some things are different, and possibly worse about crypto? I mean, the fact that a single passcode is the entire means of access is both good and bad – it’s anonymous, and you aren’t reliant on any external body or government to identify you, but on the other hand, lose that key and you lose everything, for good.
I’m broadly pro-crypto but I can acknowledge the downsides (for bitcoin the main issue being the wastefulness of mining).
Instead ISTM ludicrous to argue that these things are the same because hypothetically you could be a character in a movie where someone takes your home, wife, kids and fingerprints as part of the perfect identity theft crime.
No, I will not engage in false equivalence to appease people who simply decided to hate crypto and are trying to rationalize it. And honestly, the pleading tone here is the tell as to what’s going on.
Since people can’t drop the silliness with the password, let’s just drill all the way into that canard, shall we?
The median participant on this thread is a retail banking customer, not technically sophisticated, and will not be interested in a DIY crypto account like the unfortunate landfill guy. Instead, you will transact Bitcoin through an accredited bank like Coinbase. That bank will collect all the typical KYC identifying documents are required by law. They will create a Bitcoin wallet for you, but you won’t have access to the keys or passwords. They perform the Bitcoin network transactions on your behalf, basically like they execute SWIFT transfers on your behalf for normal accounts. They are the custodian of your account secrets and are liable for it, just as they’d be liable for any other information or valuables you entrust them with.
The only time the password loss scenario becomes plausible is when you choose to forego all of that and run Bitcoin on your own desktop. No custodians, no gatekeepers, just you and your own due diligence. And that is completely optional, it’s not a requirement, it’s your choice to go it alone without the safeguards of government-accredited banking services. (It’s also not simple to do, not something that unsophisticated customers will just blunder into unless they’re really trying hard).
By the way this would be exactly the same situation if every consumer had direct access to the SWIFT network. They could easily lose their credentials, they could accidentally transfer money to a hostile unrecoverable destination. This is not a technical limitation of either SWIFT nor of Bitcoin. Both carry the same risk, a risk that can be (and is) socially mitigated by regulatory policy.
So no, I’m not giving an inch on “haha you could lose your Bitcoin password”. There are many valid criticisms of crypto, this is absolutely not among them. Stop looking for the Achilles heel, it doesn’t exist, there’s just a set of risk and value tradeoffs to be made by people and societies, like every other technology.
I have a lot of bitcoin. All of it in the form of BITB | Bitwise Bitcoin ETF Overview | MarketWatch.
I view all the security / password / etc issues exactly the same as I view my holdings in SPX | S&P 500 Index Overview | MarketWatch.
Yes, there are so many risk mitigations here that it’s hard to mention them all in one post. Suffice to say, as you know, there is zero percent chance of you losing your BITB holdings in a landfill even if you were trying your hardest to do so 
Sure you can go through an accredited bank but isn’t one of the main selling points of crypto that you don’t have to? There’s risks if you do; that’s all we’re saying.
And I disagree that SWIFT is analogous. For one thing, SWIFT is not in itself a bank account. The whole scenario of being locked out of your account forever in a way that no human could ever unlock* doesn’t have any comparison. And it’s certainly not the same thing as sending the money to an untrustworthy recipient, that’s really reaching.
* Apparently older minted bitcoins, which use p2pk are vulnerable to one day being hacked by a quantum computer? If that’s the format of this guy’s 8k coins, likely the first we’ll know of such an advanced QC being developed is accounts like this getting rinsed. But I’ll admit this is the coming together of two topics which I don’t fully grok, so I could be way off on that.
Ah, OK, “devaluing” is a technical term of art that nobody should actually care about, then. Got it. Because what people worry about happening to their dollars isn’t that the US government will establish a fixed exchange-rate system and then formally change that rate in a way unfavorable to them. What people worry about happening to their dollars is that they’ll have their value decreased, by any means.
At which point it’s just like any other bank account, without any of the benefits of bitcoin. Except that bitcoin exchanges are a lot less regulated than dollar banks, and so there’s a very good chance that your “accredited bank” will go the way of MtGox, FTX, or Quadriga.
On the other hand, even if you really do run all of your bitcoining on your own computer, you can still get whatever level of access safety and security you want, and you can set it up so that it’s both more secure and more safe than your conventional bank. Which this guy didn’t do, because, apparently, he’s an idiot. And in any sort of monetary system, once you allow for the possibility of people being idiots, there are lots and lots of ways to lose lots of money.
Diego forbid!, not so close as the ramblings of the hairpiece in chief may make it sound, it would require a lot, and I mean a lot of work.