Where did you get that idea from? Not from my OP, that's for sure:
> One of Bitcoin's selling points is that it's decentralized. By keeping coins in a cloud operated wallet that you don't fully control, you're willfully giving up control over your own wealth, and needlessly putting your coins at risk.
Please, do not misrepresent my views. I do not have much of an opinion on the security of wallets, because I know that unless you go cold storage, any other wallet approach is about as safe as the one in your back pocket.
You can't seem to stop injecting your own totally unrelated arguments and also seem to refuse to actually comprehend the complaint I aired in my OP.
The concern I raised was one of centralization. The Bitcoin white paper is pretty explicit when it comes to explaining its rationale, and in fact mentions negating centralization in the very first sentence of the abstract:
> A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
So there's really no reason to continue to ignore what I am actually saying, because it's a valid concern that strikes at the core tenants of Bitcoin's intended use case. Your concern, on the other hand, is splitting hairs on a subject that does not at all address the actual, fundamental issue of using a Coinbase wallet. This has nothing to do with Coinbase the exchange, this is about the Coinbase service which offers wallets, to which they and only they control the private key.
You keep claiming I'm misreading you, but this is the precise bit I'm focused on. For most people, and non-technical folks in particular, storing their own Bitcoin is "needlessly putting your coins at risk". They'd be better off having it on Coinbase and letting their security folks handle the risk.
I couldn't care less about the decentralization aspect of the argument, as none of that matters as a user if my coins all got stolen off my phone. It's already quite clear that Bitcoin is moving towards more centralization with stuff like the Lightning network, as the fully decentralized approach is already creaking under the current load.
However, the point you keep missing is the needless part.
This is not needless risk - this is a calculated risk, which you take based upon the fact that it will make access and use of those bills easier than if you didn't take your cash with you when you went out. If you use common sense, you can still be reasonably sure that your wallet will remain with you and will not have any money stolen out of it.
I've lived in New York City since the crack epidemic, and not once has this strategy failed me, but I do knowingly walk around the street with the knowledge that a crafty pickpocket could probably get away with my wallet if they really wanted to. But with my success rate, it looks like my strategy is paying off, and this is an important thing to judge because money is an important component to one's survival.
Let's look at the benefits of not placing your Bitcoin in a centralized wallet which you do not control. The benefit is that you have access to your coins, can move them however you'd like, and pay whatever fee structure you want. Coinbase only offers you the former. By not storing your wallet on a centralized service, your money is not at the whim of that centralized service. That's a HUGE gain. That's the crux of bitcoin's value.
Leaving your bitcoin in the hands of Coinbase is needless risk because your coins are just as accessible and just as easy to steal from Coinbase as they are to steal from any other wallet accessible via the internet. The added risk Coinbase presents is that they control your funds, they own the private keys, and they dictate all the rules for storing and moving your money. Not to mention, they don't give you freedom from the world financial institutions, they make you an ever-larger cog in the wheel of the current financial system. Why the hell would you want that? If you would actually want that, buy some Swiss Francs or some other fiat currency and stop speculating in Bitcoin.
This flies in the face of the entire purpose of having Bitcoin. If you remove decentralization from Bitcoin, then you remove Bitcoin's power and value. So the people who would prefer to not store their Bitcoin in cold storage should not be getting heavily invested in it. If they have real money on the line that could be ruinous to lose, then they should learn how to be a responsible patron of Bitcoin. Any less would be downright irresponsible.
If this is actually a problem for anyone investing serious money into Bitcoin, then they should stop investing in Bitcoin and figure out something else to do with their time. This is not a plaything, this is cash and people who want to invest in it need to do so responsibly. All this reckless behavior being espoused in threads like these all across the internet are just asking for huge, overbearing regulation of the cryptocurrency industry. Watch it flounder and suffer as a result.
I could personally care less. I sold off the 224 Bitcoins I acquired back in 2008 a few days ago and fed the mania. I refuse to participate in this financial moshpit and I will not contribute to this nonsense any further.
This is so transparently false.
Coinbase has a security team that I lack. They have experts in the field that I lack. They have insurance for their holdings that I lack. They have the infrastructure and knowledge to keep cold wallets secure that I lack. None of these lacks can be easily remedied by an individual like me.
They have no ability to use my coins at their "whim". They're a US corporation in a heavily regulated space, money transmission, subject to a whole bunch of laws, both state and Federal. I have far more recourse against them than someone who puts a keylogger on my phone and siphons off my holdings.