> 1. The crypto mantra "not your keys, not your coins" rings true.
I confess that I don't follow this.
I only have assets on Coinbase and generally assume they're reliable enough (from a technical/security stand-point and legal) that I don't bother jumping through hoops to do a wallet on my own device or hardware wallet.
Is it stupid? Maybe, but I think I'd be more likely to screw up somehow with the other approaches.
What you need to be concerned about is if coinbase fails for totally normal business reasons and they halt all transactions, what rights do you have?
With real banks, there are pretty clear pecking orders for creditors vs depositors and depositors have FDIC to cover at least some in the worst disasters.
Would you have higher priority in getting your own coins back over senior debt holders?
“Not your keys, not your coins” is exactly what it sounds like. You really have no say at all in how the above scenario plays out.
There have been a hundred+ years of laws to figure out how to give rights to cash, bonds, equities to people who have them held by an institution. That hasn’t happened with crypto.
The thing is, "not your keys, not your coins" is not just true technically, but true legally. If Coinbase were to become insolvent and decide to use your coins to repay their creditors, you might say, "Hey, you can't do that, that's my money!", and they would-- correctly-- respond, "No, it isn't. Read that user agreement again." They really are not your coins: Coinbase is extending you a temporary permission to access them which they can revoke at any time (and would, if they were in trouble).
By contrast, as another commenter alluded to, fiat banking has an extensive system of laws and precedents that decides what happens in cases like this, which crypto lacks.
I have a similar approach, and with evidence to back it up. All my coinbase coins are still in coinbase. The coins in the wallet on my old desktop that I have somehow misplaced the tower for several years ago on the other hand...
“Not your keys, not your coins” has a doomsday prepper tinge to it. (Not quite as much as someone dismissing centralized emergency management with “not your bunker, not your rations,” but in the same spirit.) Maybe it’s the right attitude for some people, but it’s highly exclusionary as a general rule.
To keep the analogy fair, people would need to regularly get botulism from eating their bunker rations (or some other consequence on par with getting permanently locked out of a crypto wallet).
I confess that I don't follow this.
I only have assets on Coinbase and generally assume they're reliable enough (from a technical/security stand-point and legal) that I don't bother jumping through hoops to do a wallet on my own device or hardware wallet.
Is it stupid? Maybe, but I think I'd be more likely to screw up somehow with the other approaches.