Let's say I have a 3-of-5 multisig. That means there are 5 hardware wallets. I put a hardware wallet in my safe in my house, one in a bank deposit box, and 3 with 3 friends or relatives.
Now a thief needs to steal 3 of these to steal the coins. That's going to be hard for a thief to do. If a fire or natural disaster happens, it needs to destroy 3 wallets before I lose my money.
Yes, it's a low risk. Perfectly executed this is maybe a risk of one in ten million. So on a worldwide scale this means that it would happen every day, to someone.
But it won't be perfectly executed. Let's say you need to do a transaction while you're moving house. And maybe one of your relatives is in financial trouble.
You (probably) don't have the means to do what banks do, and hire an armored transport.
With collaborative custody companies like unchained, this is actually not as difficult to do right as you're making it seem.
Further, unlike an armored truck full of cash, security by obscurity is really easy here. That and for a short duration (say moving houses as you suggest) one could wipe a cold wallet clean and just remember a seed phrase. Personally, I don't have enough wealth to make this sort of maneuver at all worth it, but it's completely do-able.
I was once running a service that had redundant ISPs. None of them had had an outage in years. Then we needed to do a change, the first one ever that required disconnecting one of the ISPs. In the 4h window of our planned job the remaining ISP had its first outage that affected us. We had to apologize to many big name customers that depended on us.
Since then I don't believe in short SPOFs.
You could get hit in the head by a robber on your way moving your furniture, because the robber thinks you may be hauling high value stuff, and lose the passphrase. If you back it up on paper then the unguarded house may be broken into, and they steal the bag that had the paper passphrase.
Extremely unlikely that it'll happen to you, but extremely unlikely things happen all the time to someone.
I feel what you're saying is true, but not really something that should matter in a criticism of BTC when BTC is actually easier to secure than other dilution proof assets like gold.
3/5 multisig with collaborative custody would likely already be at least as safe as dollar checking accounts.
I would also recommend against keeping assets as gold in your basement.
> 3/5 multisig with collaborative custody would likely already be at least as safe as dollar checking accounts.
I think that's off by orders of magnitude. If the whole US did this then I'd expect thousands to screw it up every year.
"Just don't make any mistake, ever" doesn't scale. Not to more people, and not to any one person, given enough time.
It's like running a yellow light (and the occasional red, when you thought it'd be yellow a bit longer). You can go your entire life never being in an accident. But there are accidents every day because people run yellow lights.
But aren't we still pretending that crypto is a currency? So this means anytime I actually want to spend some of my own money, I need to go to the bank deposit box and also find at least one friend to help me out?
If we are all just taking these coins out of circulation to make them as hard as possible for anyone to access, including ourselves -- then what was the point of the entire thing again?
> If we are all just taking these coins out of circulation to make them as hard as possible for anyone to access, including ourselves -- then what was the point of the entire thing again?
> But aren't we still pretending that crypto is a currency?
These are such smug comments.
> So this means anytime I actually want to spend some of my own money, I need to go to the bank deposit box and also find at least one friend to help me out?
No, it means you have options to fully secure and own crypto assets in a way dollar bills or bank accounts never allowed. You don't have to do it this way, but if you actually have wealth, you should protect the larger portion of it.
If you have $1000 worth of BTC, just carry it in a hot wallet.
If you have $10000 probably put $9000 in a cold wallet and $1000 in a hot wallet for spending.
If you have $100000, you should probably use 2/3 or 3/5 multisig with a collaborative custody company like unchained capital.
If you have another order of magnitude more money than that you probably know better than myself how to hold your wealth.
In any of these cases, you have full control. Nobody can move your BTC without your sign-off. Your capital cannot be rehypothecated.
So in response to your smug question, yes lock away in deep dark vaults your wealth should you have enough to care about. For daily spending walk around using your hot wallet.
Your comp sci oriented since you're on HN, so if that still doesn't satisfy you, then think of it using caching layers. Keep the bulk of your wealth (should you have enough to justify it) in an L1 deep cold storage, then another smaller chunk in L2 cold storage in a single wallet, and finally L3 in a hot wallet for daily spending.
Another way to view it is if you want anonymity and sovereignty over your dollar bills, you have no choice but to secure it yourself -- probably in a safe.
If you're willing to let someone be a dollar custodian (banker) in today's system, they'll only keep a fractional reserve and lend it out. In actuality today they have other more complicated (but lesser) reserve requirements and without the FDIC bank runs would be commonplace. There's then a whole discussion about the solidity of the FDIC and whether it may collapse.
Fractional reserve systems create the banking cycle and is why we have booms and busts. Ponzi's and fractional reserve systems in crypto are why the crypto market just boomed and busted. There are a small number of legitimate crypto currencies and they're value is tied to the illegitimate ones simply due to crypto-crypto liquidity vs crypto-fiat liquidity.
In this thread nobody is taking a holistic view of what BTC provides.
Even comments that say we're not talking about valuation.
The problem is valuation is part of the reason BTC matters. Sure, you can get custodial security in dollars, but they'll be devalued for banking and governmental purposes.
BTC is sound money that's actually easier to store and use than Gold/Silver. That to me is the way to view it.
I assume one of the signatures is my hardware wallet. Who holds the other signature? Do they have SIPC insurance?
What happens if my wallet is lost or destroyed?