Oddbean

These companies think they can make billions without having to learn anything or take any responsibility... they will learn the very, VERY hard way that this isn't the fiat world. #Bitcoin will always punish the fiat mind. https://m.primal.net/KgsZ.png

Is there a regulatory reason they all use coinbase? Why wouldn't saylor (who runs a damn tech company) spin up a multsig solution for his own company? I just don't get this. My tinfoil hat is ringing.

It's going to be brutal, and its inevitable unless we get lucky with a small hack and it scares the shit out of half of these stupid, irresponsible shitheads and they make the necessary changes. Otherwise, there is only one most likely outcome to this story. And they will deserve it.

I'm not the biggest Coinbase guy, but the amount and doom and gloom about them being a custodian is funny to me. As if all of this shit sits in one wallet. There is just no way get past corporate compliance and legal teams without a robust solution in place. Anyone that has worked in IT, especially at a clearance level, knows the hoops vendors have to jump through to get contracts when it comes to critical infra or where the money is held.

You're probably right, but since I have no idea what their process/procedure are, I just focus on the fact that a single entity makes it a single point of potential failure. That's the salient point to me. I have no doubt they are best-in-class, but it remains a single point in a sense.

Yeah, I get what you're saying but it's only a SPoF in the sense it is one company. However, not knowing is a feature, not a bug. We shouldn't know. For example, I work in G IT and our vendors have to be FedRamp compliant. To get that certification, some of their systems can't touch, certain people cannot interact among teams, etc. We get these sort of setups for non-critical data to boot. For critical data, it can get even more stringent.

Totally agree I shouldn’t known but intend to assume that in the long run every SPOF is guaranteed failure but that’s because I’m a lawyer and all I think about is worst case scenarios day in and day out lol. Thanks for the thoughtful replies though it’s good stuff.

This is Bitcoiner doom porn. They will sue the US Government. The US G isn't in the business of getting sued by every large financial institution on the planet. They do not want that smoke. It also doesn't make a lick of sense considering the common belief that gets parroted is that BlackRock and their ilk bought the politicians and secretly run shit. Can't have it both ways.

Just look at history. I would not assume that there will always be something like a "rule of law" that delivers justice to you. This thinking makes sense in corporate world which operates in a horizon of maybe a decade, but not for Bitcoin world which has an ambtition to be universal money for the forseeable future.

They won’t sure the govt if the govt puts them in charge of the new “govt bitcoin banking reserve.” Easiest way to consolidate power is to give a little bit of it to the people who have the capital you want to control. The govt would easily PR their way to controlling what they need to if it’s left this centralized and vulnerable. If it’s an existential choice between the govt status quo and the people’s rights, there is no ambiguity in what decision they will make.

Disagree. The lawsuits would just move down a level. There would be multiple class-action lawsuits by shareholders against all of these companies for not upholding their fiduciary duty responsibility. This would get hella messy and there is no way the G could PR their way out of this; Especially with how polarized politics and ideologies have become.

I think the shifts in the political environment in the past few years has made it far less likely, but I think that also depends on how hard they come down with the hammer if they consolidate more power in the next few years or not. I’m hopeful in that regard though. I think they are losing their grip on things and general dis-consensus in the political power world is good for us.

I think it is a mistake to equate the many hoops around regulations as “security,” when I know multiple people who tried to get regulatory approval, and ended up having to refuse because it would have deliberately *weakened* their actual security to follow their requirements. For the regulations to make sense from a bitcoin keys perspective, it has to understand them. I find it extremely unlikely that they do. There are likely areas where some of it still applies, mainly in basic computer access, user controls, and possibly physical separation. But the idea that this properly translates to the bitcoin environment and doesn’t either leave them vulnerable to accidental data loss (because you can always “roll back” in fiat) or exposure of keys in a different way (because authority overrides mistakes in fiat) I think would likely be naive. If you want to argue that regulations work and that incentives are aligned, I’d probably just point to the AAA ratings for MBS’s immediately prior to the worst housing collapse in this countries history. “Corrupt” or “incompetent” I think are far more broadly accurate terms when it comes to describing our regulatory systems.

I'm surprised more people that choose to by the ETF haven't gone with FBTC. Yeah it's an ETF, but Fidelity has its own internal custody solution and has a long track record in the space, with one example being that they started mining Bitcoin in 2014. Yet, everyone seems to just ignore it lol

Coinbase custody bitcoin for loads of people and companies including most of the ETFs. The concern is that someone could hack Coinbase and steal all that which is around 10% of all bitcoin there will ever be.

Zapos dude, wots-his-name, apparrently helped ben whatever(coinbase dude) develop some prettt fk'n high-tech custodial services with biometric scanners that have heartbeat sensors so you can't use a dead mans hand etc

Okay lots of doom porn in here and I wanna contribute! I don't think the government would just 6102 coinbase, too much heat for them and they would clearly be the bad guy. Bad for narratives. Scenario: Government is teeing up a massive black swan event. Suppose some fed spook commands key people in Coinbase to leave vulnerabilities. Hackers rush in and sweep Coinbase's Bitcoin. What would happen? Every ETF except Fidelity collapses. Plus whoever else was custodying with Coinbase. What would the boomers learn from this? Not your keys not coins? Don't centralize custody? No way, tradfi talking heads will be screaming "told you so" about the fake-internet-money-hacker-coins. Everyone runs back to the "safe" fiat institutions that don't have hacking problems. Mainstream adoption is set back many years. Every inch gained in "number go up" from the ETF demand evaporates. This mental high we have been riding in 2024 from all the mainstream adoption is suddenly gone..... Why would the feds do this? Squash a threat to doller hegemony. Psyop the public into staying on the sinking ship. They get to save us with Crypto regulation, and everyone who sank with Coinbase will be crying for blood. Imagine grandma testifying before Congress who lost everything with the ETF.....