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Comment by zuck9 | Hacker News Reader

This is another reminder of why people should be using hardware wallets.

It is relatively super cheap compared to the value of 1 BTC.

It all depends what you calculate to be the biggest risks that you're protecting against. If it's collapse of world civilization, or at least your own country's institutions, then storing your own coins makes sense, and yeah a hardware wallet is a better way to store it than on your computer.

On the other hand, if you're more worried about getting hacked or simply losing your private keys, having your house broken into and the wallet stolen, etc. you're probably better off putting it in Coinbase with a strong password and 2FA enabled. The same way you protect other things you care about like your bank account and 401k.

It's odd to me that this is so highly frowned upon in the cryptocurrency communities though. People with very little knowledge about computers or infosec are constantly pressured into storing their own coins, which is fundamentally pretty user-unfriendly just due to the irreversible nature of it where you can't make a single mistake.

I guess this is a response to mtgox and other exchanges that turned out to be insolvent. Moreover, it prevents the situation where an ill regulated institution denies you access to your credit. See also the stories about PayPal accounts being frozen.

> you're probably better off putting it in Coinbase with a strong password and 2FA enabled. The same way you protect other things you care about like your bank account and 401k.

This is not a good idea. There is a big difference between your bank account/401k and crypto. If Coinbase gets hacked, you aren't really getting your crypto back. If your 401k account gets hacked, there is at least some recourse.

> If it's collapse of world civilization, or at least your own country's institutions, then storing your own coins makes sense

Why would cryptocurrencies of all things hold value amidst a collapse of world civilization? In those environments, food, guns and ammunition rule.

Cryptocurrencies are the worst possible store of value against the collapse of civilization. Did you forget that you need a functioning internet and electrical grid to use cryptocurrencies? This type of thinking does not reflect a realistic perspective of how the world works.

They're a hedge against a particular kind of collapse of society - one in which the currency collapses (hyperinflation) or the nation-state backing the currency collapses (revolution/coup/regime change/tyranny, followed by asset seizures). If everybody is shooting each other and there's no food in the stores, you're fucked regardless of how many Bitcoin you own. If there's a nuclear attack and the electrical grid is knocked out, your Bitcoin isn't going to be accessible. But if the hard assets & businesses are mostly functional but just don't know how much they're going to get paid tomorrow because the value of a dollar is 1/4 what it was today, Bitcoin is pretty handy. And if the government decrees that the bank accounts of certain persons who are politically opposed to it are now property of the government, Bitcoin is pretty handy.

While I think a number of Bitcoin maximalists have the former couple scenarios in mind, and agree that their beliefs are illogical, the latter two scenarios are actually much, much more common in recent history. Think of Zimbabwe or Venezuela in the present day, Greece in the financial crisis, Russia after the fall of the Soviet Union in the 1990s, East Germany after the fall of the Berlin Wall, Latin America seemingly every decade since the 1950s, or China during the Cultural Revolution. Bitcoin could've saved lives and fortunes for many of the people affected by these. Indeed, it's held up fairly well for people in Venezuela and Zimbabwe, the two countries to face major currency crises since Bitcoin's invention.

> They're a hedge against a particular kind of collapse of society

I'm sorry, but do you not see how absurd that sounds? It's a hedge against a particular kind of societal collapse? This is just totally impractical. The reality is that bitcoin traffic in Zimbabwe and Venezuela is extremely miniscule; that's because you can't actually buy much of anything with cryptocurrencies, especially useful goods like food, water, medicine and guns, and trying to convert cryptocurrency into real money is fraught with obstacles and risks (i.e. if you try to do an in-person conversion). Cryptocurrency is not a realistic hedge against any kind of societal disruption.

Well it's incredibly difficult to quantify the risks associated with BTC storage, so it's very difficult to take appropriate action. The pro of storing your own coins is not particularly better security, but more control of your security. You can do physical backups, encrypted copies, securely store them and make decisions about the physical risk of your coins over time. With Coinbase you're putting your trust in their security and you really have no control. It may well be safer in reality, but the attack vectors are all things you can't have any influence over.

Here’s today’s CCC talk about hardware wallet vulnerabilities.

Apparently some can’t be fixed without new hardware. I can’t watch until later :(

https://fahrplan.events.ccc.de/congress/2018/Fahrplan/events...

> This is another reminder of why people should be using hardware wallets.

Which ones? There have been reports of many getting compromised.

I thought the best way to secure your Bitcoin was to print it out on archival grade paper, encase it in twenty layers of plastic, dig a hole in your backyard and bury it.

Of course, if that got compromised, then it is still your fault because obviously you didn't dig the hole deep enough, or didn't cover it with grass, or you should have gone out into a remote forest and buried it there (I sure hope you left your cell phone off while walking to the location or you might have been tracked!)

Always remember: Bitcoin can never fail, it can only be failed.

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