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Comment by xur17 | Hacker News Reader

But at least in crypto I have the OPTION of storing it myself.

Also, if I do decide to use a custodial provider, I can choose to use a provider that publishes proof of reserves [0], giving me more confidence in the provider.

[0] https://www.kraken.com/proof-of-reserves

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> But at least in crypto I have the OPTION of storing it myself.

You have the option with Fiat too - you can get paper currency and store it yourself in a secure location. $10,000 can be stored in $100 bills in as little as c0.03 meters^3.

Using a bank is much more convenient to store Fiat though if you want to buy/sell things, much like using an exchange to store Crypto is much more convenient if you want to trade crypto (because let's be honest, not that many people are using Crypto to buy pizzas!).

Indeed cash and gold have existed forever for people who didn’t trust banks…

Storing a 12/13 word string in your head for a cold wallet puts it into territory a lot closer to a bank account, and in the US normally words in your head can't be seized via court order (there are some exceptional circumstances, but they're far more limited than freezing bank accounts).

I think it's closer to hiding a pile of money personally.

The security is based on you remembering a 12 word string or geolocation, and the string/geolocation can't be siezed via court order (other than exceptional circumstances, or by finding the location/keys).

The 'storage' in both instances is decentralised. If you forget your 12 word string or geolocation, you lose your money.

Banks on the other hand:

* Provide convenient and safe access

* Will invest your money (in exchange for interest).

* Allow you to reset your credentials if they are forgotten (by proving identity)

* Are centralised

Clearly the advantages and disadvantages have both overlapping and mutually exclusive elements. For this reason It makes sense to me that some may choose to diversify their holdings by taking advantage of both. To me relying fully on the bank doesn't seem safe at all, as the IRS and other agencies have been known to arbitrarily seize accounts based on absurd claims of 'structuring' even for sub 10k deposits [0]. Crypto is volatile, and you can forget your seed string, but nearly impossible to seize if appropriate precautions taken. Local value like land/durable goods retain value largely as long as you can defend them by force, but are poor choices when fleeing.

As time moves on it's clear to me all these assets are becoming important members of the financial landscape. If crypto were merely a degraded version of the dollar, then I don't think so many people would use.

[0] https://ij.org/report/seize-first-question-later/

crypto has a lot of traits of a bank without the bank. Fast transactions (as opposed to carrying money to different locations), secure storage (as compared to having guards for your hoard of gold), it does not rot/burn (if you backup keys adequately) and many others.

All of those are more convenient than storing dollar bills or gold bars. So, yes, fiat has options, crypto is another kind of option and probably the most convenient for self custody, hence a very good one to avoid trusting institutions.

> You have the option with Fiat too - you can get paper currency and store it yourself in a secure location. $10,000 can be stored in $100 bills in as little as c0.03 meters^3.

That's really not the same though. With crypto I can store on a hardware wallet that requires a pin to unlock (and resets after 3 attempts) with a backup seed stored elsewhere (potentially split up in n of m shares). How do I backup my cash? How do I lock up my cash in a similar way?

In addition, I can setup "smart" wallets that require an approval from another person to initiate the transfer. Or forces a cooldown period on transfers. None of this is possible with cash.

> How do I lock up my cash in a similar way?

You buy a vault or a safe, which you can access with a 'pin-code' (in the fiat world this is called a combination lock). Safes come with two keys, which allows you to keep a backup of your 'secret' elsewhere, and you can also insure the cash inside if you want to pay for a full 'backup'.

In addition, "smart" safes and dual lock safes are available which have two keys, mean you need approval from another person to initiate the transfer.

It's not an exact 1:1, but you can hardly say that you don't have the option of storing Fiat by yourself.

That’s great, and also moot when the vast variety of coin holders opt for the convenience of a centralized third party service instead.

With fiat, you also have the option of storing gold yourself.

You can fit $1 million in a briefcase in a safe. No need to rely on fractional reserve banking to store your money.

Granted, that would be stupid, but it's certainly an option.

The problem with fiat is a completely unknown monetary supply function. Gold makes a lot more sense IMO in your scenario as there's a finite amount in and on the earth, and it would take a scientific breakthrough to economically create more than that.

That's nice, but it's unrelated to the issue I'm talking about. If we care about crypto widespread usage, we have to look at what most people will do, and most people will choose convenience and won't have enough knowledge/interest/time to make informed decisions. Relying on "but you have the OPTION to do it properly" just leaves all those people behind and vulnerable to scams and situations like this. And ultimately, as the parent comment says, crypto will just speedrun financial history and find out why regulations exist.

>But at least in crypto I have the OPTION of storing it myself.

... what do you call putting cash in your wallet?

The equivalent of writing my seed phrase down and storing it in 1 location.

With crypto I can:

* lock my cash on a device behind a pin (with forced reset after a few attempts)

* back it up in multiple physical locations, and require n of the m recovery locations to be accessed for recovery

* memorize the seed phrase before escaping from an oppressive regime

None of this is possible with cash in my wallet.

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