Posted by Tiberium 23 hours ago
Given things like the ledger hardware attack[1] I think the time indexed risk of using a centralized exchange is probably lower than doing self-custody.
I understand that many people do self-custody for philosophical reasons, but I think trying to disguise this as a security decision ("If your crypto was stolen in this, it wasn't your crypto.") is arguable at best.
[1] https://www.ft.com/content/70f69253-6017-4259-95c9-48bf0e088...
Does this mean you recommend not using one? Because that goes against all the common best practice recommendations from when I did a couple of years working in Web3 stuff a few years back.
> I think it's naive to suggest that self-custody is just a novelty with no value.
That's not what I suggested.
I suggested that it is less secure over time than centralized exchanges, even with the things you listed.
>I understand that many people do self-custody for philosophical reasons
I interpreted this to mean you don't think there are practical reasons to use self-custody, which is why I shared multiple practical reasons to use it over an exchange. Security risk is only a portion of the risk you are exposed to by using an exchange. If you are only concerned with security risks, then maybe exchanges are preferable.
As for hardware ledgers, I'm not convinced that buying special-purpose hardware is preferable to using general-purpose hardware + software for this. I don't keep all my money in crypto though, so maybe I'm just uninformed.
Records are largely a novelty. And predate streaming services.
I'm fairly sure originals are almost universally novelties compared to things that came after.
There apparently is no such thing as “your crypto” with how many security problems there are.
The Bitcoin mining network is somewhere around 1000 EH/s, while the (AI assisted research ahead) 34.5 million H100-equivalent GPUs globally would yield about 0.435 EH/s. They'd represent less than 0.05% of the Bitcoin network.
Then I forgot my pass phrase and have never been able to recover any of it. I don’t even know how many btc were mined/lost.
Before anyone asks, no, there aren’t any usable exploits / vulns found for the encryption methods used. And from what I can tell the coins in question have still sat frozen for going in a decade and a half now. I suspect many other hackers did the same thing…
Edit: I thought he was talking about 2012 but yeah in 2010 CPU mining was still a thing
Possibly Trezor (35 points, 16 days ago, 3 comments) https://news.ycombinator.com/item?id=50078423
> Coldcard’s software is built on MicroPython, and Coinkite supplies its own hardware-RNG wrapper for the device’s STM32 chip. To avoid conflicts, Coinkite deliberately disabled MicroPython’s built-in RNG path by setting a configuration flag, MICROPY_HW_ENABLE_RNG, to zero. The problem: the underlying library checked only whether that flag was defined, not whether it was enabled (set to a non-zero value). Because a flag set to zero is still “defined,” the build silently compiled against the wrong code, and seed generation fell back to a deterministic software pseudo-random number generator called Yasmarang
Tbh the biggest problem is platforms deciding you’re buying drugs because you purchase and transfer out (thanks Venmo)
A paper wallet works as well
A hardware wallet is just a tradeoff between convenience and an extra security risk
Let's say I use an open source wallet, generate the keys, send there a few Bitcoin and then I print the wallet
Now the Bitcoin is on a paper wallet, where's the vulnerability here? (except a crazy ex burning it down, but that's besides the point haha)
An old laptop with the wifi card taken out is more transparent and auditable. It just runs the ordinary open source code
But I just keep all my funds in a hot wallet, no multisig. And if I get hacked I lose it all. I think the answer is just have good security and dont get hacked. The risk of losing cryptocurrency will encourage security advances across the whole ecosystem. I think I will set up multisig eventually
> I think the answer is just have good security and dont get hacked.
So you proposed a way to be more secure, only to discard it yourself in favor of “just having good security”?
In fact, updates are only a risk. You physically remove anything that can allow updates to happen + anything that allows wireless networking.
I agree my approach is not great, I dont own a lot
If your paper wallet, generated offline, used a bad RNG, it is just as vulnerable.
That sounds like your housekeeper's key...
You can store crypto with zero risk of electronic access just using offline wallet generation and an offline wallet. It's not even hard.
This falls under "extraordinary precautions" that few people do and is an enormous error prone hassle.
You could put it in USD and you'd be financing the bombings of schoolgirls in Iran in a pointless and no-end-in-sight war... not saying either is better, but one of them is optional for US citizens, while the other isn't. And the optional one also lets you avoid third-party custodians like Binance.
... Not your coins."
EDIT: lmao even
Some of the crypto scammers use github
Sorry, the likelihood of my banking creds, or other important accts getting hijacked via an infostealer or some other method is about 100x more likley than me buying a tampered ledger device.
A hardware supply chain attack is easily mitigated by inspecting your hardware and buying from a reputable source and not a singular random malaysian shopify site selling hardware wallets...
No, because there was global news and retailers in Germany taking devices off the shelves:
https://x.com/0xJohannes_/status/2109240472933671125
https://www.heise.de/en/news/Crypto-thieves-sell-hardware-wa...
>Sorry, the likelihood of my banking creds, or other important accts getting hijacked via an infostealer or some other method is about 100x more likley than me buying a tampered ledger device.
Sorry, the likelihood of my banking creds, or other important accts getting refunded via any bank or some other method is about 10000x more likley than me getting my buttcoins back.
>A hardware supply chain attack is easily mitigated by inspecting your hardware and buying from a reputable source and not a singular random malaysian shopify site selling hardware wallets...
People bought compromised devices from reputable sources and still lost all their buttcoins.
Im not saying its for everyone, its definately not for normies like yourself
Ive had more money stolen, and not refunded in traditional bank accounts (thousands) than Ive ever had stolen in crypto (none).
Do you price your savings based on 12hours of market volatility, or do you look at it cumulatively over a duration?
Eventually, possibly within my lifetime, a Big Mac meal is going to cost $50.
Is the problem the number or the concept?
Your salary should also go up so the only thing affected is the cash you hold. Would it be better if the currency would be version-bumped every 10 years and rescaled to remove the inflation?
I am curious if I’ll live long enough to see the United States issue higher denomination bank notes again.
The existence of harder forms of money (gold, bitcoin, etc) is an expected consequence of how the system is designed, and not in any way a subversion of it. Somehow, both sides seem to miss this point.
Can you expand here? Governments don't want to incentivize storing value in order to encourage spending, but people want to be able to store value because that's what we've been doing since farming.
Is it because money is a medium of exchange and not a store of value?
So we empower central banks to intervene in various ways in the monetary system in order to achieve low inflation and system stability.
Activity is only the secondary objective. System stability is the first. Stability doesn't mean that markets cannot go up and down even violently. It means that when they go violently up and down, there remains faith in the currency and people are not suffering from mass unemployment, etc.
When a currency is healthy and has low inflation, hard assets are not a threat. Gold doesn't pay any interest, it doesn't have any earnings. You don't need to convince people to buy stocks and bonds instead of gold, they do that by themselves.
When a currency is unhealthy, hard assets can become a threat to it, but notably it's usually other fiat currencies that are the biggest threat.
Hard assets are useful tools for the financial system because they are less correlated with the market. You can criticise Bitcoin in various ways but the criticism that it is a hard asset with a fixed supply that by not inflating somehow damages the financial or monetary system doesn't land. Fiat money is intended to facilitate the existence of markets in other things, including hard assets.
Relative to what? Talk of BTC gaining value is primarily wrt USD; I'd be perfectly happy with my actual currency (GBP) gaining value wrt USD.
I suppose BTC can only 'deflate' in the long-run (and with an assumed supply of goods and services available in exchange for it) since the mintable volume is fixed. But perhaps it exposes that talking of currencies inflating is a bit sloppy, as it doesn't really make sense for BTC, and it's the economy or banking system that inflates really..
You might not, I do.
Tell you what: you go short btc/usd, I'll go long btc/usd, and let's circle back in 10 years and see who did better.
> You might not, I do.
Then you don't want a currency. For something to be money it needs to (among other things) be a medium of exchange, and nobody really wants to trade away a thing today if they know it will be more valuable tomorrow.
Suppose you have some control over currency. You run a country. I'm that case, so you still want the currency to gain value compared to the alternatives?
Your choice is basically: holding currency is more profitable than building a house or running a business (or lending to those who do), or else less profitable. If you run a country, do you want houses and jobs and all that kind of thing, or do you want people to do better if they choose to hoard currency?
If I need a house today I'll buy it. I might not invest in real estate or stocks as much if my currency will be worth more tomorrow but I'll still buy stuff I need or want badly enough.
The bond seller is intending to put it to productive use to generate the yield.
This differs from deflation where people will (more the before) actually sit on money and not buy bonds. Then people who need liquidity cannot get it as the money supply drys up.
It's bad for the economy when money is turned into a stock and just literally sits.
It's fine for the economy if the government forces a flow from it's citizens (taxes) when it then spends that money.
Printing money also produces a flow so that's fine for the economy too. The issue with printing money is not whether or not the US economy will continue to exist, it's whether or not the government will (in more of the USSR -> Russia sense and not anarchy sense).
SPY has outperformed BTC over the last 5 years, and with far less volatility.
last 1 year, last 2 years, and last 5 years are the only "last n years" windows in which SPY has outperformed BTC. There are 19 of those windows to choose from, and only 3 where SPY wins, and that's near the bottom of the trough of the current halving cycle, no less. At the peak of the halving cycle, there are no windows in which SPY beats BTC.
With apologies to Mr. Buffett[0] if you, @anonym29, could wave a magic wand and choose to own either...
A) All 21 million bitcoins or
B) All farmland in the United States.
I submit that only an idiot would pick A.
Convenient date to pick there.
> which of those assets would you have preferred to own and why?
NVDA.
It's a productive use of resources, not a last-fool-standing pyramid scheme.
To be fair bitcoin’s initial years were extraordinary. By any metric you use though the rate of increase has clearly slowed.
BTC has grossly outperformed SPY over the last 3 years (+129% btc, +64% spy), last 4 years (+271% btc, +95% spy) and last 6+ years (6y: +457% btc, +115% spy), and the gap only grows the further back you go.
last 1 year, last 2 years, and last 5 years are the only "last n years" windows in which SPY has outperformed BTC. There are 19 of those windows to choose from, and only 3 where SPY wins, and that's near the bottom of the trough of the current halving cycle, no less. At the peak of the halving cycle, there are no windows in which SPY beats BTC.
That's an odd way of phrasing it, since the $1 is still worth $1, and a naive reading would make you think it's "worth more" when the buying power has actually reduced.
Wouldn't it be clearer to say $1 today only buys you 64% of what you could have bought in 2008.
This is mathematically provable:
1. A dollar in 2008 could buy 1/14tn of the value created by the US economy (the GDP) in 2008.
2. A dollar today can only buy 1/32tn of the value created by the economy in 2025.
It's obvious a 2025-2026 dollar is worth less than a 2008 dollar. That's just math.
But. A dollar in 2008 could buy 230% more of the economy than it can today. And you say its purchasing power has only eroded 64%. That means the dollar is actually worth more today, compared to the size of the economy it's in. Weird, I know.
EDIT: I'm fine with downvotes but tell me why I'm wrong.
Back in 2016 a then-huge Ethereum smart contract called "The DAO" [1] had a loophole that let an attacker extract a third of all the funds.
But a lot of the developers and miners had either lost money themselves, or had friends who'd lost money, or felt the embarrassing incident was devaluing their own Ethereum holdings. So they decided to allow takesies-backsies.
There's probably a philosophical lesson there about power and who the rules really apply to.
Law is downstream of philosophy. Youre forced to deal with conclusions that may be based in philosophy (or they may be arbitrary or self interested). Nobody makes you hold a position on mens rea. In that way you can ignore the philosophy.
In the literal sense, people have been forcing their philosophy on other people for at least as long as we’ve had societies, so I assume it’s not that.
Invent Notion then keep adding features enterprise customers want until you're re-inventing JIRA/Confluence
Who left this stupid fence here?
Ethereum never did it again, rolling back hacks didn’t (and couldn’t) become normal policy. IMO, they shouldn’t have made an exception, as it set a bad example.
I’ve seen a few other small projects attempt to do rollbacks since, but it usually turns into some kind of mess. In most hacks, the coins aren’t time-locked and quickly get laundered through smaller exchanges (and other services) which act as mixers. The stolen coins end up in the hands of a bunch of innocent people, and the rollback then causes way more harm as those users lose their coins.
As far as I understand blockchain, that is the system working as intended. Some nodes choose to run Ethereum Classic and some choose to run Ethereum. Isn't that the whole point? Decentralisation?
Edit: the downvotes are suggesting I'm missing something. I think my communication style could be improved.
That's 80% of the thing right there.
ETA: it's a joke because the original saying is "those who don't know history are doomed to repeat it"
Some people (particularly criminals and oligarchs) might not like them, but most of the structures around financial movements exist for very practical reasons, often stemming from the will to uphold the rule of law. Obviously nothing is perfect (the US have an excessive level of control, VISA/Mastercard are de-facto monopolies, etc etc), but one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators...
One absolutely can, but I think things have to first get sufficiently difficult for ordinary folks to even notice. Fortunately ( sarcasm tag here for otherwise perfectly normal individuals, who may be missing some caffeine in their organism ), given that the war is coming along with various related national security restrictions, we may soon be able to experience that particular slice of fun.
Any recommendations for books? Or even podcasts?
I don't have zero understanding. It sounds like you have a deeper understanding than I do.
It's always been like this. Which is why financial systems blow up and/or collapse regularly.
School! Teachers! Classes!
Seriously, the traditional higher ed system is still a very good place to learn things like this. (I honestly tend to forget about it since academia hasn't really caught up at teaching software engineering, but that's really the exception rather than the rule ...). For traditional subjects like finance/economics, you can absolutely find inexpensive extension courses taught by people who care about pedagogy.
I was transfixed as I read the first half this morning. I look forward to finishing it later today.
And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.
Isn't that a pretty integral part of the blockchain? 51% attacks were even featured on the HBO show Silicon Valley.
[1] https://etherscan.io/address/0xdAC17F958D2ee523a220620699459...
One can also burn tokens, just as one can burn cash, but we don't tend to hold that against either systems since it's purely optional.
Any rules can and have been changed by those with leverage to do so (be that exchanges, miners or devs), in the end any system like this storing value is captured and controlled.
Unless the house is monero or something and you want a lifetime supply of drugs.
> function destroyBlackFunds (address _blackListedUser) public onlyOwner
Don't mess with Tether, it is practically state owned.
- was conducted from his gaming rig
- about Deltec's (and therefore Tether's) money movements being several times larger than all the banking in their country was due to people misunderstanding the country's two banking licenses, the names of which HE "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate?!?), and he "wasn't sure which [banking license] the bank has, but we might (emphasis mine) have both"
- oh yeah, said Deputy CEO's "resume": 33 years old, by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland (called Indepedance [sic] Weath [sic] Management) and uhh... Jacksonville, FL.
Once CNBC's viewers started ridiculing and questioning both Deltec Bank and Tether and when that looked hilariously bad, they removed his info from the bank's website.
And when that looked bad, they added it back.
And when that looked bad, they removed the bank's whole website, and replaced it with a broken WP template with no working links.
Hey, look, several years after that, go to Deltec's website. "Ultra sophisticated private banking" running on a different WordPress site. "Client login"? "This site can’t be reached Check if there is a typo in ebanking.deltecbank.com. DNS_PROBE_FINISHED_NXDOMAIN". Just as has been the case for years.
... and then the entire bank website was replaced with a low-effort WordPress template. Their online banking was Javascript hard coded to refuse all login attempts.
"Sounds legit to me", said the crypto bros. "Fuck the regulatory system. This is the new era."
Let's continue reading...
In this case, iFinex has the explicit ability to freeze funds in Tether.
It always pumps after hacks when they swap to clean it. But it is also just the only crypto that makes sense to be used by regular people.
Your usual non-crypto millinare likely have less money to steal on them than average grandma. Fiat millionare likely have two credit cards and $100 in a pocket. Or useless iPhone with Apple pay. So there is zero profit in trying to rob fiat millionare or billionare and tons of downsides.
And moving any amounts of transparent crypto over $100,000 just paints huge "rob me" target on your person.
It doesnt exactly solve on-ramp / off-ramp, but it hides very well how much you actually have in total.
With nornal crypto you create direct track from a CEX to every place where you spend the money.