Topic: US Advisory on Payment App Risks and Bitcoin’s Position as a Secure Alternative (Read 210 times)

I'd stick with non-custodial wallets for myself, and only keep some in the banks. I believe in bitcoin and its ability to store value for a long period of time, though I don't want to lose my footing on fiat currency as well, so I still keep some fiat on banks just in case. It's better to keep those savings in half so when the other one fails, I still have the other one to use and continue building again from there. Even the governments knew that money apps like Venmo and Paypal are at risk of disappearing in a blink of an eye given how they are not recognized as banks hence they cannot really function like one.

It's surprising to see that they recognized bitcoin as more secure alternative in the first place. The US has a long-standing inconsistency in supporting bitcoin, so them mentioning bitcoin in a positive light is nothing new, although somewhat refreshing still.

IIRC, that's for economic purposes.

• People in Lebanon are holding up banks to withdraw their own money amid the country's financial crisis
• Unrest, Protests In China As Banks Stop Customers From Withdrawing Money From Their Accounts

These was like last year's news.

I couldn't agree more. This is the best way to store wealth and no one can freeze your assets unless you allowed it to stay on exchanges but as usual, it's best to keep it to ourselves with desktop wallets, hardware wallets or any cold storage.

Whenever I get money via PayPal, I just transfer it to my bank account, and I never use any other of the mentioned services. If they aren't well-insured, why not make laws that would require such an insurance?
Bitcoin is great and very secure in this regard, as nobody else is truly keeping the funds and thus can't mismanage them. But it seems to me that the article mixes the position against PayPal with a pro-Bitcoin position, as if the US advisory is actually considering Bitcoin as a safer option, even though it's not the case at all. The arguments for Bitcoin can make sense, but it doesn't mean that an authority like CFPB is endorsing Bitcoin (at least, I haven't found anything but cases where this authority links cryptos to fraud and stuff).

convenience

for instance instead of wire transfering $20 each day to paypal to then buy your $20 train ticket via paypal to avoid "storing". you might aswell just do a $20 bank wire transfer direct to the train operator and just not use paypal. if you were to follow the "do not store" advice.. or even pay via wire transfer $100 for a 5 day ticket to also avoid the daily hassle of wires by only needing to do it each week

most people use payment apps to store because they dont wont the daily hassle of depositing/withdrawing. where they would need to put-in, use, withdraw each day. instead they simply keep the 'change' they didnt spend in the system to use the 'change' tomorrow.. or more precisely they do one deposit a month into a system and then play within the system for a month until nothing is left and then deposit more

the best advice is to not store more then what you wish to spend within a short period(no more then you can risk to lose in a week/month) and to never use a custodial system thats not insured for life savings/long term

bitcoin has become more of a system for the long term hoarding,. with the added benefits of hedging against inflation. however advice should also be given about avoiding custodial use wallets. and also securing the keys. becasue there is no insurance/refund mechanism should a hacker get your keys

For my perspective prefer cash and using it daily is safer, bank can also collapse tho the case is extremely rare. and usually, happen when there is something people inside who are corrupt or there is a major economic turn.

and also paying in cash maybe still be preferred in any nation.

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Tho everything has its own risk including storing money with bitcoin ex. volatility maybe we can make the risk even smaller the example is like diversify the money or we can use the bank but only FDIC can handle the limit after quick google search i found that FDIC has rule "$250,000 per
The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category" - https://www.fdic.gov/resources/deposit-insurance/faq

theoretically, we can deposit in the bank 250K per bank so just open multiple accounts and deposit that FDIC can handle that is 250K per bank.

The reason we are using app like Venmo or PayPal it is because some people think is convenient to do transaction with the app, to reduce the risk that we only deposit a little only for daily transaction and not hold it for long period of time.

Using a non-custodial wallet I feel is a perfect solution whereby individuals can ensure that they are the only custodians of their private keys, reducing the risk of unauthorized access or loss of funds. However, it is very important to follow best practices in securing and managing these wallets, including using a strong password, enabling two-factor authentication, and backing up your private key or recovery phrase regularly as there is an inherent risk of custodial risk.

I am happy to read such news that warns of centralized payment services and bank-like services that can easily make people lose their money, this clearly highlights the advantage of Bitcoin and decentralization.

Paypal and other similar payment services are no different than banks and could be worse. In addition to not providing the same level of protection as traditional banks or credit unions, there is also the possibility of them going bankrupt or banning users for unclear reasons.

Bitcoin cannot be compared to these services and despite all these risks, the government supports them and bans Bitcoin.

We can see warnings about the risks of storing money in payment apps like PayPal, Venmo, Zelle and Payoneer. These apps lack the same level of protection as traditional banks and credit unions, leaving consumers vulnerable to financial instability in the event of an app failure or bankruptcy. Bitcoin, with its decentralized nature, has emerged as a potential safe alternative, providing users with sole ownership and control over their funds. Despite Bitcoin's price volatility, its not reliant on third-party involvement in financial transactions gives users safety from account freezing or bankruptcy compared to other applications. payment use. Its decentralized and independent nature has made Bitcoin an attractive alternative to traditional financial systems and the increasing adoption by financial institutions and notable individuals alike. it highlights its potential. However, users still have to be wary of price fluctuations as Bitcoin is not exempt.

What is the reason for that? While it is possible that a government freeze any account for a made-up reason, I think the chance is quite small unless some economic uncertainty happens in that country. I've seen a few cases where banks failed to get the capital to get their operation going, and then they stop the withdrawal process but they still need to pay their users by selling their assets or getting a bailout. Using Bitcoin to store your wealth is definitely an alternative if you don't mind the volatility.

It's true that we shouldn't leave big funds on these payment apps no matter how long they've been here and how trustworthy they are. People are learning everyday and come to understood that these custodial services have the control over our funds and that's why you don't keep huge amounts there.

That's right and another reason why we shouldn't keep big amounts there is, what we've seen from some bank customers in China and I think in Lebanon too when they've got funds deposited on their bank accounts yet the bank won't allow them to withdraw due to government intervention and command.

I know it's not safe - but sometimes I also think all options have their own risks. For me it's safer to keep some money in a personal safe than in a bank account for whatever reason - but of course some people are more comfortable saving it in a bank account. After all I don't live in any European countries, so paying for something in cash in any amount is fine on my part.

That's certainly true - but we're talking tens of thousands of dollars now, not a few thousand.

I think it's quite important that this comes from the top because that means it will be doing something about it as well, at least it is coming from people who do suggest it to be as good as it gets. I know that it is not going to hurt anyone on the long run but that's how it will act for the time being.

Paypal and all the other payment companies managed to run without trouble for a long time now and they need to be held accountable for what they have done so far, they are doing something that would hurt most people who use their companies, a ton of people have been abused by paypals policies and nobody has done anything about it. The fact that they can freeze any account they see fit has to stop, that's one of the reasons why crypto is so much preferable when transferring money.

Bitcoin doesn't have clear legal definitions and that's done on purpose. The legal framework has purposefully been left ambiguous because it allows for government law enforcement/financial agencies to target private enterprises who are left victim to undefined legal statutes. The SEC lawsuit against binance is predicated on this. They themselves conflate commodities and securities with unclear guidelines and then target Binance with frivolous lawsuits because the U.S. government can't get the statutory verbiage right.

The tax income from trading isn't going to be fueling the governments budget. It's within the governments interest that decentralized currencies do not compete with their own currency.

Well, a safe, despite its name don't think it's very safe if the thieves know what they're doing. What it is better for is to have your money at your disposal immediately but I don't know about how much you are referring to as in Europe it doesn't help to have a lot of cash because there are countries with cash payment limits as low as €1.000 ($1.075).


That is if you have a lot of money in the bank. Tens of thousands of dollars at least. Amounts like $5K you can have in the bank and you won't have any problems withdrawing it and much more depending on the country.

The use of payment applications to store funds may present security and financial risks. This also depends on the security and reliability of the payment application providers. Bitcoin offers a decentralized solution and is independent from the control of centralized authorities, especially amid concerns about security and financial risks. As with any other new technology, the use of Bitcoin can also present risks and users need to understand the legal, security and financial aspects of Bitcoin before using it. The use of decentralized wallets also gives users more autonomy and independence when conducting their transactions.

You can't teach your old dog a new trick.
We all get lazy doing simple things, but the experiences that happen around you are supposed to be a sign for you to stop being lazy and make some decisions. The bankruptcy of some banks requires you to think about what might happen in advance, or at least distribute your money or try to take any reaction instead of waiting until it becomes Your fears are real, and you will find the accompanying line for that bank very long and you may try to withdraw your money for nothing but that others do withdraw their money as well.

I'm going to guess that although some people have lost their money in the Atomic Wallet, some are still using it.

Bitcoiners have convinced themselves since day 1 of Bitcoin that the government and banks want to get them, but they are bravely fighting against their attacks and winning. Truth is, most governments don't see Bitcoin as a threat, because it's so tiny in terms of use, so it's beneficial for them to allow it to be an collect taxes from trading. Inside the US government there are many different views on Bitcoin, it's hard to tell which one will prevail. But it's impossible for the current status quo to last forever, because right now Bitcoin has no clear legal definition.

Truth can be covered but cannot be hidden forever. The Consumer Financial Protection Bureau (CFPB) is speaking the truth and it's great that it is coming from a US government agency. There is no difference between crypto exchanges and major payment platforms since both of them are not insured by the deposit insurance of the nation. Since you are not protected by any regulatory agencies it will be better to keep your investment safe by yourself which is called self-custody. You bear the risk of keeping your funds which is far better than delegating it to someone or an organisation.

The recent hack of the Estonia-based non-custodian wallet Atomic has brought awareness about using open-source wallets. Banks insure depositors fund against loss but they are not insured against inflation. Bitcoin stands out from the crowd because it is a currency, hedge against inflation and investment commodity.

Payment apps aren't a place to store funds. They aren't banks. They serve a particular purpose. There's a reason why they're called payment apps. They should strictly be used as such. They aren't savings apps.

However, at least in my country, there are payment apps that have evolved into digital banks. As such, they offer savings accounts. Money under these accounts are insured by the country's version of FDIC. They are also under the regulation of the central bank. Although I haven't studied them deeply, I assume the country's banking laws apply to them as well.

What Bitcoin offers, though, is entirely different. It's absolute control of your funds. No bank, whether traditional or digital, could offer the same.

That is why bitcoin is the only alternative to those payments platforms but many have mistakenly the solution with other cryptocurrencies other than bitcoin, as the world advances in development with the use of this digital currency against the fiat and other payment systems, bitcoin has been the only recognized digital currency for economy and financial acceptability and reliability, this is also seen with many of the organizations and industries implementing this same technology to advance their system including the former payment system others have been using right before bitcoin was introduced.