Why do people use custodial wallet services?

ABCbits

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Quote from: avikz on September 14, 2016, 09:40:26 AM

I think the reason behind using the custodial wallets like coinbase is the ease of using. You don't have to download the blockchain to your computer which is close to 300 GB. Also you can access your accounts from anywhere, you don't have to carry your laptop everywhere. These are the main reason I guess.

Also I see no reason to worry if you are holding a small amount of bitcoin in these wallets. But if you are holding some serious amount of bitcoins then it is recommended to use a hardware wallet.

That's 100% wrong, you don't have to download whole blockchain or run in prune mode. Blockchain size is still about 80GB for now, not 300GB.

There's lightweight wallet which some people call it as SPV (Simplified Payment Verification) wallet which allow user to use bitcoin wallet on desktop/mobile without download whole blockchain such as Electrum, Multibit and Mycelium.
The apps are very light, very easy to use, more secure than most online wallet and you have full control over your bitcoin.
Even you only have small amount of bitcoin, i would recommend you to use desktop/smartphone wallet.

avikz

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I think the reason behind using the custodial wallets like coinbase is the ease of using. You don't have to download the blockchain to your computer which is close to 300 GB. Also you can access your accounts from anywhere, you don't have to carry your laptop everywhere. These are the main reason I guess.

Also I see no reason to worry if you are holding a small amount of bitcoin in these wallets. But if you are holding some serious amount of bitcoins then it is recommended to use a hardware wallet.

TraderETH

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

I think people like coinbase because of it is can be trusted and it were run for long time, although it is like paypal they can block our account. And usualy the costumers has be comfortable with its service.

tee-rex

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Quote from: blackcod on August 30, 2016, 09:29:05 PM

I learned a simple lesson early never leave your btc on any exchange wallet. You have no control of your funds as long as you leave it there.

Yes, exchanges are hacked periodically (or just scam on their users like what Cryptsy did), but if you are a day-trader (or close to being that) you may not have any other option apart from keeping your funds in your exchange account. Until distributed decentralized exchanges kick off for real (if ever), you have to either risk your money being stolen by hackers (exchanges themselves) or stay away from Bitcoin trading altogether missing out on a lot of good opportunities to earn decent profits.

blackcod

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I learned a simple lesson early never leave your btc on any exchange wallet. You have no control of your funds as long as you leave it there.

Kakmakr

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Some people are convenience driven and too scared to take responsibility for their own finances. It is also easier for them to link their bank account to these services and then convert fiat to BTC. Some merchants will also only deal with other financial services that adhere to KYC & AML regulations. ^hmmmm^

Divinespark

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I think the reason has a lot to do with social conditioning around not wanting to take personal responsibility for your own finances, and just being so used to having other folks take care of your assets. Cryptos make you take responsibility, not for everyone!

Wong_Djadoel

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If they block our account, maybe we doing violation or rules. I recommend if we don't use custodial wallet service if we have big amount.

shinratensei_

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

you don't need for considering from 1 perspective, in another reason they are using the custodian wallet like coin base because they are not just offering a wallet. they are offering an exchange at the same time. they are considering from a lot of factor before wanna for using a custodian wallet.

garmerys

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They are easy to use and many people don’t want to sink more than $100 into something they know nothing about. They are there for beginners and as you grow your bitcoin wealth you learn how to protect it better. They are simply learning sites that are easy to use.

konovalets

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Quote from: tee-rex on August 19, 2016, 09:22:18 AM

It may also happen that most people are not that tech-savvy, but wise enough not to trust themselves to store their coins locally, in their own desktop wallet, where the coins will be prone to theft by viruses, trojans, etc. I mean these people are not sure that they can provide the required level of security themselves.

I agree that keeping all coins on desktop wallet especially on Windows it's risky too, maybe even more risky than using Coinbase for unlearned user, but there are a lot of solutions between Coinbase and desktop wallet which mitigate both risks. BitGo, Copay, even Blockchain.Info is better.

Leonard2016

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

it is the choice between an easy platform like coinbase where you can store bitcoin as your wallet and also trade it there too
and choosing a wallet, installing it, sync wit the network and keeping it safe and secure.

so most people ignore the risks of using web wallets and use them because it is easy.

Strongkored

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

Finally, many are aware of this. I think it is too risky if you have a wallet but did not have the private key from the wallet. Because anytime something bad could happen. I want to add the above example. This applies also for the wallet exchangers, and we know many cases exchangers which carry off the money their customers or hacked. IMO

pooya87

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Quote from: StarofBTC on August 19, 2016, 09:45:01 AM

Quote from: Piladeer on August 18, 2016, 12:36:21 PM

Well that is a good question that many of the people who use it must ask themselves.
Why do they trust in these services with their bitcoins?
I am dammed sure that I will not ever trust paypal with my money. Angry

do you think the millions of online users are wrong or doing mistake by trusting bitcoin? you are doing nothing but just spreading bullshit here.
paypal is the number 1 payment source of the web with no doubt. and it is trusted of course.
if paypal banned someone's account or frozen somone's money then they have valid reasons too.
don't accuse paypal with no reason guys.

millions of users use many different services that are trusted, do you know how many people thought like you and used MtGox+Cryptsy+bitfinex+Bter+many more exchanges that scammed them and they lost their money?
and yes paypal is the number 1 payment processor but it is also number 1 for scams and customer un-satisfaction. the charge-back is the nightmare of the merchants.

2legit2

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

i never use it because of that, in my opinion its not worth using it, i definitely like to have my bitcoins in my own wallet where no one can take it

StarofBTC

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Quote from: Piladeer on August 18, 2016, 12:36:21 PM

Well that is a good question that many of the people who use it must ask themselves.
Why do they trust in these services with their bitcoins?
I am dammed sure that I will not ever trust paypal with my money. Angry

do you think the millions of online users are wrong or doing mistake by trusting bitcoin? you are doing nothing but just spreading bullshit here.
paypal is the number 1 payment source of the web with no doubt. and it is trusted of course.
if paypal banned someone's account or frozen somone's money then they have valid reasons too.
don't accuse paypal with no reason guys.

tee-rex

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It may also happen that most people are not that tech-savvy, but wise enough not to trust themselves to store their coins locally, in their own desktop wallet, where the coins will be prone to theft by viruses, trojans, etc. I mean these people are not sure that they can provide the required level of security themselves.

beamforming2

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sometime,the new don't know the risk!

Denker

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Quote from: konovalets on August 18, 2016, 09:39:38 AM

Like Coinbase. It's like paypal for bitcoin, they can block your account at any time or just vanish into thin air.

Mostly because they are lazy and still used to banks.
Believe it or not but many people don't want to take responsibility for their own money as well.
Sounds crazy right?!

calkob

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I think most people trust a company more than they trust themselves sometimes, which can lead to a loss of there bitcoin, but it can be hard for a newcomer to the bitcoin scene to put their bitcoin on to paper wallet or hardware wallets.

Topic: Why do people use custodial wallet services? (Read 1910 times)