Why use decentralized bitcoin in a centralized way? - page 4.

btcinfo891

jr. member

Activity: 47

Merit: 20

I can think of the following reasons why users prefer centralized services

Arguably centralized services are easier to use.
In some cases centralized services have lower fees when transferring crypto between user accounts in the same platform.
Almost always centralized services have lower latency when transferring crypto betwen user accounts in the same platform.

For new users the first point (easier to use) is what attracts them to centralized services.
For some experienced users (e.g. daytraders) the second and third points (low fees, low latency) is crucial.

albon

legendary

Activity: 1862

Merit: 1518

The concept of centralized exchange platforms is contrary to the decentralized approach in which Bitcoin was founded. Centralized platforms are considered like banks, with KYC and AML procedures and strict policies. They are the primary controllers of your assets and your private keys.

Although many decentralized Bitcoin wallets are available for free, the most secure are hardware (cold) wallets that are not connected to the internet and can be purchased for a fee. Custodial wallets, on the other hand, are not safe if the centralized exchange gets hacked, users' data is collected, and their privacy is compromised. However, CEX users might be inexperienced or not fully aware of what they are doing, prefer using features like P2P trading or other types of trading, or want to take advantage of the offers provided by these CEX platforms... These may be some of the reasons besides their laziness.

mk4

legendary

Activity: 2870

Merit: 3873

Paldo.io 🤖

There will always be people that will use/hold BTC in a centralized custodian, period. Especially those who don't have the technical knowledge to secure their own coins via self-custody(mostly old people), and those who are going to declare their holdings to the IRS anyway so they hold the BTC through ETFs instead to decrease complexity with taxation.

What's important is that we have the option to hold via self-custody; regardless what other people think.

thecodebear

hero member

Activity: 2240

Merit: 848

Quote from: Floxynice on May 20, 2024, 03:11:03 PM

Pardon me if I am digressing, I am still in the learning process.
I have been reading about Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized. Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

You can do anything you want. Bitcoin by default allows you to hold your own money. There is no club you have to join haha. You just send your bitcoin to your own address. That's it.

People use centralized services because they are used to them and care more about convenience that taking full advantage of Bitcoin, or for a lot of people they don't even know you can store bitcoin yourself. But in general most people are gonna choose convenience, so it is no surprise that lots of people choose to keep their bitcoin with custodians rather than do the little bit of effort to make a bitcoin key-pair and send the transaction, and then keep their private key safe and secure. As more and more of the general public buy Bitcoin, more and more people are going to be using holding their bitcoin with custodians rather than themselves.

We can educate people all we want, but most people are still gonna choose convenience of 'banking' their bitcoin with an institution, even if its not particularly smart or safe. All you can do is decide what is best for you, so just make an address and send your bitcoin to it and you're done.

The Hidebehinder

jr. member

Activity: 29

Merit: 3

Fear and the issue of not trusting themselves and their knowledge with the amount held.

Happened to me when I had a pocket full of cash from a sale and I immediately rushed to an ATM to deposit it to my account rather than going around with what was one year and a half of rent money and I don't see it being that weird for users who are afraid of viruses, that lack technical knowledge that don't trust their roommates and many more cases to feel better knowing the coins are in somebody's else care, despite making the mistake of confusing a Cex that might be run like FTX was with a bank that at last is FDIC insured.
It's not the way it should be but blaming somebody for choosing the easy way of escaping responsibility it not either either, I have done thousands of tx so much that my wallet started freezing my computer when loading and I still triple check every address, every fee, the messages with the client, and so on, some guys would simply not want that stress.

Cookdata

hero member

Activity: 1106

Merit: 912

Not Your Keys, Not Your Bitcoin

Quote from: Floxynice on May 20, 2024, 03:11:03 PM

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized. Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Consider people who used Bitcoin in centralized platforms as lazy and ignorant users. Bitcoin itself is a freedom but people leave the freedom behind and chose after the value it add to them and as long money is made, they be like "who cares"?

The fact that the rest chose to ignore decentralization, that's there problem, you can choose your own way, run your own Bitcoin node, buy a hardware wallet and be your own bank and support the network by running the node 24/7, you are adding value to the network and those who chose to use the centralized entities can continue to hide their password from a place they don't even own the private keys.

Hatchy

sr. member

Activity: 336

Merit: 365

The Alliance Of Bitcointalk Translators - ENG>PID

Decentralization is a feature introduced with Bitcoin, allowing anyone to fully control their coins. You have the option to use Bitcoin in a centralized or decentralized manner. But it's important to note that Bitcoin was originally intended to be decentralized. Satoshi's primary goal in creating a decentralized currency was to empower users to act as their own banks, keeping their funds independent of governments or centralized entities. Despite this, many Bitcoin users today store or transact through centralized entities.

Quote from: Floxynice on May 20, 2024, 03:11:03 PM

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

It not difficult to achieve mate, all you have to do is stay away from any centralized body. It's your choice and there's no price to pay. Not everyone will move to centralization as Bitcoin is meant to be decentralized.

Floxynice

member

Activity: 47

Merit: 12

Pardon me if I am digressing, I am still in the learning process.
I have been reading about Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized. Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

Topic: Why use decentralized bitcoin in a centralized way? - page 4. (Read 586 times)