Don’t Bank on the Old System with Crypto Wallets 🏦
The best-known digital currency, Bitcoin was built for institution-free transactions offering privacy and safety features. But we ruin it all when we use digital crypto wallets; it’s the same model as traditional banking. Actually, most Bitcoin holders don’t even have their coins, but they don’t know it!
What makes Bitcoin so different from traditional banking?
- Decentralized system: Banks and governments define monetary policies, such as the money available in the market. This money is controlled by a few decision-makers. In contrast, Bitcoin regulates itself. Anyone can participate in the market; permission is not required.
- Better safety: Bitcoin is almost impossible to hack. You would have to crack the whole system. The digital coins track all previous transactions and that information is kept as the chain.
And therein lies the problem…
To own Bitcoin, you have to download the whole blockchain. At this point, every coin is about 400 GB and cumbersome to store. Most holders just use a digital online wallet, where the providers keep the coins for them.
The wallet has two keys, one public and one private. It gives the public key to the user to receive Bitcoin. Users unlock the wallet using the public key. But it’s the wallet that is actually performing the transaction with the private key, saving the whole blockchain. Yes, like a bank.
So we are back to a no-freedom transaction system, with no privacy, and no safety. The wallet provider could scam, steal, or call for BANKruptcy. The government could start regulating wallets.
If we really want to protect our crypto from thieves and regulations, we should own the whole blockchain without intermediaries banking the cryptosystem and making bank from your Bitcoin.
“Not your case, not your coins”
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