Why Bitcoin proponents staged a ‘bank run’ on cryptocurrency exchanges

Winter break may have just ended, however bitcoin The supporters had another strange tradition to do. On Tuesday, they celebrated a unique annual grassroots weekend known as Proof of Keys, which began in 2019 by bitcoin Businessman Tracey Meyer.

In an experiment almost mirroring the operation of a bank, the community is using this day to encourage other bitcoiners to withdraw their bitcoins from exchanges and other third-party services so they can take full ownership of their assets. The date was chosen specifically because it is the date of the Bitcoin “genesis block”, the first Bitcoin block ever mined, in 2009.

The philosophy of the day is simple: many people leave their bitcoins (and other cryptocurrencies) on exchanges. But by doing so, they are not in complete control of their money. Instead, they rely on the exchange.

“Not your keys, not your coins,” as it is commonly said in the industry. (Or sometimes “Not your keys, not your cheese.”)

Like the last one FTX disaster Show that third parties can’t always be trusted. FTX has lost billions of dollars in users’ cryptocurrency-And the Exchange users do not know if they will get their money back.

“Everyone should take advantage of the most important characteristic of Bitcoin, which is the ability to take care of oneself! [January] The third has become a “Bitcoin Holiday” because we collectively remember this important effort,” Coinkite CEO and co-founder Rodolfo Novak said in an email to Decode.

“Self-care has become so easy that no one has an excuse now,” he added, referring to Hardware wallets (Like his company calling card), as a secure way to store funds on your own without the need for an exchange or other third parties.

To take care of oneself or not to take care of oneself

The “bank run” is reminiscent of the Great Depression, where many anxious people lined up at their bank to withdraw their money, afraid that their bank was insolvent.

Proof of Keys wasn’t nearly as dramatic. But it’s a similar idea. While browsing Twitter, a number of users have claimed that they have withdrawn their funds from exchanges or After installing new hardware wallets to secure their coins.

Hardware startup enterprise, self-custodial startup Casa, and others hosted Twitter Spaces, offering advice on how to get started with self-care the safest way. One of the main recommendations was to store funds on a hardware wallet that is separate from the internet so that it cannot be hacked remotely.

But most of the discussion revolved around which users do not an act. Novak cautioned against storing seed phrases in the cloud. Justine Harper, vice president of Unchained Business Development, said that “user error” and “complicating things” were two of the top reasons she saw people lose money through self-care.

For example, a user might read something on Twitter about a more sophisticated self-care mechanism, but the setup would be too complex for them, as the user might mess something up and lose their money.

One such example is a reminder of the dangers of self-trust funds. That is, losing your Bitcoin keys (which essentially act as a password) means losing your Bitcoin forever. Prior to Proof of Keys’ “holiday,” veteran Bitcoin Core developer Luke Dashjr reported on Twitter He lost millions of dollars’ worth of bitcoin in the hack.

Some have argued that if longtime Bitcoin developer Dashjr cannot manage Bitcoin successfully, then the average person has no hope.

Dashjr did not fully explain how he got his bitcoins. But from what he shared, Dashjr may not have been in the best position. Maybe his money was hot Pocket wallet online. This has been discouraged by security experts across the industry.

As former Bitcoin Core contributor and moderator Jonas Schnelli set it“Over-engineering and a paranoid level of complexity can lead to vulnerabilities. KISS your keys,” the “Keep It Simple, Stupid” acronym calls out.

Demonstrates the importance of using standard global best practices for secure Bitcoin. For those who wish to participate, Decode he have High level guide Explain how to transfer money to the private storage space. In short, it has become the industry standard for funds to be stored in hardware wallets, where they are separated from the internet and cannot be hacked remotely.

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Why Bitcoin proponents staged a ‘bank run’ on crypto exchanges – Coinphony [SV]

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