Since this Coldcard tumultuous period, I was thinking about options about how one might mitigate said scenario's
My first thought was a Bitcoin bank that had two core promises...
1- All funds in my bank's custody will be fully insured without exception
2- All funds are available to withdraw 24/7 without question
So firstly, in order for me to operate said bank, I need to pay the insurers, they'll want to assess my opsec set up obviously and I'll have to charge my customers an annual fee in order to facilitate the cost of my overheads
Firstly what annual percentage would a customer be willing to pay? 1% probably wouldn't cover my expenses and 20% would wipe out customer deposits in 5 yrs, so that would need to be determined, somewhere in the middle but lower end
The main problem I realised is, if my vault was somehow hacked, and large swathes of my customer's sats were flowing out the door, I'd have no option but to halt withdrawals, thereby reneging on one of the founding principles of the business
One thing to note is, the main reason this entire self custody solution industry is even there, is because key management is key lol
@justin_shocknet bangs on about this all the time and just gets downzapped
But if you think about it, once Bitcoin is cryptographically mined into existence, it has to to put somewhere 🤔 and that is with a public private keypair, and that key is what seems to be the weak point
After reflection on the Bitcoin bank idea, I thought, what about personal Bitcoin insurance, where you keep your stack in your self custody but if what happened yesterday happens you're still insured, but then even that reflection leads me to.... yep, you need to doxx yourself in order to take out the policy
These problems are just like any other issues with Bitcoin, Satoshi solving the Byzantine generals problem, what is the correct blocksize, is the lightning network scalable....
Whenever you face these problems head on, they splinter into 10 smaller problems, and they into another 10 until you find yourself realising there is no solution
Maybe we just have to work with what we have already got, so we've gone full circle
Postscript: it's important to remember insurance is not solving a problem, it's transferring the problem. Important distinction
No offense, this is the opposite of what I want.
No banks. No custody. No 3rd parties. No insurance. No fees.
Self-custody also means being responsible for yourself. That's what growing up and becoming an adult is: becoming responsible for yourself.
If you're looking for the truth look for the guy everyone is mad at 😂
I think that's right to a degree, there's so many "solutions" that are non-solutions because acknowledging real constraints has poor economics.
Just as it's happened with people refusing to accept the reality of Lightning, we see it with custody already with pushes for Vaults even before Coldgate
(Vaults would have not helped Coldcard users who would have just had their vault recovery key pwned)
Crypto-theater raises money, NGO's fund dog shit to set the precedent of changing Bitcoin. Every one with a platform has a pet OP_Code and the average user doesn't know any better.
ColdCard was up in your face because everyone was either virtue signaling or on the payroll. How would the average user know any better?
Payrolls and virtue signals are why we can't have nice, practical, actual working things. It's an incentive problem in Bitcoin generally, there's no money in a money you don't need a business to use.
Was riffing with @Scoresby and @optimism yesterday on some ideas that apply my framework of Bitcoin itself doesn't need anything new, the problems are as old as cryptography in computing itself. What it does need is hard work on the shell the nobody will pay for.
#1537350
Nice to know that Liana is going at least somewhat in this direction... And we used to have something FANTASTIC a long time ago before Blockstreams checkbook entered the chat... GreenAddress
I'm not well-resourced enough to take on that riff project myself on top of the Lightning stuff which I believe will be the ultimate gateway drug to self-custody. I'd contribute but ain't going it alone.
Unless a working group comes together I may pare it down to something GreenAddress-esque built into ShockWallet, because the state of things is a disaster and we look like idiots because of NGO's and influencers.
https://m.stacker.news/150510