How do we make BTC the reserve currency when users are so inept? \ stacker news ~bitcoin

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How do we make BTC the reserve currency when users are so inept?

3636 sats \ 12 comments \ @0xBTC 29 Jun 2023 bitcoin

I work in tech and I am sure that many of you do as well. I envision a world where we are walking around and paying people with BTC for everything. My issue is that so many people are so moronic that I can see many people losing their keys as and/or getting scammed out of their life savings from a simple phishing scam.

How could we combat this for the people that are so dumb? Like a wallet that has a bunch of different seed phrases (like 200 to divide their wealth up into 200 separate wallets) or is there something better?

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25 sats \ 3 replies \ @0000 29 Jun 2023

Welcome to a nearly impossible problem. Engineering and accounting for human error.

My fellow Bitcoiners will lose their collective shits over this one. I don't blame you. But there will almost always be a need for some sort of non self custody solution. I recall there is a project that basically acts as a federated bank built on Bitcoin but I cannot remember what the project was called. I believe it could be used to help solve this problem.

One of my favorite examples of engineering for humans in this way has to do with how we connect to wifi points. People find managing passwords difficult and barely remember the passwords they use every day. WPS was born. WPS is a compromise in physical network security for convenience for the user.

I think we will need to consider that somewhere along the way, in order to onboard the next hundred million users we will need to figure out compromises so people don't have to worry about the challenges of self custody as much.

I also think when speaking with individual people you need to be very critical about your approach. Self custody is the most secure way to store Bitcoin but it is far from it in the hands of someone who isn't capable of storing anything securely to begin with.

There will always be a group of people that no matter what education you provide them, these concepts will fall flat every time. If Bitcoin is for everyone, then it is our duty to engineer for every edge case we are capable of as well.

To glue all this together, it will require something else that my fellow Bitcoiners will hiss at. Regulation. Else those self custody solutions will get away with all sorts of scammy stuff. Prime Trust ring any bells? I do hope we can engineer clever solutions to avoid this. I think we can figure it out.

Truth is if humans had any interest in self custody of their wealth, we wouldn't have moved away from what we had been doing in the wild west days storing gold in the ground. Over time the prospects of holding your wealth with a custodian became much easier to consider. Convenience over security.

400 sats \ 1 reply \ @anon1 29 Jun 2023

Fedimint is the project you are referring to. I am excited to see where it goes as I think it is a huge improvement to current custodial options.

10 sats \ 0 replies \ @0000 29 Jun 2023

That is the one! I always forget the name of it. It is the best solution that I can think of so far but from what I recall it can still have its own gaps in terms of security. I think the most optimal scenario would be to set up private instances for family and extended family.

0 sats \ 0 replies \ @Majjin 29 Jun 2023

I think something that this community struggles with is the reality of human nature. I think its because Bitcoin tends to attract more technical, libertarian-minded, individualistic people.

Don't get me wrong, I would prefer if everyone self-custodied their sats. But that's not going to be the case. Some people due to differences in intelligence, personality, culture, interests, skills, etc. will simply opt for custodial solutions no matter the education or arguments given to them. Humans have logic as a tool in their toolset. We are not inherently logical beings. Not to mention, Bitcoin is permissionless so anyone could set up a custodial service that people will flock to.

The key here I think is make self-custody as easy and enjoyable as possible. Maximize the number of people who own their own keys. We will probably need to make the UX almost indistinguishable from custodial UX. We should also engineer trustworthy, accountable custodial solutions as well. We can't neglect that, otherwise people with less savory intentions will do it in our stead.

I recall there is a project that basically acts as a federated bank built on Bitcoin but I cannot remember what the project was called. I believe it could be used to help solve this problem.

I believe you're thinking of Federated Chaumian e-Cash.

15 sats \ 3 replies \ @nerd2ninja 29 Jun 2023

When I was growing up, the mark of an old fart, was ineptitude in using a computer. I wouldn't say the current generation is as inept as those adults I judged as a kid, but the user interfaces they're used to working with have made them much more inept than I would have been at their age.

non-the-less, I believe we will either grow Bitcoin adoption from new generations with actual neural plasticity, or the user interfaces will dumb down enough to provide no conceivable difference.

Take Pheonix wallet and Breez wallets as examples. In the early days of the lightning network, there was all this channel balancing and opening channels to random people, but these companies made a business model out of scripting out all of that complexity to being an easy to use non-custodial wallet.

0 sats \ 2 replies \ @anon1 29 Jun 2023

Non-custodial lightning wallets work okay right now but in order for bitcoin to succeed, onchain fees will have to increase by quite a bit. If fees were to reach equivalent value today of 50 USD it will make the practicality of using a non-custodial lightning wallet pretty low for the average person.

I think the average person will use custodial lightning for their day to day transactions but keep their saving in self-custody layer 1 wallets.

11 sats \ 1 reply \ @nerd2ninja 29 Jun 2023

You have recency bias anon. I'll remind you that only 6 years ago we didn't have lightning at all and the size for every transaction was much larger. If we were posting back then, we would arguing over how Bitcoin can succeed at on-chain is the only option they have.

https://thebitcoinmanual.com/articles/open-multiple-lightning-channels/

The idea of transaction batching, even using a lightning wallet just last year was crazy to a lot of people on SN. Fees are so cheap! Why bother with such a thing! So to then suggest transaction batching, bah, humbug. Now look, Eclair, which the lightning implementation Pheonix uses, has a splicing prototype!

https://www.nobsbitcoin.com/eclair-v0-9-0/

And look at this neat improvement proposal: https://lists.linuxfoundation.org/pipermail/lightning-dev/2023-March/003886.html

Things are happening! Just keep your ear to the ground and don't expect how things are now to be how they will always be.

50 sats \ 0 replies \ @anon1 29 Jun 2023

Very true! Things will change and I hope that non-custodial lightning does become much more onchain footprint minimized.

Also other layer 2 solutions like ARK are being explored.

0 sats \ 1 reply \ @kepford 29 Jun 2023

There are many folks thinking, talking, and working on these issues.

Uncle Jim model: Someone in your family hosts a lightning node you use and for on-chain use BIP85 child phrases
Fedi: Community based open and accountable custodial bitcoin
Custodian as a service: Ala the typical custodian that holds your keys

IMO there will always be people either that can't or won't do what they should. Anyone that thinks bitcoin will magically make everyone responsible and intelligent is fooling themselves. If we ever get to a point where everyone holds their own keys it will take generations of hard lessons.

Now, BTC being the reserve currency has nothing to do with the average Joe. Does the average Joe custody their dollars now? No, then how on earth is the dollar the global reserve currency? Your premise is a bit off. The dollar is traded and held by institutions and businesses globally and used for trade and to back other currencies. That's what makes it the reserve currency. Bitcoin as it is today has the functionality to do this without an issue.

Self custody for the average person is still not perfect but it isn't incredibly hard either, personal responsibility is actually the greater problem. The average man doesn't have much, at least in the west where we are so spoiled.

1 sat \ 0 replies \ @kepford 29 Jun 2023

I would say one of the biggest issues in bitcoin adoption is the lazy tech savy person in the west. They say they are all in with bitcoin. They think they own a lot of bitcoin but they are to lazy to take it off of exchanges or self-custody their coins. But again, this is a culture problem. We have so many lazy people and the rug pulls will not stop until people learn their lesson. So, if this sounds like you take this as friendly advice. It is time to grow up, open your eyes, and take ownership of your life and future.

0 sats \ 1 reply \ @nullama 29 Jun 2023

The reality is that we will need custodial Bitcoin services for some people

I wonder how it is working so far in El Salvador. I guess by this time some people might have a reasonable amount of BTC.

1 sat \ 0 replies \ @nerd2ninja 29 Jun 2023

Custodians are a fail condition.