The intense emphasis on personal security and cold storage hurts mass adoption of BTC

Listen, I use cold storage. There is no question that in a world of digital hacking and regulatory uncertainty, cold storage is the safest option. I would never dispute that. HOWEVER...

Most people are interested in Bitcoin as a store of value similar to gold. The gold analogy is one that will resonate with boomers as a hedge against inflation. Now, when your ordinary 50 or 60-something Main Street neighborhood baby boomer wants to buy gold, guess what? They’re not (at least not most of them) buying physical gold bullion and storing it in a safe in their basement. Would a basement safe be the most guaranteed and secure option? Quite possibly — for many of the same reasons cold storage is safer for BTC. But the reality is that most investors who own gold in their portfolio have purchased shares in an ETF through a brokerage — meaning: they do not physically possess any gold at all. In fact, all they own is a paper certificate indicating that they have the right to the market value of the underlying gold. They cannot pull the physical gold out of the ETF. And ya know what? For most ordinary investors, that’s perfectly OK for them.

What I’m getting at here is that the BTC (and crypto community, generally) consists of people who a.) were motivated and mostly ahead of the curve; and b.) have some level of technical savvy. We’ll call this crowd “the Originalists.” For the Originalists, cold storage makes total sense. The technical barrier to entry to top level security is not too high and is a no-brainer. But for the ordinary Main Street investor? (Particularly the older crowd who may not be in the market as long?) The Robinhood and PayPals of the world are a perfectly fine solution. For these people, it’s an understandable and accessible point of entry. And for that reason, maybe we (as a community) should rethink the level of intensity with which we criticize these platforms. Maybe, for some people, they’re perfectly sufficient and their use should be encouraged.

Does that mean we stop educating about the benefits and security of cold storage? Absolutely not. But it may mean we should ratchet down the all-or-nothing approach to personal security. The intentions are good, but the overall tone could be scaring off enough would-be investors to be counterproductive to the goal of mass adoption. Just something to consider. At the end of the day, not every gold investor wants or needs physical bullion in their basement, and the same is true of Bitcoin and cryptocurrencies.

EDIT: YES I KNOW cold storage is the best and safest option. YES I KNOW not your keys, not your Bitcoin. I understand AND AGREE with those things! This is not a yes/no, black/white, binary argument. Good lord.

Submitted November 22, 2020 at 08:08PM by ActionShackamaxon https://ift.tt/2IYlBck