The risk calculation is very different. Cryptocurrency is protected by passwords and keys and stuff so is secure from theft without needing a bank. But cash is not, so a bank does provide value - you're more likely to be robbed than the bank go under.
And of course, in most places, banks and other institutions are protected with rules about keeping a certain amount of cash on hand and some sort of insurance mandated by the government.
I’m not sure I understand the intent of this pedantry: you’re agreeing with me.
The comment I replied to compared bitcoin to cash-in-the-bank, and my point was the same as yours: while I may have handed the bank cash, my ability to get money back isn’t tied to that specific cash, or even to any amount of cash that might be stolen from the bank at all. The money is insured, and so if the bank is robbed, my ability to withdrawal my money is unchanged.
What's your point? The nature of cryptocurrencies make them easily lost or stolen compared to money in the bank. Banks are regulated and insured so customers never risk losing their money due to ineptitude. They get nothing in exchange for the hassle and risk of cryptocurrency.
With cash if you're unlucky you typically stand to lose whatever you mailed/had on you. With cryptocurrencies if you're unlucky (someone nicks your private key) you'd be more likely to lose the entire savings.
Yes actually it is, because the analogy is your storing your fiat in your house or in your pocket, which can of course be robbed, have you even insured cash stored in your house or pocket, I highly doubt it.
Just like fiat you can store your crypto with an insured custody provider (and still own your own keys), which is the norm with smart people who have a decent amount of crypto assets.
ATMs have security measures like daily download limits, unusual locations triggering denials or ID checks, etc. which cryptocurrencies lack.
There's a really big difference between your potential losses being capped zero to a few hundred dollars vs. “everything you own and half of the community will say it was your fault”.
If someone steals from my bank account I’m getting that money back. Yes I’ve been scammed a couple times and had money withdrawn from an ATM in countries I’ve never been. Within 24 hours my money was back in my BoA checking. All my bank deposits are insured by the FDIC.
Not to mention my $dollars (or even €/£) have not lost a huge amount of value and fluctuated like a rabid dog.
Blockchain doesn’t help at all and most banks keep pretty good records.
I'm not even sure why you replied if you're not going to add anything to the conversation here. You talked about trusting your "bank" with cryptocurrency and I replied that you don't have to....your argument comparing cash to cryptocurrency is like comparing cash to property/stocks.... it was a strawman and doesn't make much sense.
The market (and you) decide to use cryptocurrency however you want, in a bank, in a wallet, or not at all. And that includes whether you think the "bank" holding your funds has enough guarantee that your funds are safe.
I don't totally understand your analogy. I have my own wallet and I can keep that secure. If someone takes that from me it's akin to being mugged, or having my house burgled. That sucks but it's a bit different from giving someone else my wallet to look after.
With these exchanges, most people don't seem to know better, and treat them as banks. They're not banks, banks are regulated and governments make sure they don't just close their doors and walk off with your money.
You have no recourse when your cash is stolen unless you’re insured against that. You have some recourse when stuff from your bank account is stolen because you’re paying the insurance in bank fees and taxes.
Those are products you’re paying for. Similar products (and much more flexible/advanced) can be built for bitcoin.
People incorrectly assume their money can't be stolen from a bank via hacking or wire fraud.
The only thing you get from having your money in a bank account is government-mandated insurance, that covers you only up to a point. I think as crypto ecosystem matures, similar services will be offered there too.
When a crypto exchange or a crypto wallet gets robbed, you have nowhere to go to get your money back.
There are good reasons why we don't keep large amounts of cash in our pockets or in our mattresses.
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