Why Paypal Custodying and Siloing Crypto is Bad
I can't believe how many people Paypal has fooled.

Why Paypal Custodying and Siloing Crypto is Bad

By AlucardLife | cryptoinvesting | 22 Nov 2020


Most people got my point, but I had a lot of commenters completely misunderstand my previous post

Paypal Users Buy 70% of New Bitcoin This Week; Stupid Shills Celebrate

I'll stop short of calling them shortsighted and simply assume they just haven't thought too far out ahead. It's forgivable, I suppose, this once. I don't see why I would have to lay out an argument about WHY Paypal custodying and siloing other people's bitcoin is bad...for YOU...I thought Satoshi already did that...but I will give it another shot. 

One commenter went so far as to tell me,

"Don't tell people what to do."

I'm sorry; didn't you just tell me what to do? Don't be hypocritical.

Government tells you what to do all the time, so I hope you have that same baretooth aggression for them. The only difference between the government's strong suggestions and my own is that government will eventually take your life if you ignore their suggestions long enough. So while you're bowing down to them and trying to bully me, just remember that their suggestions forcefully take away value from your life. I'm trying to provide value.

*Don't tell people what to do.* It's my blog, asshat. What the hell am I supposed to do in my own blog?

The Threat of Oppressive Centralization

Insofar as we know, bitcoin cannot be technically defeated. Its defenses are strong enough to withstand quantum computing attacks. From that standpoint, centralization of bitcoin is not a threat.

There is a threat, however, of bitcoin becoming centralized through siloed custody of regulated entities. All three of those things must be true — the silo, the custody, and the regulation. Somehow Paypal convinced you morons to bend over for all three just for FOMO. I won't even go into the irony that most of these idiots FOMOing in will be in the red in 3 months hating themselves, then not even being able to withdraw the deteriorated bitcoin from their siloed Paypal account.

Sounds no better than OKex halting withdrawals, actually. Actually, sounds WORSE!

Anyway.

Paypal et al. siloes and custodies bitcoin, which basically gives the US government the right to do whatever it wants with that bitcoin — declare it a threat to national security and confiscate it, force its transfer into CBDCs at discounted prices, over-regulate what it can be spent on — the possibilities are endless. If I were a regulator, I'd be salivating at the amount of pain I could cause. I'd masturbate myself to sleep at night dreaming of the ways I'd bend and stretch legal terminology to fuck over as many people as possible.

But here's the part your selfish ass should be worried about. If the majority of value in bitcoin is custodied and siloed, the regulatory effects eventually reach you, you selfish idiot. You get fucked even if you're smart enough to buy your crypto outside of Paypal.

"Why should I care what other people do?"

Dumbass.

Government might easily whitelist a centralized, siloed address and disallow bitcoin purchases within the country from any other. Unless you want to get all of your goods and services from Venezuela or move to Fiji, that affects you. (By the way, they're using COVID to track down on travel, so that move will be much more difficult if you want to make it.)

If the government doesn't fuck you, Paypal can. Using bitcoin as collateral, they can create Fractional Reserve Banking 2.0, possibly partner with exchanges and manipulate the price of bitcoin. And you still think when your shit gets liquidated on Cream that it was just a random flash crash. XD XD XD

Matter of fact, what's to keep Paypal from joining Keep3r, setting up jobs to liquidate defi accounts, then use their siloed crypto to force those liquidations? They basically have the power of a flash loan at all times. Individual hackers have laid waste to defi over the past few weeks, and they have to return their loans in one transaction. Imagine a corporate hacker with employees to man separate stations and no loan to pay back. 

Did I just discover the DDoS flash loan attack?

Imagine if Goldman Sachs figures this out. Instead of directing their rows and rows of bots and traders on Tesla, which has the volume to absorb high frequency trading, they turn it on your favorite protocol. And they have the ability to do this any time they want. No more yield farms, no more lend/borrow access, no more defi. It's over.

And they do this all using your neighbor's bitcoin. Because you were smart enough to stay away from Paypal, but he wasn't. It doesn't pay to be a selfish, shortsighted person. Ever.

What Is vs. What May Be

You may think that I'm putting together some doomsday scenario. I admit to a few superlatives, and it is quite possible the situation I laid out may not occur in your lifetime. It is also entirely possible. I need folks to put on their abstract thinking caps for a second. The purpose of bitcoin, in my mind, is to prohibit even the possibility of government or centralized private oligarchs from taking personal financial sovereignty again. Getting rid of this fear releases the collective human spirit into a new epoch. Imagine what humanity could do if the MAJORITY of people were released from the day to day struggle of chasing money.

Looking back at Orwell's 1984, the actual 1984 wasn't as bad as he described. 2020 was getting closer, though, not further away. What does that mean? Don't get it fucked up; we're still headed to an Orwellian (Paypalian. ha!) future if the public remains apathetic. The delays only mean that the good folks who think like me have been WINNING SOME BATTLES. And I come from that cloth, not from the apathetic, selfish strand of humanity that can't look beyond its own laptop to help his fellow man understand the REAL POWER of crypto.

If a few noobs look at bitcoin like a stock and just come in for the gains, fine. But that attitude can become prevalent if powerful companies like Paypal are allowed to spread their gospel unencumbered. They've already convinced half of the people in my comment section that their involvement is benign. Well that's why they have Paypal and you don't, you selfish clod — because they think far, far ahead and you don't.

All in all, I don't care about convincing you. Believe what you want; we'll see who's right in a decade or so. I just can't believe you people would trust your financial sovereignty to an overbearing oligarchical cabal AGAIN. AGAIN! I can't believe you can't see how that selfish thinking of "it's not myyyyyyy bitcoin, so why should I care if that other person learns about sovereignty?" won't directly impact your life.

I just hope my bitcoin is long enough to put some major distance between me and the selfish, cynical people who don't want to take any responsibility for their own financial independence or their fellow man. I hope it brings me closer to the people who want to be involved in the next phase of humanity — time travel, Unification Theory, fuckin warp drive, man. That's what the fuck I write for.


AlucardLife
AlucardLife

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