Private keys held by banks: oxymoron or mouse trap?

Private keys held by banks: oxymoron or mouse trap?

By MikeZillo | Smart Crypto Investing | 23 Jan 2021


Facilitatation + centralization pure decentralization?

A dilemma that banks have apparently begun to address.

A phrase dear to me is “Not your keys, not your money”. If you do not have your private keys, the cryptocurrencies stored under that login data are not really yours.

You know Coinbase or Binance? Here, in their basic version they don't give you private keys. What does this mean? That if they close the shack, you will hardly see your cryptocurrencies again.

Be careful: I am not suggesting that I am aware of structural defects in these two teams, on the contrary, I think they are among the most solid on the market. The example I give is simply a consequence of enthusiasm and unlikely tags used in connection with this news, as if thanks to this type of Custodian service from banks, then cryptocurrencies are one step away from mass adoption.

In my opinion this is not the case. I made a small post about it this morning on the Business and Digital Currencies page, which I recommend you follow because soon I trust they will be able to resume live broadcasts and above all we post daily updates, market evaluations and sometimes unpopular readings of events.

In short, banks can now keep Private Keys.

In this way, if I deposit Cryptocurrencies in the bank, which in turn holds my Private Key, I don't really own my coins.

Cryptocurrencies immediately become seizable.

If the bank closes, what guarantee do I have on the cryptocurrencies?

In short, it seems to me an interesting initiative in terms of raising awareness of the market, but at an operational level I would never use it, unless I have to structure an activity that does money-raising activities also through cryptocurrencies.

In this case, however, the banks would not have the purpose of Custodian for the money but only of Collector (ie receiving recipient).

Another chapter is the so-called “Crypto-Friendly” jurisdictions. In short, in some countries they claim to be a friendly nation of cryptocurrencies, but then the banks if you operate with cryptocurrencies do not open your bank account to welcome investor capital.

In practice, on the one hand, the government does marketing and creates a legal infrastructure to regulate some activities with cryptocurrencies but then the banks do not support the business for fear of money laundering and "defense of the community" according to a local professional.

A somewhat controversial and in some ways contradictory position of the banks that leads to the creation of various red herrings.

In particular, what I am looking at, is an attempt to control in full style "if you can't beat them, partner with them or buy them".

In short, as I write extensively in my Book dedicated to Cryptocurrencies mentioned below, Crypto are used for financial independence because we shouldn't care how many dollars Bitcoin will be worth tomorrow, but the awareness of owning a scarce asset and controlled inflation.

Many greetings also from the FED.

Fed

I will create a video on this, where I will explain strategies to keep your private keys safe!
Until then, keep your eyes open and let me know which one is your favourite wallet.


MikeZillo
MikeZillo

Daily Trader, Mining Farm Project Manager, Blockchain consultant, Cryptocurrency evangelist. You can find more videos here https://www.youtube.com/channel/UCvyXx6I1C__zmLAYUXNZwQQ?


Smart Crypto Investing
Smart Crypto Investing

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