Crypto solves this. Well, eventually, after initially making it worse, because all your crypto-adjacent transactions in the meantime make legacy banks extra-hair-trigger suspicious.
My local credit union has gone from anti crypto to fully support; I was one of a dozen or so people who were able to provide legitimate datapoints to support bitcoin usages that weren't illegal.
So glad I was able to just walk in to the local HQ and have a sit-down with the person who ultimately authorized crypto exchange transactions. YMMV
This seems somewhat contentious, but having some assets outside of the banks is a pretty reasonable derisking mechanism. Bitcoin, and some stablecoins seem like a wise choice.
Not really. It just replaces this problem with a different but equally difficult problem: managing your crypto keys, which is a skill in and of itself. And if you hire someone to do it for you now you are right back where you started, trusting a third party.
The right answer IMHO is to do business with a bank that is small enough that you have a contact there whom you personally know and will pick up the phone when you call.
> managing your crypto keys, which is a skill in and of itself.
Um, depending on how complicated/paranoid you want to get?
Install the Phoenix wallet app and you've got your keys and Lightning node ready to go, pending added liquidity. Sure, it's not maximally secure, but a person can perform transactions outside the banking system pretty easily this way. No need to so consciously "manage" anything.
Phone not secure enough? Fine – then get a hardware wallet like Ledger.
But maybe I'm misunderstanding your point?
> And if you hire someone to do it for you now you are right back where you started, trusting a third party.
If, by hiring someone, you mean using a custodian like Kraken, then you're still solving a problem by not dealing with the traditional banking system. Sure, you're back to trusting a third party, but that's really not the issue at hand, but avoiding Big Bank.
> The right answer IMHO is to do business with a bank that is small enough that you have a contact there whom you personally know and will pick up the phone when you call.
Seems like a nice idea, yet very optimistic. Is everyone supposed to have a personal contact from within a small bank? Probably works for some people, but involves luck and wouldn't scale. The issue isn't really being solved this way.
The closest compromise might be to work with credit unions instead of banks.
It's not, Phoenix is a non-custodial wallet. They provide one shortly-custodial service to on-board on the Lightning Network (to provide a seamless experience, but you can do the process manually with your own node if you prefer). Once the channel on LN is open, it is non-custodial and trustless.
For Hardware Wallets, plenty of other providers exist, exempt of data breaches and dodgy services unlike Ledger. For Bitcoin Coldcard comes to mind.
For the risk of physically losing your keys, seems like a less random, more in your control, risk than trusting Chase Bank, see OP.
> trusting a crypto custodian
If that's your choice, at least you have the option to avoid this with crypto... that's one thing I will never get with people who systematically bash Bitcoin, nobody forces you to use it, it provides you optionality and full control of your assets, something traditional bank and fiat do not offer at all, you are forced by the state to pay your taxes with the currency they tell you, you are practically forced to use banking as a cash only life is pretty complicated these days... so why hate on a new option.
What difference does that make? You're still trusting them not to have put in a backdoor, and to have sufficient security in their development process that an attacker cannot insert a backdoor.
Also, what happens to your keys if your smartphone fails? Is there a backup? Is that self-hosted too? Is it adequately encrypted?
Unless you do everything yourself (which ultimately means running your own foundry) you cannot escape having to trust someone. It might as well be your banker.
> full control of your assets
Until your keys are lost or compromised. Then you are irredeemably screwed.
Controlling your keys (yes this implies a backup, all wallets guide/help you to do it these days), having access to the source code of your wallet, and being able to verify the data of Bitcoin's public and open blockchain is obviously much better than blindly trusting your bank and getting cut off from your assets at any point through NO fault of your own.
> Until your keys are lost or compromised. Then you are irredeemably screwed.
Yes, you have discovered the big secret everyone in crypto is "hiding"... when they say self-custody they very sneakily imply you, yourself, have custody and responsibility of your assets. If this NEW digital option is not for you, don't use it, go trust custodians. Before Bitcoin you had no such choice.
In the case of banks you are also pretty screwed... just slightly less iredeemably in some cases... in the worste cases you might need to find a lawyer willing to help you, depending the amount it might just not be worth your time or the time of lawyers/judge. Unless the bank decides to hear reason magically or gets tired of your nagging like in OP's case... seem like a lot of trust and no control at all, at any point.
> having access to the source code of your wallet, and being able to verify the data of Bitcoin's public and open blockchain is obviously much better than blindly trusting your bank and getting cut off from your assets at any point through NO fault of your own.
Maybe for you. Not for everyone. The vast majority of people don't have the technical chops to audit a code base. They have to trust someone else to do it for them.
> slightly less iredeemably in some cases
But that's significant. And if you learn how to work the human system, you can improve your odds much more than "slightly". That's a skill that many people have a much easier time picking up than coding or public-key crypto.
Hence why everything tends to be public and open source for Bitcoin, so anyone who is conscientious and capable *can* do this.
Trustlessness is a scale, not a binary. It just so happens that in traditional banking you start at the very bottom of the scale and you pretty much stay there. With Bitcoin you get about as high as you can get on this scale for a form of money.
> That's a skill that many people have a much easier time picking up than coding or public-key crypto.
As much as they learn about the meanders of the traditional banking system, it still won't make them more in control of their assets, the more custodians and regulators you add between you and your assets, the less in control you are of them. And we aren't even talking about another form of control you lack with fiat currencies, their almost constant expanding supply.
> anyone who is conscientious and capable can do this
Anyone who is conscientious and capable can navigate the traditional banking system too. In fact, that's pretty much what "capable" means.
> in traditional banking you start at the very bottom of the scale and you pretty much stay there
You don't have to any more than you have to with bitcoin. You can even start your own bank, and then you can keep your deposits there and you will have a 100% guarantee that your bank will not screw you. It's not easy, but neither is writing your own bitcoin client from scratch.
A very plausible route to that kind of security is joining the board of a credit union.
> As much as they learn about the meanders of the traditional banking system, it still won't make them more in control of their assets
That's not true. The more you learn about how the system works the more in control you can become. It is exactly the same in both cases. The only real difference is:
> almost constant expanding supply
That is a real difference between fiat and bitcoin (though not crypto in general). But that has nothing to do with control, and it has nothing to do with crypto, it has to do with policy. It's easy to make an inflating crypto currency. You could even fork an inflating bitcoin. You could likewise make a non-inflating fiat currency, e.g. the U.S. dollar during the Great Depression. But there is a reason this isn't done very much -- it's because a return to the Great Depression is not generally considered something to aspire to.
> Anyone who is conscientious and capable can navigate the traditional banking system too. In fact, that's pretty much what "capable" means.
This is a funny contrast, under the article above... and the thousands of similar horror stories with centralized custodians ignoring their "customer" and never being held accountable for their shortcomings.
It seems to be more than being capable when it comes to banking, it might just be that you need to be rich/powerful enough for the banks to actually care. Another difference with Bitcoin, the same access is provided to anyone. The almost 2 billions of unbanked people on this planet are not this way because banks can't reach them, but because they are seen as liabilities/risks they don't want... Bitcoin does not make such discrimination.
> You can even start your own bank, and then you can keep your deposits there and you will have a 100% guarantee that your bank will not screw you.
I do not understand how this is supposed to address my point about trustlessness on a scale. You don't describe a system as Bitcoin by holding you own deposits... it is a full system for transfers/payments/messaging. It seems like a diversion to not address the fact that the trust put in custodian is not comparable to a system based on self-custody and self-sovereignty like Bitcoin.
> But that has nothing to do with control,
It absolutely does for Bitcoin. Nobody is following the chain that changes the emission rate and supply cap. This is control by the participants of the network, and it isn't limited to miners, we have seen users and other economical actors signify this to miners when there was an attempt to fork to larger blocks. Please show me how you can make such choices with fiat, the end users have generally no direct say on the policies of their money's central bank.
The more important thing is that I don't have to be. Multi-Sig is still far less risky, complicated, and/or costly than the capriciousness or really -- let's just call it what it is -- outright criminality of fiat institutions. Some could try to explain behavior of fiat institutions as incompetence, but then we're just back at criminally stupid (courts are consistently clear that negligence is a form of criminality).
By professional crypto groups and smart users, for high dollar accounts Multi-Sig with hardware wallets from diverse vendors are used. None of them are by Ledger, because Ledger's firmware is closed source.
For Ledger specifically, I already do not trust Ledger.
