Sometimes a centralized authority is a good thing...
Everyone loves the idea of being their own bank, in complete control over their own money, but it certainly has its risks as well.
One of the main selling points of bitcoin and crypto is the idea that you, and you alone, are responsible for your own money.
You don't have to ask permission to send your money wherever you want.
However, there is also a major downside to this that rarely gets talked about...
And that is the idea of protecting people from themselves.
Yes, many out there think that people should never be "protected from themselves", but there are also many out there who are mostly incapably of protecting themselves from... themselves.
(whoa that was a confusing sentence)
But anyways, if you haven't been living under a rock this past week you likely heard about the Twitter Hack.
If not, more about it can be seen here here:
@jrcornel/does-anyone-else-feel-like-there-is-more-to-this-twitter-hacking-story
@jrcornel/our-good-friend-peter-schiff-really-doesn-t-understand-bitcoin
Basically the hackers took control over very high profile and celebrity accounts and pulled the traditional bitcoin scheme where they ask people to send them bitcoin with the 'promise' of sending them more back in return.
(Source: https://www.newsbreak.com/news/1603171281388/us-taxman-signs-on-to-use-coinbase-analytics)
This is where things got interesting...
You see, hundreds of people actually ended up sending these hackers money (bitcoin) to the tune of roughly $130k worth of BTC.
That's not a big haul for the high profile hack, but apparently it could have been a lot more had one central authority not stepped in.
Coinbase reported that they blocked roughly 1,100 accounts from sending roughly $280k worth of BTC.
Which would have inflated the total to more than $400k in ill-gotten gains.
Unfortunately Coinbase wasn't able to blacklist all the hacker wallets in time as 14 customers did send a total of $3k worth of BTC to the addresses.
However, as you can see, Coinbase did prevent the haul from being much much worse than it was.
So, the next time someone tells you how important it is for everyone to be in control over their own money and be their own bank, simply remind them that some people simply can't be protected from themselves, which is going to be an issue for mass adoption with current crypto iterations.
Eventually there will probably be 3rd parties that can provide insurance for transactions and holdings at least to some degree to better protect people because as we just learned, some people are incapable of protecting themselves.
Stay informed my friends.
Image Source:
-Doc