Re:Avg. Transaction Fee of Bitcoin Surpassed the Peak from 2017
by rawtxapp on Thursday April 22, 2021 @07:31PM
(#26909390)
It's the short term option, yes. Well, they have to hold on to the coins, because once they lose it, they can't turn to Fed for a bailout. Lots of custodians have insurance in place [1].
In the long term, lightning is here and works, as exchanges keep integrating it, that's where most of the end-user funds for small amounts would live.
1: https://finance.yahoo.com/finance/news/bitgo-expands-cold-st...
So people are using Bitcoin through trusted (in the security sense[1]) intermediaries. These intermediaries are basically banks, no? Aren't they subject to all the same bad incentives as a "traditional" bank? Except their deposit are (probably?) not insured against loss.
[1] https://en.wikipedia.org/wiki/Trusted_third_party
> 'Trusted' means that a system needs to be trusted to act in your interests, but it has the option (either at will or involuntarily) to act against your interests.