I don't see how a "cryptocurrency based society" would actually work, but key management is not really the issue? You can give a copy of your key to a "bank" to hold (or even let them generate and keep it for you), use shamir's secret sharing schemes to split it for redundancy, etc. In a society where cryptocurrency was of any actual relevance, services and tools would be widely available to assist, just like you need to interface with and learn about banks today. Plenty of people in the world are still unbanked and even from those that are I would assume plenty "prefer to store cash in their mattresses".

Involving a third party in key management like a bank is entirely antithetical to the principles espoused in the white paper. Trustlessness is all or noting, and once you trust someone you are just doing what we do now but far less efficiently.

You’re talking about Satoshi’s whitepaper? Because it talks about escrow services, etc. What principles are you talking about?

Bitcoin's trustlessness is not affected by people choosing to store their keys with a centralized entity; although the same can't be said about PoS coins. It's all about giving people the option to choose their preferred method of interacting with it, each with its own pros and cons.

> Trustlessness is all or noting, and once you trust someone you are just doing what we do now but far less efficiently.

Not true at all, as the GP explicitly mentions Shamir's secret sharing:

> Shamir's secret sharing (SSS) is an efficient secret sharing algorithm for distributing private information (the "secret") among a group so that the secret cannot be revealed unless a quorum of the group acts together to pool their knowledge. To achieve this, the secret is mathematically divided into parts (the "shares") from which the secret can be reassembled only when a sufficient number of shares are combined.

* https://en.wikipedia.org/wiki/Shamir%27s_secret_sharing

So you can trust various persons / entities such that m out of n need to come together before the secret is revealed. And each person doesn't need to have just one share out of n: if you trust one person more that you can give them two (or more) shares out of the n.

> give a copy of your key to a "bank" to hold

The irony, lol.

social recovery wallets mitigate this

look at argent.xyz

Nothing stops you from having a custodian with crypto; you’re merely allowed not to — and instead directly execute digital transactions.

If you don’t want to manage a wallet, just use Coinbase.

There are plenty of solutions, “account abstraction” with social recover is making big waves this week in some crypto ecosystems

This guy is using one solution from nearly 10 years ago, and it has some user experience issues

all the UX improvements are developed in bear markets, and they onboard the next million users that help result in the next bull market

> This is one of those scary things with a cryptocurrency based society that I worry about.

No, not really. It is the same kind of story as people putting all their money in a bag in a chimney to find out their family decided to finally lighten the mood by making a fire in long unused fireplace. It is an actual story about my neighbour when I was a kid.

People have been doing stupid things with money for thousands of years.

You can store crypto safely. It is essentially the same problem as storing encrypted backups. It has been solved.

As much as I hate cryptocurrency, I would actually be more at peace having lots of crypto than lots of stock on my account (if not for the fact that crypto is just a scam).

In happy magic future society, the community may decide to mint 232 billion ghost satoshis as a tribute, and they would accrue value out of sentimentality or whatever.

Something to keep in mind when talking to people about these ideas, they’re usually paired with some “apes together strong” kind of magnanimous idealism, where the community/market would come up with solutions.

How is this different than cash though? You need to be responsible with it or you'll lose it. No different than if he kept $232M in cash, buried it somewhere and forgot where.

When we don't want to be responsible with cash, we give it to a bank. Same with BTC.

Nobody sane and honest would keep $232M in cash, however.

Hmm

https://www.cnbc.com/2021/01/27/apple-q1-cash-hoard-heres-ho...

Its not held as actual cash https://www.investopedia.com/ask/answers/06/companycash.asp

http://www.ahead-education.eu/why-apple-sits-on-so-much-cash...

Nor should they. That's an insecure, single point of failure to have all your cash stolen. Same with storing $232M in BTC on a single HDD. Of course, at the time it wasn't worth anything near that and he wasn't concerned. The point is, BTC should be treated as cash. If you can't handle it yourself, you give it to someone else to secure for you.

Centralized solutions are often better in every single way save for them being the easiest to misuse and abuse.

* * *

It’s like we have made laws/rules in society to prevent/solve a litany of edge cases when it comes to money. It has problems for sure, but crypto would just hard reset all that without even thinking about the consequences.