Crypto Wallets/Custody needs to change for Crypto to Evolve

Hello SPIers, Today we look into crypto wallets and how they are one of the biggest things that are holding crypto as an asset class back today. We have all heard the saying, "not your keys, not your coins" and this is true to a certain degree. Holding your own private keys is the only way to ensure your money is yours but it is one of the riskiest ways to lose your crypto as well and this is a huge problem. As a silverstacker, i get it, you dont hold it you don't own it but silver its physical and crypto is digital. Crypto can not truly move forward and become accepted and used within our global economy until this problem is fixed. People are not technical, they don't store private keys correctly, they don't create backups, they don't encrypt files and they are very forgetful.

Here is a list of ways you can lose your Crypto

• Your PC/device crashes
• You save your files to a cloud service
• Your device gets hacked
• You copy/paste your keys wrong
• You don't encrypt files
• You don't use 2-factor Authentication
• Your get phished and ether downloads dodgy wallet software or have login details stolen from you.
• You download Malware

Your crypto is no safer on an exchange, even a trusted exchange because...

• They freeze your account because of "suspicious activity".
• They freeze your account because you weren't able to "confirm your identity".
• They freeze your account because you weren't able to provide "proof of the origin of funds".
• They freeze your account because the government forced them to.
• They disable withdrawals because of "technical reasons".
• They disable withdrawals because they become insolvent due to fractional reserve shenanigans.
• They run away with all of your money (exit scam).
• The exchange gets hacked.
• Your account gets hacked

I lost BTC with mtGox and 10 years on I still get emails written in Japanese saying that I'll get my BTC back soon, a fraction of it anyway. You might be thinking, so where it is safe to hold your crypto? To be honest, not really anywhere. I mean if you drop dead today, would anyone in your circle know what you have and how to get access to it? That would be HIVE accounts, MetaMask-like extensions, offline wallets and you may have cold storage like a Nano Ledger. Your beneficiary might know your HIVE private keys but do they know you have a $1000 worth of Splinterlands cards a rare HIVE PUNK worth 1000 HIVE, staked LEO and a HE wallet loaded with SPI and EDS. I would guess you reading this right now are thinking, "hmm, It would be a good idea to create a master backup for all my private keys and seed words". That's a great plan but creating a backup is easy, it's maintaining it is the hard part. In 2-3 years from now, what you hold will be much different than today and you might have 70% backed up but you'd be missing all the new things you've invested into over the 2-3 years from creating the backup.

(It is a lot of work remembering but when you work full time at roughly 2000 hours per year, whats 1 hour every 6 months to protect what you have built?)

Getting back to not your keys, not your crypto. I said this was mostly true but there are expectations and SPI is one of them. I, SSUK operate this account and wallet but I don't own it. SPI tokens are a representation of your ownership of each and all of SPIs holdings. If SPI holds 1 BTC and you hold 10% of circulating SPI tokens, you own 0.1 BTC through SPI. I don't own it, you own with your SPI tokens. I own what my SPIs represent the same as you. Not your keys, not your crypto, I get it but at the same time is the money you have in the bank yours? are stocks you own yours? does your home sit on land you own? like really own and not a 100-year leasehold. People, the general public seem to feel very safe with not really owning anything they work their lives to get.

I understand most crypto heads will never give up their private keys to be managed by someone but most people are not crypto heads and they want it all done for them with no effort required and when something goes wrong, they can point a finger. Decentralization is a great idea on paper but for crypto to go mainstream, it has to come from a centralized source that can be regulated and held accountable when things go wrong. This does not mean a centralized team can not create a decentralized platform.

Looking into traditional investing, if I lose my login details to my bank, I click on "I forgot my password". If I can't remember anything, you can phone them. It is very hard to lose access to a bank account or investment platform if you have KYC'd which they all require and have a valid photo ID. You might be thinking, KYC is anti-crypto and you could be right. What I know is in the UK, deposits are protected up to £85k per account by the government on all banks and investment houses. If I need to KYC to get that protection, then I will KYC over using a dodgy unregulated platform with no protection (as will the average person on the street). If I were to die, my wife will receive some paper form as my beneficiary that she can use to claim my bank accounts, pensions and investments through investment brokers. She would get everything I'm not hiding with very little effort. I say hiding, I just mean secret nest egg only I know about, I mean I've not told her about it yet and will someday but not plans to do so for at least 2 more decades, I gotta know I can trust her first, ya know?? only been together for 11 years and married for 8, so it's still a little soon. hahaha (jokes). Men will understand this, women not so much unless you are a sugar mama.

With crypto, we see from the lists above, it's easy to lose crypto and once it's gone, it's gone forever and it's worse than losing money. If you lost access to 1000 BTC when they were $1 each, losing $1000 is not nice but it'll not wreck your life either. What will wreck your life is working a pleb job you don't like day in, day out for $30k a year and watching the price of BTC hit $20k, $40k, and $60k each thinking you should be a multi-millionaire and then having to go home to eat some crap from Walmart you got on special offer and finish your evening off with a few beers infront of America's got talent and a quick pornhub crywank before sleep. Losing fiat money is ok the long term, its spending power only decreases. Losing $1000 10 years ago is like losing $500 today so there is no long-term pain. You don't wanna lose access to your crypto and then have to watch it go to the moon. The same pain could be transferred to your loved ones if they know you had a bunch and they can't get to it. So many billions and maybe trillions of dollars could be lost from people simply dieing, its so sad but on the plus, its delutes the actual circulating supply so kinda thumbs up.

What is the solution?

Sheet, I have no idea. I see lots of projects within the crypto space that are tackling this problem and none of them offers an all-in solution. In my mind, I see crypto banks in the future. They would not be banks and more like places to store your assets, save, invest, borrow, all that stuff that banks today do.

These would not work like traditional banks, they could work like (stay with me here cause this is not pre-thought-out, it's all off the top). What if crypto banks were like web browsers? You download and install the "crypto bank" web3 browser that after set up requires a password and 2-factor pass to open the browser, the same way you currently log into your online banking or investment house today. Once you are in the browser, you can do all your crypto activities with the browser having some super tracking software like debank on cocaine that can display all, ALL! your crypto holding in 1 place. You would have extensions like HIVE Keychain, MetaMask, etc for all your defi stuff and all your login details to exchanges, cefi, etc are encrypted and saved within that browser. If your browser were to come with a set of seed words that let you recover it on a different device and the seed words were held by the browser operator in some unhackable offline storage, it would be fairly hard to lose any of your cryptos even in death assuming crypto is regulated and this browser bank is set up legitly in the eyes on the law. Your passport and boi details should grant you access at a basic level if you are alive and a death certificate from a beneficiary if you are not. It would not be a bank in the traditional sense but your own personal bank.

I understand that would all be online but it needs to be connected to interact and for crypto to go mainstream, we need a wallet that can be online. Even if it were offline when the browser is closed and online when open, it's still getting connected and once malware enters, online/offline does not matter but this is the risk we already run for everything in traditional investing. We can already be hacked, scammed are phished.

Why earn 2% with a traditional bank where you have no idea how your money is invested to pay and make the top 1% of wanking staff multi millionaires? why accept to pay fees to transfer funds when they are just swapping numbers on a screen? why let a credit score number determine if you can buy a home are not? why pay a $40 fee cause you went $4 over credit? why pay $10 to get an old statement? It's all ridiculous

If ethical people can create it, p2p saving/lending creates interest rates for savers and borrowers. We need a credit score number today because we live in a world of under-collateralized debt, this is why we only put $50k down to borrow $200k to buy a $250k house. There is more debt than money, the money needed to pay off the debt has to still be created and it's created by new debt. The higher your score number the more you can borrow and for cheaper as well. If crypto were to offer only over-collateralized loans, there would be no need for a crypto credit score. If you can only borrow 50% of your BTC/ETH/crypto value and 90% of a stable token value and there were proceeders in place to liquidate if your crypto falls or you don't make repayments, then it would be impossible to be in debt and there would no need for a credit score.

If you are always broke now, you should not be borrowing, you should be saving and if you've got some money that you've saved up, your probably disaplined enough to make repayments. That might sound harsh not but like with traditional investing, most people don't do it and spent all their pay each week/month and then some extra on the credit card or overdrafts. People that invest and save now are going to be the same people.

I think the world would be a better place if there was no debt and wealth was distributed instead of created. Crypto offers a gateway between fiat and digital gold, debt and freedom from debt where each and every transaction for anyone to see is stored online and can be viewed with a simple URL. No more banks laundering money, no more dodging tax for the rich, no more back-of-hand payoffs from companies to politicians to pass laws for profit, no more a lot of bad shit that in general fucks over the average pleb like me and you on a daily basis.

SO... we need crypto wallets that can safeguard us against ourselves. Once we have these wallets that are held by a regulated company with government guarantees on deposited funds and we can bundle everything together into 1 place using web3 tools, crypto will go mainstream in a big way.

Ok so I sorta went a little off-topic a few times but you get what I am trying to say here? It's all relavent. There is a big problem with crypto wallets and people losing access to their funds be that through their own fault or getting hacked are something. A google search states that 25% of mined BTC are sitting in missing/lost wallets. 70% are from early adopters and miners. That's a huge number, even within HIVE, how many millions of HIVE are sat in accounts of folks that lost access to their accounts are have died? It's grim to think about but even SPinvest could have dead investors, receiving HIVE each week in dividends, adding to the missing HIVE problem. I could outlive most of you I guess 🤔 We have at least 1 hacked investor, blacklisted from dividends of course so not getting HIVE from us. Im going off-topic again.

Let me know what you think about crypto wallets. What do you think about the way we store our cryptos today, storing our own private keys or creating safeguards against ourselves?

Thank you for taking the time to read through the post, was only supposed to be a quick 500-word post but once I get started on the browser bank, it was game over, never knew I reached 2000 words, 2300 after the edit, lol. Feedback is welcome as always. Have a great day.