In the long run, I think this is good for Bitcoin. It's supposed to be a decentralized currency. Centralizing Bitcoin in an exchange makes the exchange a big target. This disincentivizes centralization and limits how much centralization can actually happen when people are foolish enough to try.
For individuals who lose Bitcoin because of exchanges getting hacked, it's because they leave Bitcoin in the exchange. This is antithetical to how Bitcoin is intended to be used. The answer is, don't do that. Make cold storage paper wallets and keep your Bitcoin there.
> this is good for Bitcoin ... The answer is, don't do that ... Make cold storage paper wallets and keep your Bitcoin there.
Only in bitcoin land is theft considered good for the ecosystem.
Only in bitcoin land does it make sense to blame laypeople for storing their money with financial institutions.
Only in bitcoin land is it a best practice to secure your money using a password written on a piece of paper.
Only in bitcoin land is it reasonable to expect consumers to do a better job of keeping their money secure than corporations with on staff security experts.
> Only in bitcoin land does it make sense to blame laypeople for storing their money with financial institutions.
Uh, yeah. That's the entire point of Bitcoin.
> Only in bitcoin land is it a best practice to secure your money using a password written on a piece of paper.
God no, at least not a password intended for human consumption. That's not what a cold wallet should be. It should be a key.
> Only in bitcoin land is it reasonable to expect consumers to do a better job of keeping their money secure than corporations with on staff security experts.
No, non-expert consumers should be using off-the-shelf security solutions made by a staff of security experts that they can use locally (i.e. physical Bitcoin wallets). It's just that not many people are working on that stuff, because most of the companies making Bitcoin stuff are catering to speculators trying to get rich quick.
There are a lot of really smart people working on creating centralized Bitcoin solutions, but frankly, that's just a bad idea, as evidenced by almost every centralized Bitcoin solution having been hacked at least once. A centralized system has too wide an attack surface and too high an incentive for attackers, and defeats most of the benefits of Bitcoin anyway.
Sure, it makes Bitcoin a poor choice for speculators looking to get rich quick, but I don't care in the least. They're outsiders who don't understand the tool and aren't on board with the philosophy of why Bitcoin is important.
If you don't understand decentralization and you try to be in Bitcoin, you're going to have a bad time.
The entire point of bitcoin is to avoid financial institutions? That sounds like a pretty big disadvantage compared to other forms of money that work well with financial institutions.
> That's not what a cold wallet should be. It should be a key.
A distinction without a difference as far as it relates to having all your money stolen.
> Sure, it makes Bitcoin a poor choice for speculators looking to get rich quick
It makes bitcoin a poor choice for the general population since most people fall into the category of "outsiders who don't understand the tool and aren't on board with the philosophy of why Bitcoin is important"