Technology

59495 readers

4102 users here now

This is a most excellent place for technology news and articles.

Our Rules

Follow the lemmy.world rules.
Only tech related content.
Be excellent to each another!
Mod approved content bots can post up to 10 articles per day.
Threads asking for personal tech support may be deleted.
Politics threads may be removed.
No memes allowed as posts, OK to post as comments.
Only approved bots from the list below, to ask if your bot can be added please contact us.
Check for duplicates before posting, duplicates may be removed

Approved Bots

founded 1 year ago

MODERATORS

398

Over 2 percent of the US’s electricity generation now goes to bitcoin (arstechnica.com)

submitted 9 months ago by L4s to c/technology

159 comments fedilink hide all child comments

Over 2 percent of the US’s electricity generation now goes to bitcoin::US government tracking the energy implications of booming bitcoin mining in US.

you are viewing a single comment's thread
view the rest of the comments

[–] General_Effort 2 points 9 months ago

I can see that you don't know how this works. That's ok. It's nonsense. No one needs to know about that.

Custodial wallets work just like checking accounts, without the regulation. Crypto victims like to say: Not your keys, not your coins. The custodian owes you the crypto that you have in your account/custodial wallet. You own a debt payable in crypto. If the custodian goes bankrupt and can't pay the debts, you are screwed (as so many crypto victims have found out to their shock). The money in a normal checking account is covered by a mandatory deposit insurance scheme, so you don't have to worry about that.

Because custodial accounts replicate checking accounts, they can be just as fast and efficient, in themselves. Having to pay the upkeep of the blockchain in the background means, that they can't be as cheap as actual checking accounts. If a custodial wallet offers you better conditions than a checking account, they must be gambling with the crypto (that you loaned them) in some way, that a normal bank is prohibited from doing with customer funds.

For the sake of completeness: Exchanges in more regulated jurisdictions work like stock brokerages. They must hold the assets. In case of bankruptcy, they are special assets that belong to the customer and are not used to pay creditors in general.