Coinbase just blocked 25000 accounts belonging to Russia users
What’s the big deal?
You know there’s a war out there. Everybody is taking sides. It’s hard to stay neutral. Coinbase just exercise their right to choose a side by deciding unilaterally to block the accounts of about 25000 users from Russia. That’s a strong statement. But let’s look a little bit further what it means.
While it’s a good thing that organizations are making a strong statement by acting, and putting their money where there mouth is, and I can’t really fault Coinbase for the position they have taken, they have just confirmed what I’ve always been saying: Don’t store your crypto assets in a centrally controlled entity.
For those who have a weak memory, I encourage (re)reading the Bitcoin whitepaper. The whole point of crypto currencies was to create a model, a world, where anybody could conduct transactions without having to worry about the control of a central bank, a government, or any other central entity.
Why? Because that way, nobody can decide for you if you can, or can’t make transactions, even if they consider your motives illegitimate. When PayPal, MasterCard and Visa decided to block sex workers from using their services, it was the perfect demonstration of why a non centrally controlled payment system is a necessity. It is not up to one company to decide what you can or can’t do with your money. In particular if it’s legal in your country. PayPal, Visa or Mastercard's moral position has no place to play in this world of transaction.
While I tend to agree with the decision of Coinbase to block these accounts, on the principle of hindering the offensive of Putin. The fact that they can block, like that, whole groups of users from transacting is a clear sign that they have too much power given to them by their users.
Now the fault isn’t on Coinbase. The fault lies in the people who were naive enough to give the full control of their crypto assets to a central entity that can decide for them if they can use their assets.
Crypto currencies should always be used from a wallet where your secret key is under your unique control. Or at least where a single organization can’t take over that control if they disagree with you for one reason or another.
While it may have been the role of Coinbase to do what they did… It was their users’ fault for trusting a third party with their assets. Who knows who else Coinbase will block next, and for what reason? Sex workers? Hobbyists? Country nationals of some non-American friendly country? Anybody that one of their board member doesn’t like?
Don’t trust the likes of Coinbase. They will do the right thing (based on their own arbitrary criteria)… but that’s not why you went to crypto currencies in the first place.
Stop using central companies for controlling your crypto assets. Move your coins to wallets with on-device private-key storage, and ensure the safety of your keys by making smart backups of them.
Some examples of open source, wallets with full control of your assets:
Bitcoin Wallet — The original bitcoin wallet. Works great. Simple. But you should know what you are doing.
Mycelium — A really full featured wallet. I use this one. Can handle multiple currencies other than Bitcoin.
Unstoppable — Younger, definitely multi currency. But maybe not as stable as the others.
There are more. Also hardware tokens like Ledger which are very secure.
Make sure you use one that gives you full control on your assets. Not to somebody else. Remember why crypto currencies were created in the first place.
