Bank On Yourself

 Banking is complicated, why not do it yourself.

Maybe you've heard your Crypto positive friends use terms like "Being your own bank" when it comes to why they chose to buy into the digital funny money. They also might like to harp on about how we can't trust banks, as they bring up the 2008 Global Financial Crisis (GFC) or even some of the more recent events like Silicon Valley Bank, where they suffered a bank run. Due to poor risk management and rising interest rates.

Being a bank isn't easy as you have to follow strict government regulation and oversight that the average consumer wouldn't know exists. So the question arises, why would you want to take on all that risk ?

Banks run on trust, you trust that when you deposit your pay check into your savings, you'll have access to it all when you go shopping. You trust them to protect your money and even if someone uses your credit card fraudulently, you report that and after an investigation you will have that money returned. On the rare occasion the bank runs out of money, you can even trust that government insurance will mean you still have that money.

There's alot to consider if you are to operate a bank, so naturally the logical conclusion must be to use a trustless system, run by immuteable computer code as your foundation as a bank, right...?

Crypto operates in a financial wild west, while the long arm of the law does come knocking from time to time, they are mostly focused on the big time stuff, so alot of smaller financial crime just sort of happens unchecked.

Just recently an exploit was found on a NFT trading platform, specifically in old smart contracts, that had access permissions to crypto wallets of previous users. The hacker quickly stole 37 Bored Ape, 17 Mutant Ape and various other NFT's of value.

While it could be easily tracked on the blockchain, due to the immuteability of blockchain and the deterministic nature of smart contracts, if the code allows something to be done, is it actually stealing ?

Keep in mind that if a hack was to happen like this outside of crypto, the banks involved could easily revoke the transactions and reverse any that got through and if some did happen to dissappear you would rest easy knowing the bank is insured for these things and you would be reimbursed. When you are the bank however, running on a trustless system where nothing, not even mistakes can be reversed you have almost no options.

Luckily for those who had thier Ape NFT's stolen the co-founder of Yuga Labs stepped in for it's NFT holders and paid a $260,000USD (120ETH) ransom for the return of the Ape jpegs. Those affected then had to submit a ticket on Discord to initiate the return. 

How is it that the company who first sold these NFT's has no other option but to pay a ransom and use a gaming service like Discord to help orchestrate the returns ?

Surely just this small event would make you reflect and reconsider your options into trusting the blockchain. Well it sorta did the team who helped return these monkey pictures actually figures it out but in the same token, completely miss the point. Here's that tweet.

They even straight up admit that "Being your own bank is complicated" going on to also say that there is no blanket security advice for everyone and that in the world of Crypto things aren't always as straight forward as they seem, whatever that means.