Be your own bank
It is a common slogan for bitcoin supporters to promote its spirit. You take control of your own money. You may argue you also control your own money if you don’t let fund managers or financial planners manage your wealth. However, I am pretty sure you deposit money into the bank as everyone does in the society which is not a bad thing. You can use the debit card to pay online. You can get interests from the bank. You also don’t need to worry about a huge loss of money due to a robbery.
Yet, saving money into the bank still makes you lose part of the control to your money. You rely on ATMs, branches and the online payment channel of the bank to access your money. In financial term, you suffer from custody risk which is a risk of loss on assets held in custody (i.e. banks) in the event of a custodian’s insolvency, fraud or poor recordkeeping. Apart from that, when there is a bank run, 90% of its money disappears if the government or other banks don’t offer any financial assistance because most banks adopt the fractional reserve banking system. Banks only keep a fraction of its deposits as the reserve, i.e. usually less than 10%.
For the bitcoin system, as long as you hold the private key, you take full control of your own bitcoin. As I mentioned before, only the private key is needed to spend the bitcoin recorded in the associated bitcoin address. No one can get your bitcoin unless there are crucial flaws in its core technology. That’s why bitcoin is often regarded as digital cash.
(P.S. Don’t panic too much and withdraw the whole deposit from banks as most of your money is insured by the government.)
