After reading of the EU Parliament ECON from other thread (https://www.reddit.com/r/Bitcoin/comments/toz4km/eu_parliament_econ_committee_to_vote_on_thursday/) I thought it would make sense to create a new thread with the collection of WHY Non-Custodial Wallet shouldn't be banned. So then we're prepared for the arguments in the future in case if we have to get them in touch per E-Mail/Twitter/Social Media etc. again
If you have counterargument, please write here so then we can give another argument of the counterargument. You can also extend the arguments further to be more polished.
I have some arguments over there of why banning Non-Custodial Wallet is a bad idea (keep the term "unhosted" b/c that's the term which they used). Sadly I'm not good at making arguments, so feel free to copy & paste it and make it a proper one lol.
If the owner of the unhosted wallet are using it for illegal activity, it wouldn't make much difference if we ban it or not because they would just continue using it for illegal activity.
Banning unhosted wallet reduces the security way less. There has been a lot of hacks on, for example, exchanges which they offer hosted wallet as well and the customer lost all their money. Also very common is that exchange can't be trusted as well, there has been cases where they were running away with our money. Unhosted wallet gives us the ability to secure the funds.
Banning unhosted wallet is more resistant against hacker (= hardware "unhosted" wallet) and protect your privacy from hacker and unauthorized third parties.
Banning unhosted wallet is like banning the leather wallet with the money on it (which... is already happening anyway I guess? lol)
Banning unhosted wallet would hurt Web3 business a lot since most rely on "unhosted" wallet.
Banning unhosted wallet would be similar as banning gold in 1934 (perhaps more context would be good here of why it didn't worked well)
"Unhosted Wallet" is not a correct term. A Non-Custodial Wallet still requires an active internet connection to make transactions. It should be rather referred as "self-hosted Wallet" or better, just plain "Wallet" for non-custodial and "Custodial-Wallet" for custodial.
Banning unhosted wallet is same as banning owning gold in your own house / safe.
Yes I'm well aware of it that those arguments are more or less "their goal" since their sole purpose for this is for having more control of our private financial purpose
I can also list the arguments here in this thread from the comments below. =)
EDIT: Arguments from Comments below:
Bitcoin can't function without non-custodial/self-hosted Bitcoin Wallets because Bitcoin needs transaction fees to function properly when the block subsidy becomes negligible or zero.
Way more than half of the nearly 19 million Bitcoin today, probably more than 70 percent, are privately held. Do lawmakers really expect that all these bitcoins around the world need to be sold, then re-bought at custodial services? This seems to come under the category of frivilous lawmaking. Can a judge force lawmakers who write frivilous laws to be personally accountable for compensation for wasting the courts time with a lack of research and understanding before making the law of the land?
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