Through various conversations with individuals, businesses, and those unfamiliar with the world of Bitcoin, I've observed that the topic of Self-Custody raises concerns for many. It's evident that individuals less inclined towards technical aspects might be hesitant to personally safeguard their funds, as it deviates from the familiarity of the traditional fiat world. While I strongly advocate for Self-Custody, considering it a fundamental principle of Bitcoin, I increasingly understand that there are people who would feel more secure if they didn't have to manage their Bitcoin themselves.
In our traditional financial system, there is a concept of deposit insurance for banks, providing a safety net in case financial institutions face issues. This assurance already instills a sense of security for the average consumer. It's essential to continue emphasizing the importance of Self-Custody to newcomers in the Bitcoin space. However, I've started to ponder whether Self-Custody is universally suitable, especially considering feedback from non-Bitcoiners expressing certain anxieties.
I realize I might face criticism from others, but I genuinely question whether Self-Custody is the right fit for everyone.
YES43.1%
NO56.9%
65 votes \ poll ended
self-custody is the best path for any user who really wants to know how bitcoin works. And yes, self-custody is for everyone. Let me explain why is for everyone. The first reason is the most powerful.

1- Exchanges tell you they'll lose and seize your bitcoins if they have to

Look what Kraken CEO Jesse Powell told you:
(...) If you're worried about it, don't keep your funds with any centralized/regulated custodian. We cannot protect you.
Look what Bitfinex's non-financial advice:
Our advice is simple: Bitcoin and crypto should never be left on an exchange or custodial platform for longer than necessary (...)
It's clear, right? No need to explain what they say IMO

2- Non-custodial is a fancy way to say you don't have shit

Please, please understand that the relationship between you and your interactions with the blockchain is through your private keys. If you don't have your private keys, someone else is borrowing you the entrance to your transactions.

3- You don't have your PKs, you're not safe

The OP said:
I increasingly understand that there are people who would feel more secure if they didn't have to manage their Bitcoin themselves
Yes, I get that point. Many people feel safe in the hands of others...until they don't. How many centralized projects need to fuck up in the way to understand that altough you have your own access, you're just using someone else's access, the real user, not you. You're at best an observer, not an user.
And I get the point also here:
there is a concept of deposit insurance for banks, providing a safety net in case financial institutions face issues.
With bitcoin, we don't have these things and we don't need to because...we...have..to...control..our...own..keys.
You don't like to watch your own money? It's ok, then bitcoin is not for you. That's not a bad thing.
reply
Bitcoin puts a real price on stupidity, which is a very good thing. If people are too stupid to self custody they will pay the price eventually.
reply
not sure, but should be the ultimate goal for everyone, and the sooner you reach there the more free you are.
reply
reply
reply
Even if the UX can get there, Bitcoin currently can't scale to have everyone being self custodial
reply
Agreed on scaling but I interpreted the OP question as to whether the self custody UX is for anyone and yes I think we will get there soon.
reply
I will repeat this over and over: Bitcoin is not for the weak, only for the brave and knowledgeable.
Forget about dumb people that can't even save 12 fucking words. Those will get what they fucking deserve!
reply
I genuinely appreciate your perspective. The world is not only comprised of brave and knowledgeable individuals but also includes many who may be less fortunate or lack access to technical education. It would be truly remarkable if Bitcoin could evolve to a point where it becomes accessible to everyone, including those facing challenges, and serves as a means to replace traditional fiat currencies. The vision of Bitcoin being widely used by a diverse global population is an inspiring one, and I share your hope for a future where it can bring financial inclusion to (not) all.
Still padawaning.
reply
Did you ask these kind of people if they are capable to save 12 fucking words?
Bitcoin is not only about using it as another fucking paypal... they can use Strike for that. Bitcoin is about changing totally you whole mind, body and soul.
I stand my ground and sustain what I always said:
I have a hard time answering this question as well. But I do want to comment on your comment:
"as it deviates from the familiarity of the traditional fiat world."
The fiat system is not easy to use, and is full of risk. People have learned to use the fiat system. They can learn Bitcoin too. They just have no incentive to do so, when it's hardly used as a currency anywhere. It feels like extra work. They need to have a reason to put in that extra work. But it's really not hard. It just needs normalized, the way fiat is normalized.
reply
Once I read here - Bitcoin is for everybody not for everyone
Most of us are already here and our mission to teach close friends and family
reply
Anyone, not everyone.
reply
Thanks However I like everyone more
reply
I answered no because I think realistically it will always be divided. My grand mother couldn't manage her own money without a (legal) supervision for her bank account because she was being abused by her nurse. I also knew someone who had to lived with his parents because his father had dementia and would lose $5000 in cash somewhere and wouldn't remember anything. I have known someone working at Sony who had half of his brain taken after surgery. His job was to improve the UX of remote controls for old people. I think the future of hardware wallets will take the same path to make it easier to use for everyone (e.g.: improve screen size, use high-contrast, etc). In some cultures it is the woman who manages the money and the man who works. So we may find disparities between those who are more inclined to the idea of self-custody and those who prefer to delegate the control of their money based on cultural differences.
reply
Those are a few relevant arguments you have!
reply
I think there's always going to be people who (have to) rely on others for their security. Even if it's "please set up my self custody for me".
Not everyone will hold their own keys, but the vast majority of people would be able to self custody. With time it's only going to get easier and more secure, so I'm bullish we'll increase that number over time.
reply
Motivated self sovereign individuals will self custody others won’t.
The tech and the tools are there for the majority of people who wish to take matters into their own hands.
But everything is not for everybody so custodial solutions that minimize rug risk will exist! Just like some people are eager to drive a car and others never learn and deal with the consequences of not knowing how to drive.
reply
Yes, it's the best way to stay safe out here
reply
Yes, that is my personal opinion too. I'm just wondering more and more whether this is really the right path towards mass adoption.
reply
For those who know little about self custody...
Private Key Control: Individuals store their private keys securely, often in hardware wallets, paper wallets, or encrypted digital storage.
Independence: Self-custody allows users to transact and manage their assets without needing to rely on third-party services.
Security Considerations: While self-custody provides greater control, it also places the responsibility of secure storage and backup of private keys entirely on the user. This means taking precautions against loss, theft, or unauthorized access to the private keys.
reply
Not for me that is easily careless with stuff.
reply
The best case scenario I can dream up is localism. Few known community members holding multisig keys for their local community and providing custody to the normies. If they cheat, local community can "touch them".
reply
No. And not everybody can economically own and move an UTXO. But more self-custody is still needed. Way more.
reply
I think its a good thing to get some individual responsibility back. It takes time to learn, and you really want to understand it well. Even if its the so called Uncle Jim taking care of the extended family. It would be a better world going back to a well connected family.
reply
Unfortunately bitcoin self custody is complex and easy to mess up, even for seasoned bitcoiners (look at Luke Jr). It's not as simple as just memorizing 12 words. First of all, memorizing your seed is a horrible idea. Please don't do that. You will forget it! Second, it's where and how you store them, how you use them, how you transport them if needed. There are many variables. OPs mention of custody inducing anxiety is relevant. One mistake can cost you everything, and when it comes to self custody mistakes are simple to make. That can be motivation for education, but not everyone is built like that.
Self custody has to be backed by understanding of risk and the ability to take ownership and responsibility, which are characteristics of a mature individual. Most people are ignorant, they seek comfort and rely on custodial trust without understanding its implications, and not even caring about them. If you're not already inclined towards sovereignty, the biggest pro self custody lesson is to get burned badly by the custodian system, and then having the willingness to educate yourself on better alternatives.
This is a hard point to grasp but in some cases it's probably not even recommended. It's just too complicated for some people. Old people, or people who are not tech savvy, won't be able to store their wealth securely by themselves. The lucky ones will have a knowledgeable good willing family member or close friend help them. To the not so lucky ones I wish them all the best.
There's also the whole KYC problem. We haven't even reached the point where self custody is banned yet. The "then they fight you" phase has barely scratched the surface. What will people do when the government knocks on their door with a 6102 order? Even the simple thought of something like that happening can throw people off. The threat of violence and people being compliant are big reasons why they won't choose self custody.
Nontheless, I think self custody will rise. I also think custodians will never go away. Both will exist.
Self custody is freedom, and freedom comes with responsibility and the need for understanding. Education and willingness to help are keys to a more sovereign society.
reply
I'm still waiting for my slap from @DarthCoin :p
reply
sometimes I am just reading... I notice that if I am the 1st one commenting, the opinion on that post is changing. I don't want that. I want people TO THINK FOR THEMSELVES...
Yes and no. It is suitable for everyone (as in person) but not every entity as currently constructed. There is no way any large entity is going to undertake the legal liability of screwing up self custody. They would rather pay someone else to do it who they in turn can sue if they screw it up.
reply
The way you have worded that, the answer has to be no.
Think of it this way - there is always trust involved. With the purest form of self custody it’s just that you are trusting yourself - not to lose it.
There is always going to be a trade off between risk of loss and risk of theft. If your risk of loss becomes too high from self custody, you’re better off trusting another party, which then unfortunately increases risk of theft.
Saylor has spoken well on this - in terms of thinking through an individual, a family, a community, a company, etc etc, and what might be right for each of them. There are always trade offs.
reply
Eventually...yes, self custody is right for everyone
Custodial solutions are good for priming newcomers
But the end goal is doing away with custodianship -- and i dont care how delusional that sounds in primitive 2023 lol. They'll stick around like the library or the church does, but the monopoly is ending
reply
It probably won't matter because having one's own UTXO is likely too expensive for everyone if bitcoin is widely adopted as money. Many people will have to live with custodial services before they can afford self-custody.
reply
not for lightning node. fuck i've been trying to figure this garbage out for like a month.
Payments still don't go through but I can send money. I closed my channels and disconnected my peers and I think I lost all my sats doing that on the channels.
reply
What UI are you using for channel management?
I thought Thunderhub and Ride-The-Lightning pretty much dominated, and both these tools make it pretty easy to manage channels.
One tip: Open at least very large channel to a huge central hub such as OpenNode or WalletOfSatoshi. That way, you will have liquidity out to most of the world.
You won't be able to receive any funds if all the funds are only on your side, which is the case after opening a few channels. So, spend some Bitcoin in order to push Sats over to the other side of the channel.
Happy to answer any questions if you have em.
reply
I see why there is an even split, it makes sense. For the majority self-custody is right. But I also understand where an elderly retiree could use some help. Sometimes they can't remember what they had for dinner last night (just look at your prez :-)) so companies like Fidelity (like them or not) can step in and be useful and accountable for 12 or 24 words safekeeping. There are certain things in life you can't do it alone, one needs some help sometimes.
reply
I think YES, it's important to shift the current mentality.
But I also think self-custody should start simple for newcomers:
  • 12 words are enough
  • generating the seed in a clean personal computer, with basic security connections, with well-known open-source verified software, it's enough (no need for hardwallets)
  • writing it on paper, well hidden, with backup and no single point of failure is enough (metal plates are overrated)
newcomers are scared if they need to learn and go through all the best pratices of self-custody in the first day or even in the first year
reply
Not everyone can self custody. Much like how not everyone could safeguard their cash for banks to grow.
For bitcoin, I think it's quite important to be your own bank. But with the advent of fedimint, shared custody is what makes the most sense.
So not fully custodial. Baking instead, on members who do know how to self custody, to potentially take the burden of doing local community shared custody.
reply
Component stack: at a (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:382816) at div at https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:382309 at Markdown (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:290050) at div at https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:380656 at div at div at div at div at Comment (https://a.stacker.news/_next/static/chunks/657-20967f08bd8cda96.js:1:12512) at Comments (https://a.stacker.news/_next/static/chunks/7822-25e723dffca42454.js:1:1966) at div at RootProvider (https://a.stacker.news/_next/static/chunks/657-20967f08bd8cda96.js:1:27802) at ItemFull (https://a.stacker.news/_next/static/chunks/7822-25e723dffca42454.js:1:15007) at main at https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:238388 at Layout (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:208680) at Item (https://a.stacker.news/_next/static/chunks/pages/items/%5Bid%5D-2853d7a6de9ddcbb.js:1:531) at ErrorBoundary (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:151899) at BlockHeightProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:100939) at ShowModalProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:225342) at ToastProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:387183) at LightningProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:210929) at PriceProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:229430) at ServiceWorkerProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:238480) at LoggerProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:217332) at MeProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:22:219075) at ApolloProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:6478) at PlausibleProvider (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:7303) at ErrorBoundary (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:151899) at MyApp (https://a.stacker.news/_next/static/chunks/pages/_app-b751a051034d52aa.js:41:154363) at _PathnameContextProviderAdapter (https://a.stacker.news/_next/static/chunks/main-c158e2bb6067d2d0.js:1:63848) at Container (https://a.stacker.news/_next/static/chunks/main-c158e2bb6067d2d0.js:1:9851) at AppContainer (https://a.stacker.news/_next/static/chunks/main-c158e2bb6067d2d0.js:1:11913) at Root (https://a.stacker.news/_next/static/chunks/main-c158e2bb6067d2d0.js:1:15556)
deleted by author
reply
Really? How about Your Mother? or when she turns 90? Really, no excuse...? You might want to reconsider your statement.
reply
Old people will not use Bitcoin. Period. Stop asking that stupid question "what about grandma". FUCK GRANDMA, she's already about to die. Think about the young, they are the future not grandmas.
reply
haha the club swings
reply
deleted by author
reply
12 words and a passphrase.
No excuse.
If my mom can't do that on her own, i will do everything i can to help her do that.
reply
Not everyone has a trusted bitcoin advisor in their social circle.
In the past couple years I've known 2 older people to loose a significant amount of money via scams. These people were both older men, formerly very, very sharp, who were not quite sharp as previously, as they aged. They can no longer deal with remote controls and smartphones very easily, either. The idea that they could self-custody their bitcoin is a non-starter.
I definitely do not think that self-custody is suitable for everyone. However, that doesn't mean I think their btc should be held on exchanges. Just that I'm hoping for other options to come soon. Like better tools, time-lock, easy-to-use multi sig, etc. Or maybe these tools are already out there.
reply
I would agree. There is a room for custodial services that is done right. What that actually means I'm not sure. But I see big names like Fidelity (on purpose said LIKE Fidelity, not necessarily them), which can be sued and held responsible, to be useful in situations like that. Also, let's say you got lucky and accumulated over 150 BTC, you will not keep that in one wallet I hope, one should spread that around which means multiple wallets and multisig, etc. That sounds like a business to me. Just saying...
reply
I've actually heard of people who can't remember a 4 or 6 digit pin code for their bank card :p
reply
I know someone who has her wife spell out passwords and pins out loud, anywhere, anytime, even at restaurants, in public spaces and wherever.
If someone wait a bit he could just swipe his phone after her heard his banking app password and steal everything.
reply
Haha. Sounds like a human NFC security bug.
reply
Lucky for him it's not a bug, it's not fixable... 🙃
reply
I think fixing bugs in regards to NFC and security could be the same level maybe? :p
reply
Could be. 😎
If they fail just stick a "WONTFIX" and they're done.
reply