10 sats \ 2 replies \ @nerd2ninja 31 Dec 2023 \ on: [outdated] Not your keys not your coins bitcoin
If I'm being realistic, even though it is a risk (counter-party risk) people will use custodians to fill the gap when innovations are lagging behind. What I don't want to see and what I actively fight against, is when the technical solution is developed and ready to use, but the userbase has become complacent with the counter-party risk of custodians and don't care enough to adopt the new innovation.
Custodial solutions will have a relevant role but still newcomers have to adopt the self sovraign paradigm, meaning that for long term storage they still need to be sovraign but they can accept some counterparty risk for short time periods.
Am I summarizing correctly what you said?
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This might help clarify. Before the lightning network, people were seriously talking about using custodians to transfer Bitcoin around as a way to scale Bitcoin. Now, the development has caught up a bit and people can just use lightning now.
Before people said lightning was too complicated so they just used custodians, now we have lightning wallets they do all the channel management and charge for inbound liquidity and everything all at taps of buttons.
Now, people say the fees are high even to create lightning channels and so I can't predict the future, but I currently believe we will see timeout trees: Scaling Lightning with Simple Covenants by John Law
Each of these stages further and further kill the custodial use case. They make fees manageable and usability just as easy, but with none of the counter-party risk like rug pulls or bans or closed monetary systems that could arise. All that's left once its been made, is for the users who had the complaints before to swim on over to the new thing. They don't as long as their custodian is comfortable. Thankfully, the pain of using custodians pops up pretty quickly in Bitcoin land.
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