Importance of Bitcoin Self-Custody ‘Not Your Keys, Not Your Coins’
Throughout the cryptocurrency community, the phrase “Not your keys, not your crypto” is frequently repeated. The events of 2022, which included multiple well-publicized bankruptcies, have confirmed this proverb once more. You run the danger of losing all of your cryptocurrency assets if you don’t have control over them because traditional banking is protected by FDIC insurance.
Even Nevertheless, a lot of people still store their bitcoin with centralized organizations like Coinbase. This dependence presents a significant query in the continuous discussion around Bitcoin self-custody.
Anchor Rob Nelson brought up an important point during a recent Roundtable discussion: Is self-custody really required? Nelson voiced a frequent reluctance, wondering if, with the alleged complexity of doing so, he really needs to handle his cryptocurrency assets himself. He observed that a lot of people shy away from self-custody because they find it intimidating and don’t want to put in the time to learn.
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Bitcoin ETFs, Centralized Exchanges
In response, Custodia Bank CEO Caitlin Long acknowledged these worries and suggested multisig arrangements and exchange-traded funds (ETFs) as alternatives to self-custody. “There are ETFs, centralized exchanges, and multisig setups where a service provider helps you manage your private keys,” Long said.
She did stress, though, that in the absence of self-custody, people are essentially leasing their assets to potentially unstable institutions. She maintained that achieving true financial security requires mastering self-custody.
Drawing a comparison to the American heritage of independence, Nelson proposed that anticipating future digital disruptions ought to adhere to the same guidelines. “If everything goes wrong, or the power goes out, I know what to do,” he said, suggesting that handling digital money should be approached with the same attitude. Long concurred, pointing out that people in less developed areas frequently learn strong money management skills out of need.
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Long emphasized the significance of self-custody even in the comparatively stable American financial system. “If you knew you could control your own future and didn’t invest the time, would you regret it if something happened?” she asked, drawing a comparison between it and purchasing insurance.
She stressed the importance of self-custody for independence and financial stability and urged individuals to treat it with the same seriousness as an insurance policy.
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