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Custodian services vs self custodian.

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Written by   84
1 month ago

It is no secret that many services in the crypto currency world now operate in a custodian service basics, even the first coin Bitcoin is trying to implement a custodian approach to solve scalability, it is not entirely custodian but little by little the users are choosing custodian services to avoid the headaches of dealing with private keys and security.

Custodian services are those services where an user doesn't control their own private keys, most of the most common services today are of course exchanges accounts like Coinbase, Binance, Gemini and many others. You can also add services that give interest yield to users for holding their coins with them, Cobo wallet, nexo and many others, even if they are called wallets they are not wallets they are services where the user no longer controls the private keys and must ask for permission every time the user wants to use his own money.

It is true that custodian services offer some advantages to first time users, like easy access to their satoshis and even yield paying accounts that are better than regular banks accounts, but those services have a counterpart on which users may lose more than what they can get from the convenience of these services. One of the risk of having your assets with custodian services is that the government can order your service to stop and seize your money, you can also lose your money to a hack against the service where you have your money, you could also lose your money because the service operators decide they have enough money to run for it.

Many people are depositing their satoshis gained from income or tips right into custodian yield services, but if a hack happens, or if the developers of that website, wallet service or custodian get attack by either a government or group of hackers, those yields won't be enough to justify the loses, and it will be again another Mt Gox.

Self cusotdian services don't offer yield on your holdings, self custodian services must be secured by the user or users meaning users must be responsible with their own money, but it has the advantage that the user can choose the time and when to spend the funds without having to explain or ask for permission to third parties. It will also mean that governments will have to talk to the person in control before trying any confiscation attempt.

Also self custodian wallets is what makes crypto secure against banks money printing, and fractional reserve banking as well. It also means that users can know exactly what they own, and can audit themselves not only what they hold but they can also audit the total supply of coins to guarantee that the money supply in a crypto ecosystem has not been altered by a third party, that applies to any crypto currency, with custodian services you can't do that because a third party hold the records of who own what to whom.

Self custodian wallets is what makes Bitcoin BCH and many other currencies, do what they are today, and it is self custodian that takes the power of money control from governments and changes it to the people. Self custodian is the soul of crypto currencies as money without it you are just using another bank, and if you use banks you will have the same problems today with your fiat but now in your crypto currency as well.

Protect the Bitcoin idea use self custodian wallets, so that humanity can liberate itself from the banks and governments printing money until your currency becomes worthless and useless. like many fiat currencies and government has done already.

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Avatar for francis105d1
Written by   84
1 month ago
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