Nsec.app and local signers like Amber made custodial providers less interesting for tech savvy and diligent users that know how to self custody; but for onboarding a lot of casual newcomers, a custodial solution still seems a needed solution.

I'm reading the MuSign2 and Frost proposals, it's an interesting approach, but how do you ensure a robust infrastructure of more than 3 parties, which should be totally disconnected to demonstrate security? What incentives should these nsebunker providers have? Do they get paid? And should the user choose them randomly and pay them separately? And what happens if a payment is not made or if multiple nsecbunkers disappear at the same time breaking the quorum?

An alternative solution is to offer a single custodial nsecbunker, supported by a well-known entity (OpenSats?) and build a really clear user experience to lead the user (maybe forced after x amount of time?) to self-custody their key. Of course, this kind of structure would immediately become a centralized weakness, and thus a clear target for anyone who wants to destroy Nostr. Not to mention that it is not an absolutely easy structure to create and manage with good security standards; who would actually do it?

I don't know what would be the most effective way to proceed. I would probably try to elaborate the Frost approach, paired with a real good UI to enforce the user to keep a backup and validate it randomly every so often.

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Technically you would still hold the key as a user, stored somewhere safe. You just wouldn't use it daily, as all your signing would be done by these providers in the cloud. So if they disappear you can get your key from storage and use it to create more shards. You could also distribute shards to multiple providers, like 5, and make the signature be possible with just 3 out of the 5, and so on.

I don't know about the incentives, it would be almost free for these providers to support a new user, so I'm not sure payments will be needed. I mean, Blockstream has been providing co-signing services for Green wallet users for years at zero cost, for example.

I would say we need to hurry because the bankers are starting to get their money back…..

The Trusts are not funds registered under the Investment Company Act of 1940 as amended (“1940 Act”) and are not subject to regulation under the 1940 act, unlike most exchange-traded products or ETFs. An investment in the Trusts is subject to a high degree of risk and heightened volatility. Digital assets are not suitable for an investor that cannot afford the loss of the entire investment.

And there will be losses

> Technically you would still hold the key as a user,

Good, so we align on my last sentence "paired with a real good UI to enforce the user to keep a backup".

That makes sense.