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I would think that strategy would reduce the risk. Like custody of the spot bitcoin ETF to likely Coinbase, it’s possible a division of Coinbase or another custody company could provide this type of management service. I’m a true believer of self custody but understand that’s not suitable for all situations. Coinbase being the primary custodian of most of the spot bitcoin ETF firms is another significant honeypot concern. Diversification of custody for the spot bitcoin ETF firms and the Lightning node idea would be good practice in general.

sethforbtc 2y ago

I wonder if a node funding a large channel could be insured against loss from a hack. I could see an insurer offering a product like this to a corporate player….

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Discussion

twentyone 2y ago

Yea I agree this is a possibility. Insurers will always find something to insure 😁 How they would come up with the rates would be interesting. And if a loss occurred it likely would be paid in fiat. And to go to the market to buy bitcoin with that fiat to replace what was lost? Now that would be quite an event