How does *self-custody* scale to 8 billion people?

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It probably won’t. Because 8 billion people could never learn how to do it.

Regardless of intentions. Speakhing technically, is it feasible if they all wanted to?

Not on-chain. Eventually Lightning may be able to allow this, but not in its current state. I have news for you, though. There isn’t a single shitcoin that can do it either.

If there were a way to do it on-chain, would it not be preferred so that every user could hold their own keys and not just the early adopters?