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Custodial solutions do not scale bitcoin.

They expand permissioned access by introducing unacceptable (in my option) tradeoffs.

Most of the wealthy people I talk to say that they prefer a centralized solution because they worry about losing their keys or not being able to pass their wealth to their heirs.

My hope is that Fedi-style solutions grow in popularity because the alternative (at least for the foreseeable future) is centralized solutions like ETFs and regulated exchanges.

Bitcoin self-custody is unsolved for wealthy normies. It’s missing key recovery and key inheritance. It seems that only a small percentage of people are willing to take full personal responsibility over their wealth, and that percentage declines as age and wealth increases.

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Discussion

QnA 2y ago

Yeah it's no unsolved at all. It's just not desired because most people hate responaibilty.

Fedi style solutions don't fix this either. The custody might be shared, but all the large 'trusted' ones will be regulated entities that can and will bend the knee to governments.

zhenya 2y ago

Folks are conditioned to trade effort/convenience for 2-4% fees. They’re conditioned to justify the trade with rationale 1) too difficult/technical or 2) that they can go earn more by focusing on what they can do well.

Neither is true. The things you have to do to get ahead while leaking 2-4% top line ain’t pretty and are rarely ethical.

techfeudalist 2y ago

People like us are comfortable with the options because we’ve probably spent over 1000 hours studying and researching. We also have a tech background which makes it more familiar.

Consider my dad. I’m regularly asked to help him reset his normie passwords. He often loses / forgets. At least with fediments, I could act as one of a few custodians for my friends and family.

What are the alternatives for wealthy normies? Custodians like Unchained are regulated and do KYC. I don’t have high hopes that my dad would be able to properly manage a set of multisig wallets and their output descriptors.

What would you recommend for someone like him?