Topic: Are Custodial Services Needed? - page 2. (Read 251 times)

the services such as Coinbase offer some services that people want. for example the ability to buy and sell bitcoin with fiat from many different countries, or trading in their other website (GDAX). it is also an easy to use wallet for newbies to possibly start things and learn first before moving on to a desktop wallet.
there is also the services they are offering merchants  as a payment processor (similar to BitPay) where a merchant can ask their customer to go through Coinbase and make the payment there and Coinbase then pays the merchant in bitcoin or  fiat automatically.

i see things like coinbase custodian service not as a bitcoin bank account. but as a trading account, holding just the play funds i want to risk day trading through fiat and back..
separetly id still hoard my main coins privately under my own privkey control.

anyway give it a couple years and coinbase will run a LN hub. with channels for both btc (bc1q addresses) and USD (us1q addresses) thus you will get your multisig desires.. aswell as ability to trade fiat/btc.. but yea expect AMLKYC if you want to have a channel with a hub thats owned by fiat custodial services like coinbase

but due to schnorr and segwit you wont know how many 'managers' have co-signing authority over the channels master public key funds because it wont reveal that info on the blockchain prior to it being spent. and by the time a counter party spends it without needing your authorisation its too late

so thats why im still gonna stick to legacy keypairs and not play around with segwit/LN with my main stash.  
but im pretty sure too many people are salivating about letting regulation in and KYC customers of custodian hubs. and also allow those custodians to have control of funds. purely for the greedy benefit of having FIAT trading available via LN

so im also not gonna put my main funds on LN and not treat LN as a end goal/solution to btc issues. and just treat LN as a side custodian service for niche uses of small amounts

(about as unbiased as i can make my comment)

The average, passive holders of crypto typically prefer convenience over more responsibility. There's no doubt it takes a little more effort to move your funds out of an exchange platform to a hardware wallet and backup your seed and store it, etc. Kudos to you for being more safety-conscious, though.

Serving bitcoin? I do not know about this service. But I think it would be nice to have this service. Bitcoin also needs to be nourished if we continue to over-exploit the bitcoin source will be exhausted. Exhausted bitcoins will have a bitcoin boom that falls into the bitcoin scarce condition.

Why are institutions jumping for joy at Coinbase Custody and other custodial services? The whole point of Bitcoin is that you OWN your private keys. Why would you want your private keys with someone else? Anything Coinbase can do, you can do. You can make your own multi-sig wallet, constantly track your balance with a Master Pub-Key, and be rest assured that your cold storage isn't touched by work-starved account managers tempted to steal your cryptocurrency.

Honestly, what am I missing out on?