many people are parnoid. and fear their own family getting acess to keys. so they dont just have 1000 copies of keys dotted around the house just in case..
yet then stupidly think its safer to put funds into a custodian where then the user himself does not even have a key to guarantee he can get out his deposit
i completely understand for 100 years people have trusted custodians(fiat banks) and in recent decades had the trust that their deposits are insured by governments even if custodians went bankrupt..
but the cryptosphere of crypto custodians dont operate the same way and dont have the same regulations(the consume protection part) or even a insurance policy
this is where education needs to come in
teaching people not the "get rich quick" but "if you invest, secure your investment into YOUR control.. because its YOUR property YOUR responsibility. if you hand it to someone else its no longer yours"
Topic: The benefits of self-custody outweigh the risk of exchanges - page 3. (Read 453 times)
You may have heard of James Howells and his $11 million plan to find a hard drive with $181 million in Bitcoin. That is a risk of self-custody. His chance of finding his bitcoin is actually not too small.
If you had bitcoin held on FTX, there is no amount of money or time that will bring those coins back. They are gone. You have a 0% chance of finding those bitcoin.
Not your keys, not your bitcoin.
If you had bitcoin held on FTX, there is no amount of money or time that will bring those coins back. They are gone. You have a 0% chance of finding those bitcoin.
Not your keys, not your bitcoin.
The subject of this thread is that self-custody risks outweigh the risk of exchanges, and they you seem to provide an argument in direct contrast with that subject line. Anyway, there are definitely risks to self-custody, but stupidity isn't one you should be too worried about, unless you're an idiot that might throw away your private keys, in which case it might be better to store them on exchanges. I think a bigger risk is the $5 wrench attack or having your computer infected with some sort of virus. This is why people give ways to secure BTC without needing to be connected online and you should take measures to make sure a wrench won't be able to expose your private keys (not having direct access to them is a win).
His mistake was that he didn't have the priv keys written somewhere.
AFAIK he wasn't expecting BTC to actually become big so he just didn't mind the coins he got until its too late. Now he wants to overhaul a mountain of garbage. Today its widely advised even altcoins holders keep their private keys saved not just on a txt file but written on a piece of paper to minimize the risk even if they lose thier hard wallet, computer crash, or phone loss.
AFAIK he wasn't expecting BTC to actually become big so he just didn't mind the coins he got until its too late. Now he wants to overhaul a mountain of garbage. Today its widely advised even altcoins holders keep their private keys saved not just on a txt file but written on a piece of paper to minimize the risk even if they lose thier hard wallet, computer crash, or phone loss.
I don't think the chances are that high but this is one person and only one copy. Self custody allows you to make multiple secure copies/backups of your wallet which can make it a lot harder to lose.
If an exchange doesn't have enough copies (such as due to problems with trust) then you've only got that to fail before your coins are gone.
If an exchange doesn't have enough copies (such as due to problems with trust) then you've only got that to fail before your coins are gone.
You may have heard of James Howells and his $11 million plan to find a hard drive with $181 million in Bitcoin. That is a risk of self-custody, but his chance of finding his bitcoin is actually good.
If you had bitcoin held on FTX, there is no amount of money or time that will bring those coins back. They are gone. You have a 0% chance of finding those bitcoin.
Even in the worst case scenario, self-custody is better than an exchange.
Not your keys, not your bitcoin.
Edit:
I originally had the title worded wrong. I meant the risks of self-custody are worth taking over the risk of exchanges.
If you had bitcoin held on FTX, there is no amount of money or time that will bring those coins back. They are gone. You have a 0% chance of finding those bitcoin.
Even in the worst case scenario, self-custody is better than an exchange.
Not your keys, not your bitcoin.
Edit:
I originally had the title worded wrong. I meant the risks of self-custody are worth taking over the risk of exchanges.
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