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Everyone who bought and held on to their bitcoins in their wallet instead of storing the coins with a custodian (exchange or otherwise) is still in full

Everyone who bought and held on to their bitcoins in their wallet instead of storing the coins with a custodian (exchange or otherwise) is still in full possession of said coins. not your keys, not your coins as the saying goes. "Not your keys, not your coins" is probably the single largest blocker to crypto adoption, in my opinion. With every other financial asset, custodial accounts just work. Putting a hundred dollars into a bank account is, thanks to bank regulation and the FDIC, the same as putting a hundred dollar bill underneath my mattress. I've traded a bunch of stocks, and not once have I ever thought about acquiring an actual stock certificate, because thanks to regulations and the SIPC, having stock in a custodial account is the same as having a physical stock certificate in a safe at home. "Not your keys, not your coins" is viable only in some kind of libertarian fantasy. In the real world, regulated, insured custodial accounts are useful and available for pretty much every security available to individual investors... save crypto.

kkielhofner 4y ago
Exactly. The vast majority of crypto "usage" is people trading on exchanges - which is pretty difficult to do when your crypto is stored in a wallet with the seed phrases etched on steel plates and buried in your yard... As you noted the overwhelming majority of money worldwide is stored very safely in custodial fashion so people can actually /do something/ with it. As I've also noted before we're going to see a drastic uptick in the coming weeks/months/years of people losing access to all of their crypto because of the UI/UX challenges inherent with self custody. I don't think many of the people who are rushing out to buy a Ledger or otherwise move to a non-custodial wallet fully understand that unlike everything else in the world there is no password reset option or customer service number to call when people inevitably do what people do and make a minor mistake. There is going to be a lot of heartbreak from people losing everything because of forgotten passwords, wallets getting hacked, etc.
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kkielhofner 4y ago

Exactly. The vast majority of crypto "usage" is people trading on exchanges - which is pretty difficult to do when your crypto is stored in a wallet with the seed phrases etched on steel plates and buried in your yard... As you noted the overwhelming majority of money worldwide is stored very safely in custodial fashion so people can actually /do something/ with it. As I've also noted before we're going to see a drastic uptick in the coming weeks/months/years of people losing access to all of their crypto because of the UI/UX challenges inherent with self custody. I don't think many of the people who are rushing out to buy a Ledger or otherwise move to a non-custodial wallet fully understand that unlike everything else in the world there is no password reset option or customer service number to call when people inevitably do what people do and make a minor mistake. There is going to be a lot of heartbreak from people losing everything because of forgotten passwords, wallets getting hacked, etc.

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