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The Custodian Menace – a small number of custodians hold the private keys to a large amount of bitcoin. This is not good for Bitcoin (article by Jameson Lopp)

The Custodian Menace – a small number of custodians hold the private keys to a large amount of bitcoin. This is not good for Bitcoin (article by Jameson Lopp)



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21 Comments

  1. “Every bitcoin that is held by an institution is a bitcoin that has had its security weakened by being subjected to bureaucratic and political decision-making. “Not your keys, not your bitcoin” rings true because when you have to ask someone for permission to transact, you are no longer in a position to resist censorship. Bitcoin owners must not trust third parties to act in their best interest!”

    This is the true message of the article and, deeper, it’s the true message about Bitcoin.

    Bitcoin is best used decentralized.

    Not your keys, not your coins.

    Never let anyone trick you into giving up custody of your Bitcoins. Banks and institutions are THE BIGGEST SCAMMERS IN HISTORY.

    You think the reddit chat scammers are bad? Wait till you see a scam that’s endorsed by a bank.

    Think defi, which is Bitconnect 2.0, another Ponzi scheme.

    Think interest on your Bitcoin, which is just another straight up Ponzi scheme.

    Don’t put your Bitcoin in a bank or anywhere. Hold your own keys. You’re done. That’s it. That’s all you ever need do. That’s the beauty of Bitcoin.

  2. this is why I’m hesitant to purchase Grayscale GBTC in my retirement account

    I feel like there is tremendous upside as long as they don’t lose their btc (either by incompetence or theft or government confiscation). But that is a major risk imo.

  3. I respect Mr. Loop and his amazing work, but I ask myself: “Why then Casa don’t let the user understand how THEIR keys are handled?
    How can I be my own bank if I’m not sure that the software could send my keys somewhere without me being aware of it?”

    [https://twitter.com/fulmolightning/status/1075361674016776193?s=20](https://twitter.com/fulmolightning/status/1075361674016776193?s=20)

    [https://twitter.com/CasaHODL/status/1298296548791656448?s=20](https://twitter.com/CasaHODL/status/1298296548791656448?s=20)

  4. Paying capital gains tax on bitcoin is also bureaucracy and yet here we are having to pay tax for bitcoin when we sell…well at least where I live. Annoys me but like they say you cant escape death and taxes.

  5. Ok, good, but the problem here is that few people know how to protect their coins in non-custodial way. Even the article says “Be your own bank!”, but they don’t tell you how to store your keys and where.

    Nobody explains you that, and this is in my opinion the biggest problem here.

    If we want people to hold their own keys we need first to teach them how.

    Also what I think is a big issue is that you need to spend $50 to $100 for a Cold Wallet to have your coins secured. This is pushing many people away.
    There has to be done something that people could buy and store their coins EASY and AFFORDABLE.
    In my opinion people want to keep their savings and not spent them on something like cold wallet, cause that’s the point of saving – not spending on things.

  6. Most likely it’s a phenomenon of the very early days of bitcoin. With education, bitcoins should flow from institutional holding into “be your own bank” hands, not the other way around. Should also help that the vast majority of bitcoins have already been mined. Let the education go into high gear (as the author of the article is doing), and let the proper flow of bitcoins proceed.

  7. They can cause a price crash by be selling, but can they do any serious long term damage?

    This is a big reason I prefer proof of work over proof of stake. These hodlers would have a hard to determine the power they would have.

  8. Interest in my litecoin is something I need . Interest on my bitcoin is something I need . You might not need it becuase you have a job. And 401k and all that fancy bs. But I don’t have a job . Or never will have a job. So interest is crucial for my life .

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