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OnRamp guy says self-custody is the reason mass adoption hasn't happened www.fiatcave.com/p/the-hard-truth-about-bitcoin-adoption

1839 sats \ 49 comments \ @Scoresby 15h bitcoin

I've had my doubts lately about the mass-adoption of self-custody. But there is this phenomenon where someone else expresses criticism of a thing you yourself are doubting and the result is that it redoubles your fervor for the thing. Such was my reaction to reading this piece by Jackson over at OnRamp.

After several "strong" statements advocating for self-custody, he says:

The models of custody we still rely on were designed when Bitcoin was just hundreds or thousands of dollars. Yet, people were still using those same setups at $10,000, $50,000, and now $100,000 and above.

And now we expect the mainstream to step in and secure meaningful wealth in that same framework?

That’s not realistic. It’s not scalable.

And if we’re honest, it’s one of the key reasons mass adoption hasn’t arrived.

Do you think self custody is a blocker to mass adoption of bitcoin?

Later, he says

Bitcoin doesn’t need Wall Street to create adoption; it needs infrastructure that actually enables ownership...without usable custody solutions, Bitcoin wrappers will eat Bitcoin.

Calling the thing OnRamp does (see below) "actually enabling ownership" is crap.

But it does lead to this question:

Does the challenge of self-custody push people toward things like MSTR, ETFs, and plain old custodians?

Seeing self-custody put in such a harsh light makes me want to put much more effort toward promoting self custody. As down as I am on our prospects, I don't believe OnRamp has the right approach at all.

If you are unfamiliar with OnRamp, here's a description of the custody solution they offer:

They call it multi-institutional custody. OnRamp puts your bitcoin in a 2 of 3 multisig where OnRamp has one key, BitGo has one key, and CoinCover has the last key.

In the ad copy they put a lot of emphasis on the claim that no single party can move your bitcoin. However, I would point out that you aren't very well able to use your bitcoin either. In their setup, you are 100% reliant on OnRamp and at least one partner to move the bitcoin they hold on your behalf. You hold zero keys.

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102 sats \ 17 replies \ @0xbitcoiner 14h

Do you think self custody is a blocker to mass adoption of bitcoin?

Nah, I don't think so. There's already tons of custody solutions out there, so that ain't really an issue if you ask me.

82 sats \ 16 replies \ @Scoresby OP 14h

Right, there's so many great wallets and different ways to do it. But it also seems true that self custody is not catching on the same way ETF/treasury company stuff is.

102 sats \ 10 replies \ @kepford 14h

It won't catch on if people don't see the need or desire it. That's the root issue. Not the tech.

0 sats \ 7 replies \ @Scoresby OP 13h

I generally agree: people only make changes to major systems of their lives when they are forced to (ie you get debanked or sanctioned or just lose your saving to inflation).

However, some of these things really are happening. People are buying the ETF and MSTR because they think it will make them rich. Okay, but they conceivably could do the same thing with bitcoin on Coinbase or whatever. Bu t mostly they aren't. So there is some tech issue here.

102 sats \ 6 replies \ @kepford 12h

People are buying the ETF and MSTR because they think it will make them rich. Okay, but they conceivably could do the same thing with bitcoin on Coinbase or whatever. Bu t mostly they aren't.

I disagree with you there. I would separate the ETF and MSTR as far as their general perception out there in the masses that actually actively trade or have retirement accounts. ETFs are a known thing and trusted more than these exchanges like Coinbase. There is far less friction and more of a feeling of familiarity with the tradfi stuff vs. the web stuff(Coinbase).

I think that changes over time. That said, I am pretty sure there are more investor protections and regulations on ETFs and even MSTR that Coinbase. I could be wrong on that but at the least this is the perception.

Most of us are so far removed from this way of thinking that many stackers will start calling me names for even talking like this but I try to listen to tradfi radio and talk to people about things like this who are not bitcoiners. We are on a whole other wave length than normies. Most bitcoiners were already on a different level of thinking before they adopted bitcoin. I know I was. I'd read Ron Paul, Mises, and many others. I was skeptical of Wallstreet and against the FED. The people like that have already been reached. Now its the rest of the world.

I really think we have to push back on this false idea that the masses are gonna become crypto-anarchists. Its never gonna happen. But where I differ from others that believe this... I don't think we need to change bitcoin. Like there's something wrong with it. We don't need to water it down.

47 sats \ 3 replies \ @Scoresby OP 12h

Being able to listen and actually hear the tradfi viewpoint is a huge benefit to Bitcoin land. I am always a little startled when I talk about finance/investing with my friends who are not bitcoiners. You are spot on that we get down in the rabbit hole and forget that it's a pretty niche little world and not everybody thinks like this.

When I've listened to some of the OnRamp folks talk about their products, they say a lot of sane things: self-custody is too scary, unfamiliar for most people in the market right now, certainly a heavy lift for family offices and high net worth types. It's not like they are way off base there (but I do think they are off base when they start acting like giving your bitcoin to some institutions is greater than or equal to self-custody).

But I do wonder what the implications of this kind of thinking are.

this false idea that the masses are gonna become crypto-anarchists

Sure. I see this. What I want to know is 1) does this also mean the masses are never going to self-custody, and if so 2) does this change the security model of bitcoin?

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102 sats \ 0 replies \ @kepford 12h

I know a few people that got into crypto last cycle. Some that bought pretty significant amounts. Not a single one did self custody. Its not even a thought that crosses their minds from what I gather. I offered to help one and he had no interest.

Not because its too hard. Its not like they were trying to do it and were scared. They just didn't care enough to even investigate it. Most people with means or even a decent retirement plan have investment accounts with work. The level of friction to get "crypto exposure" in that known system that they think is pretty secure is near zero.

No way you make anything self-custody like that. Its a dumb target IMO. The tech / apps / hardware will improve but this isn't something wrong with bitcoin IMO.

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0 sats \ 0 replies \ @PictureRoom 8h

Last paragraph. Yes.

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0 sats \ 1 reply \ @PictureRoom 8h

People will need to get burned first. Then they will learn.

0 sats \ 0 replies \ @xz 5h

Let's hope they don't though!

72 sats \ 4 replies \ @0xbitcoiner 14h

Bitcoin's also for folks who don't wanna be their own bank. Everyone just does what they think is best for them. Being sovereign comes with a lot of responsibility, and a lot of people just ain't about that life.

21 sats \ 0 replies \ @kepford 4h

Indeed. The gold standards effects are not well understood by many bitcoiners.

21 sats \ 0 replies \ @PictureRoom 8h

Just ask people "do you love the government? Do you like having them control your money" There will be a common consensus then.

25 sats \ 1 reply \ @Scoresby OP 14h

Is there a threshold number of self-custody bitcoiners below which the system breaks down? Like, if absolutely no individuals hold their own keys, who would prevent some industry group from advocating for protocol changes none of us like?

0 sats \ 0 replies \ @0xbitcoiner 14h

I can't put a number on it. I've heard about this with the BlackRock ETF, though.

212 sats \ 4 replies \ @kepford 14h

What is meant by "mass adoption"? I don't see the masses using self-custody. Most people refuse to manage their passwords in any type of sane way. They are lazy. The reason the ETFs appeal to people is the easy. ETFs are not simple. They are complex. Tons of risk but they are easy. Bitcoin is secure and has so many properties we will need. People do not see the need. They don't understand bitcoin, but they don't even understand that they need it. They will. Its a matter of time. But most are far to lazy to "adopt" bitcoin and they will never adopt it for the reasons most of us have.

That's a pipe dream that needs to be accepted.

46 sats \ 1 reply \ @satgoob 12h

I would say that also we (at least in upper middle class USA) have been conditioned to not feel comfortable with self-custody.

Like I have some amount of bitcoin and a small amount of precious metals, and outside of that, most of my assets are in financial institutions. Before I had bitcoin, basically everything I had of value was in a bank or brokerage account. It's frankly weird as hell being in physical custody of precious metals, especially when I think about / hear about robberies. It's also weird having bitcoin off an exchange - I prefer it, but it's still weird thinking that I could screw up and lose it without insurance or protection. (I'm particularly paranoid I suppose because as a kid I would always lose my coats and stuff somehow, but now I'm a lot more careful)

15 sats \ 0 replies \ @kepford 12h

I would say that also we (at least in upper middle class USA) have been conditioned to not feel comfortable with self-custody.

Yes! I 100% agree. I'd go further. We are conditioned to be weak and largely helpless in many areas. You have to fight against this actively.

21 sats \ 1 reply \ @kepford 14h

There are two things that will drive bitcoin adoption at this point.

Price
Need (shit hits the fan)

0 sats \ 0 replies \ @PictureRoom 8h

Yep

123 sats \ 8 replies \ @Undisciplined 14h

I do think the idea of being that responsible for securing your wealth scares people and the current solutions haven’t been sufficiently soothing.

42 sats \ 2 replies \ @Scoresby OP 13h

There's kind of this fundamental tension isn't there: either our society has to change at some fundamental level (self-custody implies personal responsibility) or bitcoin changes (insured bitcoin, seedless is safer, multi constitutional custody is real bitcoin ownership)...or bitcoin self custody remains niche.

Remaining niche may be okay, but probably not for anything like durable long term censorship resistant bitcoin.

102 sats \ 1 reply \ @Undisciplined 12h

I think it'll just be gradual and we're going to be impatient with the pace.

It takes time for people to become comfortable with new technologies and for entrepreneurs to find the right sales pitches to resonate with different kinds of people.

42 sats \ 0 replies \ @Scoresby OP 12h

fair enough. Just so long as we don't end up thinking self-custody is inevitable.

42 sats \ 4 replies \ @kepford 13h

Things like bitkey are about as simple as I see it getting.

0 sats \ 3 replies \ @Undisciplined 13h

It may be that with more awareness it's good enough for many people to feel comfortable. We'll see.

42 sats \ 2 replies \ @kepford 12h

I mean... I just don't see demand growing. I don't see it this cycle. It was completely different last time. I dont think price has increased enough yet.

0 sats \ 1 reply \ @Undisciplined 12h

We're still crazy early. There's no reason anything in particular should be happening this cycle.

42 sats \ 0 replies \ @kepford 12h

Oh, I agree we are early. The biggest problem I see in bitcoin land is... patience.

I think crypto needs to burn a LOT more people before bitcoin's difference is made clear.

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102 sats \ 2 replies \ @OT 8h

I think some of the hardware wallet Influencer's might scare people one way while the Suits scare them to the other side. Taking a step back, how much Bitcoin is secured by something like Trust wallet or a simple 12 word seed connected to the internet?

50 sats \ 1 reply \ @Scoresby OP 8h

You are probably right.

0 sats \ 0 replies \ @OT 8h

I mean once you're comfortable with something like a passphrase or multisig definitely use it. I probably would be comfortable storing too much on a software wallet, but if it were that easy to steal Bitcoin probably wouldn't have got to where it is today.

102 sats \ 0 replies \ @PictureRoom 8h

That's a bad setup, I wouldn't go running to OnRamp. I do agree with the idea that self custody is keeping adoption from accelerating, but it will happen eventually. People will have to experience some more pain first before they are forced to learn. Goes with anything really; one is forced to learn. Bitcoin is going to do its thing. For as long as we continue to have conversations about it, and also keeping the bitcoin network secure, there's nothing to worry about. Keep learning, keep adding value to the world and don't stop being curious.

102 sats \ 1 reply \ @Car 9h

The models of custody we still rely on were designed when Bitcoin was just hundreds or thousands of dollars. Yet, people were still using those same setups at $10,000,

$50,000, and now $100,000 and above. And now we expect the mainstream to step in and secure meaningful wealth in that same framework?

That’s not realistic. It’s not scalable. And if we’re honest, it’s one of the key reasons mass adoption hasn’t arrived.

Financial literacy is the biggest barrier to learning about Bitcoin.

Everything is easy to use atp.

If people knew what was at stake they would take it seriously like us.

Just based off of the regular people I talk to in my community.

21 sats \ 0 replies \ @Scoresby OP 8h

Yeah, I hope that it is an education issue. That would give me a much more optimistic outlook.

102 sats \ 4 replies \ @justin_shocknet 11h

Self-custody isn't the product-market fit, free banking of something with a fixed, auditable, and easily transactable supply is

Lots of heartbreak and scamming would end if people would just accept this

0 sats \ 3 replies \ @Scoresby OP 11h

How do you see this changing bitcoin's security model?

If there are free banks around the world (why would they need to be geographically located?) possibly they can serve the same purpose as a peer 2 peer node network. But doesn't it seem more likely that such free banks will be under the thumb of whatever state has their internet connection?

102 sats \ 2 replies \ @justin_shocknet 11h

That's still peer to peer, just lots of cope because it doesn't fit people's projection of what a peer is.

The alternative is the fed, which has no peer unless you count other central banks, which are downstream of security zones.

Bitcoin doesn't need a security zone, so it transcends geography like nothing else can. Because of this, its an immovable object that inevitably reshapes the government, unlike gold or fiat which are malleable by the security state.

0 sats \ 1 reply \ @Scoresby OP 8h

Bitcoin doesn't need a security zone, so it transcends geography like nothing else can. Because of this, its an immovable object that inevitably reshapes the government

In the scenario where free banks are custodians for the masses, I am curious how it transcends geography. Won't govts be able to do as they do now and punish their citizens who interact with sanctioned addresses? And how is such a situation different from what we currently have going on with ecash mints?

I'd love to hear a conversation about this between you and Voskuil.

0 sats \ 0 replies \ @justin_shocknet 6h

Before Bitcoin, when could a foreign company provide services to citizens of and against the will of an opposing state, on their soil? It's without precedent.

States level of relaxation, towards anything, isn't out of good will but because it's in a Mexican standoff. Just because they could open Pandora's box doesn't mean it's the best move.

Not sure what you're referring to re: ECash, there's nothing not retarded about ECash generally.

I actually agree with Eric most of the time under a set of assumptions, not sure what conclusions he'd arrive at given some my differing pre-suppositions.

You know I worked for him, sat outside his office when I otherwise should have been in college, way pre-Bitcoin? Unfortunately haven't bumped into him at Bitcoin events yet to catch up.

119 sats \ 1 reply \ @crenshaw 13h

"Self-custody doesn't work... oh btw we just happen to sell something that doesn't require it!"

0 sats \ 0 replies \ @kepford 12h

Its a scam as old as time.

0 sats \ 2 replies \ @BitcoinHandsOn 14h

I think we're far from a world where the majority of people who "own" bitcoin, have it in self custody.

Even people like me - I'm not dumb, and I'm good at research - can have issues with self-custody. Those people that say it's straightforward are either dreaming, or can't put themselves in other people's shoes.

That's why I wrote the book Bitcoin, Hands-On. It's a step by step guide to learning the most necessary technical basics of holding your own bitcoin, one easy exercise at a time.

If anyone wants to take a look at it without purchasing a copy, feel free to email me (feedback@bitcoinhandson.com) and I'll send you a pdf link.

There was also that post just in the past week or so, that was very good - I can't find it now, but it was about - just having POTENTIAL competition prevents monopoly. And the analogy was made with the amount of people doing self-custody bitcoin.

The more there are, the less government will be able to control it.

32 sats \ 1 reply \ @Scoresby OP 13h

What would say is the hardest part about self-custody for someone new to bitcoin? Seed words? Backups? It's scary?

0 sats \ 0 replies \ @BitcoinHandsOn 11h

Every single concept, with self custody bitcoin, is new. From even the idea of digital scarcity, to seed phrases, to the block chain - it's all new. And the explanations/tutorials are out there, but very scattered.
Lots of people - the majority, I think - are just very bad with tech. Even just learning new software is a barrier.

The more convinced you are that bitcoin is the answer, the more you're willing to push through barriers, and self custody bitcoin.

But if you're a lot less convinced, it just seems like far too much work and risk.

0 sats \ 0 replies \ @nichro 6h

This is why I respect and highly support what Bitkey are doing even if I'm not the target demographic.