Brainstorm time - how to help normies with self-custody? (5k bounty) \ stacker news ~bitcoin

Brainstorm time - how to help normies with self-custody? (5k bounty)

1204 sats \ 56 comments \ @designsats 29 Nov 2023 bitcoin

Imagine for a moment you are running a custodial wallet. How would you tell your users to take self-custody?

Assume:

they dont know what keys are
they dont understand why to take custody
they dont udnerstand how valuable bitcoin will be one day
they wont read article or watch video, they assume wallet is as secure as Bitcoin itself

You can just tell them "input your onchain address and withdraw". This would innevitably result in loss, or worse - they sent it to Conbase/Binance type shit.

You can teach them how to write down those damn 12 words. But then they lose the seed...

You can do BullBitcoin type of selling support calls and help then 1:1 but this is expensive for many poorer users. ($30 is weekly salary for some). This is hard to scale.

Wyt?

Best idea will get 5k zap from me.

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194 sats \ 11 replies \ @DarthCoin 29 Nov 2023

There's no common rule for everybody. Each individual will have its own capabilities to understand the complexity of being your own bank and manage multiple wallets, types etc.

You have to adapt your teachings to each type of individual. I explained in detail in this guide the 3 levels of stashing. Few people really understand the importance of this method on levels. Because very few understand /know how a bank think and organize their funds.

Being your own bank is a complex task...

Please read and pay attention:

I will repeat it over and over: Bitcoin is not for everybody. Is only for the brave and knowledgeable, for those that will show PROOF OF WORK (aka use their brain)

0 sats \ 10 replies \ @designsats OP 29 Nov 2023

Grey zone in between scares autist like me :) Would you say paying for a 30min. support call would filter out those who dont understand the imporatance of keys and only leave the curious ones to progress to self-custody?

Or should the wallet try to navigate people to their local bitcoin community and let them learn P2P there?

Or should it navigate people to curated list of youtube tutorials in their language?

0 sats \ 9 replies \ @DarthCoin 29 Nov 2023

No, filter them yourself. talk to them first, see their level of intelligence and willing to learn more stuff, new stuff.

For each one, go and present them the path that is easier for them. Don't complicate things more than is necessary because you will lose them.

I have 10 years experience in onboarding and I saw so many dumb people that you can't imagine.

Make your OWN onboarding material for each type of NPC, by levels: dumb, ignorant, curious, advanced, expert.

I wrote several guides, over 60, you could use them all as you want.

0 sats \ 8 replies \ @designsats OP 29 Nov 2023

talk to them first Doesnt scale. Imagine you have thousands of users.

Im looking for automated or semi-automated solution. To notify users if they have amount thats worth to custody (lets say 500k sats) and teach them how to avoid the worst mistakes.

21 sats \ 7 replies \ @DarthCoin 29 Nov 2023

utomated or semi-automated solution

That will never gonna work well. Remember, people are retarded...

0 sats \ 0 replies \ @designsats OP 29 Nov 2023

Something better than this:

0 sats \ 5 replies \ @designsats OP 29 Nov 2023

lets call it Offboarding :)

Its the only way how can a custodial wallet gain respect from bitcoin maxis. I think.

0 sats \ 4 replies \ @DarthCoin 29 Nov 2023

Be the uncle Jim... I wrote so many guides about #330346

0 sats \ 3 replies \ @designsats OP 29 Nov 2023

I am to 3 people now :) Thats about as much it scales. Family.

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5484 sats \ 6 replies \ @supertestnet 29 Nov 2023

I recommend telling them the following things:

What keys are
Why self custody is important
How valuable bitcoin will be one day
Why custodial wallets are insecure

Job done :)

You said they won't read articles or watch videos. I recommend a weekly popup in your custodial wallet containing a statement that reenforces one of the above bullet points at random. The only way to disable the popups is to all funds from in it. (One of the randomly selected popups should tell them this.) If your balance exceeds zero, you get a weekly popup to encourage you to take custody of your money.

1 sat \ 0 replies \ @designsats OP 30 Nov 2023

zappity zap. Bounty earned. Thank you

0 sats \ 3 replies \ @faithandcredit 29 Nov 2023

This is off topic but if Bitcoin isn't important/valuable today why will it be tomorrow™?

100 sats \ 2 replies \ @supertestnet 29 Nov 2023

because the alternatives will be even worse tomorrow than they are today

1 sat \ 1 reply \ @faithandcredit 29 Nov 2023

It's a bet imo, no one actually knows

9 sats \ 0 replies \ @supertestnet 29 Nov 2023

true

the alternatives are also a bet

betting on bitcoin seems wiser to me

0 sats \ 0 replies \ @designsats OP 29 Nov 2023

This is very good. So far best response.

"If your balance exceeds zero, you get a weekly popup to encourage you to take custody of your money." - if it exceed X sats (500k). Creating small UTXO is a future problem.

52 sats \ 0 replies \ @030e0dca83 29 Nov 2023

Per aspera ad astra

Some people should move through the pain. There's no magic words which transform people's mind. Bitcoin is for everyone not for everybody.

The best way - teach people day by day, step by step.

I usually tell people story about my bank than blocked my transaction and didn't want to give my money back in 2008 crisis. Tell them how cool to be the only owner of your money. Tell them why should I store private key, etc. And you know what, they store their sats on Binance.

Maybe a good idea would be to store their sats on my wallet and when they'll be ready give them it back.

p.s. or don't give them it back, so they'll understand why self custody is so cool

31 sats \ 2 replies \ @fm 29 Nov 2023

multi-sig wallet where you keep keys if they lose theirs?

0 sats \ 1 reply \ @designsats OP 29 Nov 2023

that would make it non-custodial wallet.

0 sats \ 0 replies \ @fm 29 Nov 2023

Yes, but would be a good introduction so after a while they could migrate to a non-custodial. Once they are comfortable with keeping keys

21 sats \ 0 replies \ @rafaelasprilla334 30 Nov 2023

I would start by teaching about freedom. Then I associate freedom with bitcoin, then I teach how freedom works and what it is for and how valuable it is.

21 sats \ 1 reply \ @davidw 29 Nov 2023

Digital eyeball scans, of course

0 sats \ 0 replies \ @sama 29 Nov 2023 freebie

I love this. Scan them eyeballs!

121 sats \ 4 replies \ @davidw 29 Nov 2023

Physical NFC gift cards are probably the best solution we’ll have for these next few years at least.

Offline + cheap + reusable + people are conditioned for wallet = money.

When they step their game up, they’ll naturally look at more secure solutions for their growing stack.

The experience…

Pick up NFC card, merchant doesn’t need to deal with KYC - as just a blank card.
User sends or associates sats from Wallet to NFC card and now offline. With some spending protections in place.
It also overcomes the digital/physical distinction, that many noobs struggle with. Having something in cyberspace, is an abstraction even internet natives struggle with.
Card could have an offline mode or physical switch to disable NFC spending if wish. No expensive one-time use steel plates for a tiny stash.

We can all just send loaded cards for Christmas and Birthdays. Slim and perfect UX. No passwords or memory loss. Just keep this card and work out how to spend it in future. People understand something physical.

0 sats \ 3 replies \ @designsats OP 29 Nov 2023

NFC cards are custodial. Furthermore its a pain to distribute them globally. What if user doesnt have postal service? Are hey gonna pay huge DHL delivery?

0 sats \ 2 replies \ @rustaceanrob 29 Nov 2023

Out of the box, I am not sure what you mean by custodial. To my knowledge, Tapsigner is non-custodial and functions with NFC. Can you elaborate?

10 sats \ 0 replies \ @designsats OP 29 Nov 2023

Tapsigner

Doesnt work if user doesnt already have Nunchuck wallet. If they already have it, problem was already solved. You cant generate wallet for the user. Thats trusted setup.

0 sats \ 0 replies \ @designsats OP 29 Nov 2023

Its not a wallet, its just another key. Cool for very advanced user but not my target audience.

21 sats \ 3 replies \ @benthecarman 29 Nov 2023

Given your assumptions they probably shouldn't take self custody of their bitcoin

0 sats \ 2 replies \ @designsats OP 29 Nov 2023

And risking fatal loss?

0 sats \ 1 reply \ @benthecarman 29 Nov 2023

I assume if they don't think bitcoin will valuable they don't own much

0 sats \ 0 replies \ @designsats OP 29 Nov 2023

I saw evidence to the contrary. Merchants with monthly revenue on custodial wallet.

21 sats \ 2 replies \ @kepford 29 Nov 2023

Basically it seems like you are saying. I want people to use my wallet but I'm going to tell them they should use another wallet which can't rug them. Why not move to self-custody product first. How does the business model work if one of your focuses is to talk people out of using your wallet? Maybe I don't understand what you are asking but it seems like bad logic to me. If it isn't your product then my guess is that the product owner will not be open to your goal.

0 sats \ 1 reply \ @designsats OP 29 Nov 2023

Why not move to self-custody product first.
fees and no knowledge of keys

Its not talking people out of the wallet. They would still use the custodial wallet for day-to-day transactions.

21 sats \ 0 replies \ @kepford 29 Nov 2023

Ok. So put up a message that states that. Then point them to one of the many resources for self custody apps. Which is where I think you get into trouble unless you also make one of those. Or, point to learning resources. Many exist.

0 sats \ 1 reply \ @DcaSignals 3 Dec 2023

How about an interactive crash course where they have to write down 3 words. Then 3 weeks later they have to enter the 3 words to unlock a prize. It could be a free course worth $150 sponsored by a hardware wallet or just some sats.

2 of 3 Multisig would be great so they could be guided through the steps over a period of time.

Also you could charge a fee for holdings over a certain amount so that people are pushed to withdraw.

"they dont know what keys are" They don't have to know that, they just have to know that the 12 words are the password to their bitcoin. It is super important to provide backup instruction to prevent scams. On top of the list should be a link and a warning "read these instructions before entering your 12 words" and then a questionaire as "you could be victim of a scam" "who told you to enter your words" etc

"they don't understand why to take custody" they probably also don't want to take custody :D Probably this is the hardest part. How can you convince someone to do something hard when there is an easy and convenient alternative? Maybe an interplay of pointing our dangers "your money is at risk, backup now" followed with positive benefits could work.

Become fully independent, own your money
Social proof: Millions of bitcoin users have already done this before, you can do too
Authority: Experts and celebrities suggest cold storage
Scarcity: you're running out of time, hacks can happen any day
It's easy and doesn't take much time
Become a true bitcoiner
Reciprocity: Make a commitment until the end of the month and you will earn a reward if you withdraw

"They dont udnerstand how valuable bitcoin will be one day" Maybe analogies like one bitcoin one house and some math would help

"they wont read article or watch video, they assume wallet is as secure as Bitcoin itself" The reality is that most people will prefer a bank or service to hold their keys. Just like the majority of people trust the government and inject any "medicine" without asking questions. There is no way to change that, sorry, you can just stay humble and educate.

0 sats \ 0 replies \ @designsats OP 3 Dec 2023

where they have to write down 3 words

How do we know if they did it or not? :)

"2 of 3 Multisig would be great so they could be guided through the steps over a period of time." - who holds those keys?

Yea good points. I know education is key, but how to do it well inside a mobile app, thats difficult.

0 sats \ 0 replies \ @Sasquatch 30 Nov 2023

I have thought about this, and have some family that struggle with this too. They do not custody. I think writing down the seed on the page of a favorite book is one way to go, with obvious risks, and using multisig with a seed going to a trusted third party.

0 sats \ 2 replies \ @garorant 29 Nov 2023

If you are running a custodial wallet and your main objective is Bitcoin adoption and user self-custody, then you are not making your app profitable because people will be leaving your app or using it with less BTC. But I guess it might work, maybe in the long term you will create a good reputation as a simple to use wallet which educate they users with a complete section where explains the keypoints of self-custody. I can imagine an app as simple as wallet of satoshi with a button in the menu with articles about this matter. So it's possible with a good UI.

0 sats \ 1 reply \ @designsats OP 29 Nov 2023

They wouldnt leave it because of incentives of zero/near zero LN transactions and other benefits self-custodial wallet doesnt have.

"using it with less BTC" - good, thats the goal. All savings should be out.

0 sats \ 0 replies \ @garorant 29 Nov 2023

We agree.

0 sats \ 0 replies \ @danieltapa 29 Nov 2023

focus should be on point 3: "they dont understand how valuable bitcoin will be one day"

as long as they think of bitcoin as 'this other risky investment', they will never be interested in the other points..

0 sats \ 0 replies \ @0xbitcoiner 29 Nov 2023

The best way is to make a tutorial in multiple TikToks. They will get it.

0 sats \ 2 replies \ @nullcount 29 Nov 2023

How would you tell your users to take self-custody?

Just explain why you are halting custody service. "We don't want to be responsible for your funds, we don't want to be targets for regulation, we don't want to know anything about our customers, we believe in the mission of BTC to be peer-to-peer cash with no middlemen and we don't want to be your middleman, etc."

This should communicate the drawbacks of using third-party custody. Whether, they decide to send to their own keys or another bank is out of your control and you shouldn't care what they do with it. Absolving yourself of a custodial liability is enough. Communicate that holding their funds is actually a liability for you and maybe they'll second guess who they want to be liable for their funds going forward.

0 sats \ 1 reply \ @designsats OP 29 Nov 2023

Thats Bluewallet-style exit. Lets say I dot want to exit....

But I guess you are right there should be element of scaring them. In a constructive way.

0 sats \ 0 replies \ @nullcount 29 Nov 2023

Lets say I don't want to exit....

Could require (or highly recommend) a 1-time course/quiz before they withdraw for the first time. Some kind of flow that teaches them about the drawbacks of third-party custody and how to self custody simply and safely.

it might be ineffective but it's a touchpoint. Maybe the 5th or 10th time they hear about self custody, they'll start to listen.

At the extreme, you could only allow withdraws to xpubs. Instead of entering an address, you require an xpub and generate unique address for each withdraw. I don't know any custodian that gives you an xpub so you can almost guarantee they withdraw to keys they control. Not the best UX tho...

0 sats \ 1 reply \ @kepford 29 Nov 2023

What is your goal with this? A business? Charity? If the latter just talk to each person. Over time you will maybe be able to come up with some filters that you are asking about. What you are trying to automate is very difficult.

0 sats \ 0 replies \ @designsats OP 29 Nov 2023

Custodial wallets have an reputation issue. Only way to not being labeled as scam or rugpull-waiting-to-happen, is to activelly push and help your (selected) users to custody their own coins. Also - its better for edge cases such as user dying. Removes the huge burden of responsibility from the custodial.

But it has to be done well. Usualy exchange just lets you withdraw and thats it, your problem now. I think it can be done better. For example what BullBitcoin is doing.

0 sats \ 3 replies \ @grayruby 29 Nov 2023

I think the best you can do is force them to provide a btc address and then prompt them when the balance reaches a certain threshold and fees are at a reasonable rate.

50 sats \ 2 replies \ @designsats OP 29 Nov 2023

Yea.....and they send from one custodial walelt to another cos it allows onchain....or to Conbase acc....

0 sats \ 1 reply \ @grayruby 29 Nov 2023

True. If they don't get the idea after you say "you shouldn't hold your bitcoin with us or any other custodian" and provide you with a coinbase wallet address maybe they just aren't going to get it.

Is this a thought experiment or do you actually want to build something that solves the problem?

76 sats \ 0 replies \ @designsats OP 29 Nov 2023

"Is this a thought experiment or do you actually want to build something that solves the problem?" - yes to both

0 sats \ 0 replies \ @02df4abd70 1 Dec 2023 freebie

As a custodial wallet provider, I'd prioritize simplicity and safety. Offering an optional guided process within the wallet interface, utilizing visuals and clear instructions, to securely store their recovery phrase offline could help. Simple, intuitive steps could bridge the gap for those hesitant to engage in more complex security practices.