Thanks to Bitcoin, anyone in the world is free to transfer money over a peer-to-peer network without having to go through a financial institution. Money that cannot be censored by authorities, devalued by governments, monopolized by corporations, or stopped by borders.

However, when it comes to trading, going through a trusted third party still remains necessary. Why is that a problem? Because trusted third parties always have been, and continue to be, security holes. Individuals and financial institutions alike rely on trusted third parties such as clearinghouses and exchanges to clear their Bitcoin spot and derivatives transactions. Sound familiar? Yes, that’s exactly what happened during the 2022 contagion event where Celsius, Terra, Three Arrows Capital, BlockFi, Voyager, FTX and many more collapsed. Most of the time, end users, who trusted these third parties, lost everything.

Centralized exchanges are inherently insecure because funds can be pooled together without any oversight. Trading and custody should never, ever be mixed. Looking at the above list of bankruptcies, one may feel helpless and declare Bitcoin trading a no go. Instead, we took a second look and wondered: does Bitcoin trading really need to take place in the books of a trusted third party? Certainly not. And Bitcoin itself provides the solution!

Bitcoin is a complex and dynamic system that has not yet found its equilibrium, and no one can predict the ultimate role it will play. Defining Bitcoin is challenging because it intersects multiple domains. Some view it as a financial asset, others as a currency, a network, or even as an ideological manifesto.