A better term to use, when talking about "custodial" and "non-custodial" wallets \ stacker news ~bitcoin

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A better term to use, when talking about "custodial" and "non-custodial" wallets

923 sats \ 8 comments \ @BitcoinHandsOn 3h bitcoin

I've long been frustrated by the terminology related to custody and bitcoin/lightning wallets. Right now, the terminology is :

CURRENT TERMINOLOGY - BAD Custodial - somebody else has custody of your wallet. "Not your keys, not your coins". Non-Custodial - you have custody of your own wallet, i.e. self-custody

But that's really difficult, and also common to misunderstand. I have to think about it myself, whenever I use the term.

That's because it's so backwards. SOMEBODY always has custody of the bitcoin. It just doesn't make sense.

I just saw this alternative on Reddit, on the BitcoinBeginners forum (https://www.reddit.com/r/BitcoinBeginners/comments/1k0h7xa/are_aqua_lightning_wallets_retrievable_by_bip_39/). It seems like a MUCH better option.

"It's much clearer to speak about self-custody vs. delegated custody."

I thought - this is PERFECT! It makes 100% clear, and is easy to understand. So the improved terminology is:

IMPROVED TERMINOLOGY - GOOD Self Custody - you have custody of your bitcoin yourself Delegated Custody - you have delegated custody of your bitcoin to someone else

What do you all think?

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82 sats \ 0 replies \ @DarthCoin 3h

I have another explanation: if is not self-custody is just an account. In order to retrieve the access to those sats you need to login with user/pwd or whatever other method for an account, provided by the owner of the keys.

Bitcoin in self-custody it doesn't use "login" or accounts, it just use wallets, with private keys.

Account = you depend of somebody else to provide the keys Wallet = you manage it yourself, with your own keys

Also there's no such thing as "bitcoin in custody of somebody else"... that is just an IOU. That's why I think is better to refer as "account".

0 sats \ 1 reply \ @ek 2h

To make it even more confusing, let me tell you that non-custodial and self-custodial mean different things as @benthecarman explained in #395522

21 sats \ 0 replies \ @LibertasBR 2h

It really confused me even more. LOL.

I'm going to adopt this change for the good of my head.

32 sats \ 0 replies \ @jakoyoh629 3h

Right, I get the head-scratching, but the truth is, folks just don't know what 'custody' even means. 'Custody' on its own means someone else has the keys to your money. So 'self-custody' is just weird, you know?

Could just be 'your own wallet/self wallet' and 'custody wallet/account'

0 sats \ 0 replies \ @Coinsreporter 23m

Self Custody = Ownership = Wallet (Self Managed/Secret Vault)

Custodial = Delegated = Account. (Same as we all have fiat money in an account not in a wallet)

0 sats \ 0 replies \ @nerd2ninja 1h

I think if we stopped calling bank apps "wallets" everything would be 100% much more clear.

0 sats \ 0 replies \ @zapsammy 1h

relevant notes here: #698574

the way i see it: it is impossible for an individual or a group to own bitcoin, because it's a giant set of distributed bits all over the world, a collective ownership of sorts. what is possible is to possess the private keys or knowledge of where those keys are and how to get to them, or who holds them for u.

what one does with those keys is up to the holder - he can sign a message, move sats from one address to another, lock sats into an LN channel, etc.

0 sats \ 0 replies \ @LibertasBR 2h

This makes it much easier to understand. Self custody is already used and remains the same while delegated custody speaks for itself. I will start using it and explaining in case anyone doesn't understand, the change begins with adoption.

I always get confused with non-custodial and self-custodial, thanks for sharing.