Self-custodial wallets?
Simply generate your addresses off-line and avoid online exchanges.
No need for "wallets".
When I first started using Bitcoin there were MANY MANY things I did not understand and things took years to really become clear to me.
But the thing I understood perfectly from the beginning was the importance and value of self custody. I was playing poker on shady sites that could fold up at the drop of a hat. So I understood that when I deposited my money that it was at risk until I withdrew it. So, naturally I only ever deposited what I intended to play with, and on good days I would still have something left to withdraw when I was ready to hit the sack.
In recent years I began to realize that would not be done by the masses. They will be more comfortable with the custodial relationship with a bank.
I have spend a silly amount of time trying to understand what that might mean for Bitcoin, in adoption as well as as an attack vector on the network.
I am still working it out. But things are becoming more interesting quickly.
I did not foresee the world moving in a way that would FORCE the masses into understanding that self-custody issue that I was taught by a grey hat poker site.
I find this topic more interesting now than ever before.
Surely, you are describing the crux of the issue from your perspective, and even implying that the longer that someone is in bitcoin the more likely s/he will begin to more unambiguously value the powers of holding his/her own keys - while at the same time, maybe there are aspects of the 80/20 rule that still apply that cause a decent number of people to remain lazy, not really understand what they are investing into (if they do choose to invest into bitcoin) and therefore do not exercise the power of the asset that they are holding, bitcoin in this case.
There has always been a cohort of bitcoiners preaching the value of self-custody, but at the same time, recognizing some utility to keep some of your value with third-parties for a variety of reasons. Sure, it could take a while to play out in a way in which people become way more stingy with how many coins that they are going to allow third-parties to hold.. and surely confidence in third-parties could drop further, if it is overall discovered that they are fucking around too much with the BTC supply - so they become a victim of their own sloppy past practices of fractional reserves and even trying to manipulate the BTC price (nakedly) without exposing themselves to the asset.
The seemingly heavy-handed draconian Canadian measures does facilitate more concrete learnings for people about the value of self-custody, but it is not going to stop people from engaging in such practices of leaving some or maybe even all of their coins with third parties --- but those third-parties are going to have to continue to keep selling folks to think in those traditional ways.. and I just do not have faith that they are really going to keep up such deception without ongoingly attempting to provide actual value rather than smoke and mirror values.. and people can likely relate to the fact that they do not want to get their value frozen or taken from them.. so it is a pretty concrete learning point, even though people also do tend to have herd mentality practices too.. that can be taken advantage of.. but just like Gresham's law.. many know about Gresham's law without really being taught about it.. but sometimes it can still take some time to put those principles into practices.. such as keeping a side holding of BTC (exposure) but then realizing that they want more than just exposure (and that is where the power of self-custody intuitively falls into place).
What do you do when you come across the introduction of a newbie into the bitcoin space?
Many of us already know that newbies have tendencies to get mislead into some bad practices such as gambling or the temptations to get rich quick.. so we know that there is a lot of misinformation out there that is waiting to prey upon their inclinations and reservations to get into investing into BTC as an asset.
I am not even saying that everyone has to make the same mistakes that many of us have made along the way.. because there are always some people who catch on way faster than others, once they get the spark. We also know that there is a phenomenon in bitcoin that some of the smart people end up being too smart for their own good, so sometimes it can take a bit of experience before they "get it".
I am pretty sure that I have way less than a 5% success rate in terms of convincing people to get into bitcoin, and my level of trying surely does seem to vary.. even though so frequently, i suggest for the newbie just to get started by getting off zero.. so initially I had been recommending 1% to 10% allocation into bitcoin, even though these days I am describing that newbie entry-level as a 1% to 25% allocation.. but the message remains somewhat the same.. get the fuck off zero.. and some of the aspects of investing into bitcoin should start to make more sense.. but even those kinds of recommendation does not stop so many of the newbies to get distracted into shitcoins, even though you tell them.. don't get distracted into shitcoins.. they do anyhow, largely.. and overwhelmingly.
Another thing that I like to suggest is for the newbie to learn as they go and to take responsibility for their own actions, and i have no problem with third party custody in those very early days of "just getting started."... so in that regard, I will suggest that the newbie figures out their initial investment threshold in which they might buy some kind of third party wallet or figure out ways to engage in self custody.. Maybe somewhere between $1k and $10k.. and sometimes if they might start out by investing whimpily at $10 per week or graduate up to a bit more aggressive at $100 per week, there might be a period in which the value is not really getting close to their threshold.. but they might have to keep in mind that the value could go shooting up too.. so it is no necessarily a bad thing for them to continue to study in to bitcoin while they are DCA'ing into bitcoin.
I agree people are lazy.. and I am partly banking on the fact that as their value goes up, they might get around to figuring out ways to hold their value themselves.. does not always work... so I don't know. Even some of us guys who are more adventurous in moving around our coins.. we ONLY have so many different types of wallets/storage mechanisms that we have practiced with.
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