Self-custody is truly necessary for everyone.

[marrcelo]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

Self-custody gives the user direct control over their Bitcoin, but it also puts all the responsibility on them.

Some people may have difficulties dealing with this. A seed phrase kept in an unsafe place, a compromised computer or phone, a lost backup, or simply a security mistake can be enough to lose all your Bitcoin forever.

Older people, who have difficulties with technology, may have more problems with the wallet and security.

And for someone who has a large amount of Bitcoin, does it really make sense to put everything in self-custody?

Maybe it is better to diversify not only between different forms of custody, but also between Bitcoin, traditional investments and regulated institutions.

[Iranus]

You are right that self-custody is not equally easy or suitable for everyone. But we cannot assume that the phrase regulated institution + court is synonymous with security in the case of Bitcoin.

In self-custody, we have to take key-management risk. And if you keep it in any custodian, you have to take thousand other risks, including counterparty, insolvency, freeze, withdrawal restriction, hacking and institutional failure.

And the risk of losing seed phrase is indeed correct. But this does not mean that you always have to manage your BTC by keeping your seed on your phone. You can prevent your single point of failure with hardware wallet, geographically separated backup, inheritance plan and multisig for large holding.

[Zaguru12]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

Self-custody gives the user direct control over their Bitcoin, but it also puts all the responsibility on them.

To Frank large institutions like ETFs are actually an option but question I usually ask people is that if you cannot handle the responsibility of something you own and hold dear, do you think someone would guide same thing properly than yourself, or do you trust a third party than yourself? If yes then custodial storage is Available as an option.

But get it right, when there is a loss you can sue them but there is no guarantee of you getting back your funds because I have notice it’s on this notion that you see many choosing custodial storage over self custody. You cannot get back your funds easily even if you sue; a clear example is MtGox and FTX, both were hacked and not everyone has been able to recover their funds even after the court ordered them to.

My take is once you store coin in larger institutions you’re no different from someone operating a conventional bank.

I prefer my self custody because I trust myself more than anyone

[coinlary]

Is self-custody really necessary for everyone?

Maybe not for some  due to one or two reasons but it's  generally recommended for everyone to have their Bitcoin(s) in a self custody walllet. If you feel the responsibility is too much and you can't handle it (and that's your own reason) , go for the custodian services (the reputable ones ).

The thing I don't understand with some people is that, you put your password and all the security details to access your account on someone else's computer and you feel comfortable. Having a separate clean PC that basically hold just your wallet is as safe as putting it on an excahnge , the only issue is that it connects to the Internet. Otherwise,  your PC minding its only business of handling your self-custody wallet is generally safe.

Just understand the fact  that your bitcoins aren't  really yours until you withdraw them to a self-custody and if you or anyone have what it takes to charge them to court then good luck with that.

Nothing beats owning the keys.

[Die_empty]

Is self-custody really necessary for everyone?

No, it's not. It's not necessary for slow-witted people who can't understand simple information. Those who are careless and don't want to take responsibility for their actions should also avoid self-custody. If you are comfortable with the government controlling how you use your money and don't care if your bank account is frozen for flimsy reasons, then it's not for you.

How do you think the case will turn out when you sue a centralised platform for loss of funds because you carelessly exposed your bank app password? You think they will compensate you for your carelessness? You assume that centralised platforms are Santa Claus who gives out money for any claim.

You wouldn't understand the benefits of self-custody until you are denied access to your hard-earned money because someone thinks you don't deserve to own such an amount.

[Ruttoshi]

If you want to use both centralized exchange and self custody, it's fine but make sure that you store major part of your bitcoin in your self custody and keep little in an exchange.

There's nothing bad for everyone to start learning more about self custody in order to increase their knowledge on how to improve the security of their wallets. Add passphrase to your seed phrase and make duplicate of both your passphrase and seed phrase. Keep them in different locations far from each other and don't keep your seed phrase in the same place with your passphrase.

[348Judah]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

Going to court when you have a financial issue only exposes you more to the source of your funds, and this couldalso leads to revealing most of your personal information, while in the end it may not yield any better result than going through the hectic procedures of a centralized institution to reclaim your funds.

Consider the hacks that do happen and other losses of assets due to theft and other illicit activities, and see the number of recoveries that are being made back to the rightful owners; I bet you will be highly disappointed because almost everyone doesn't get their lost fortune refunded, despite all the investigations made.

[Accardo]

In the history of saving money, no safer means of self-custody was ever recorded, in elementary class, we were told that our ancestors buried paper money in the ground to keep it safe from thieves, when they go to dig it out, they'll find out that termites have eaten the entire money to pieces, making it hard to spend.

In crypto, we all accepted that cold storage is the best way to escape from hackers, but lately, hackers found their way with Ledger when they passed through Apple store review to upload a malicious or fake ledger software, moving over $9million dollars. Few weeks ago, we all saw a forum announcement about hackers finding a bug in cold card that drained users money. These faults isn't from the users end, they were trying to be careful with storing their btc, but loopholes from the institutions involved in securing their sats cost them their hard earned money.

[Smack That Ace]

Older people, who have difficulties with technology, may have more problems with the wallet and security.

Your "older people" point is very valid. But in this case, giving control of Bitcoin ownership entirely to third party is not solution. imo, your selfcustody architecture can be simplified. So yeah, I agree with you, rather than keeping all your Bitcoin in one place, you can think about diversified custody. Keep some in self-custody, use multisig if necessary, and keep a limited custodial balance for operational liquidity.

And when you say if there is a problem, you can go to court, but for older people, this will be a lot of hassle too. The right to go to court and guarantee of getting your BTC back are not same thing. Bitcoin transaction are irreversible. Court cannot magically return BTC to a custodian that has become insolvent. So being regulated may seem like good risk-control to you at first glance, but it does not mean that there is zero counterparty risk.

[laspol65]

I invest in Bitcoin for the long term, and I only invest as much money as I can afford to lose. That's why I think investing in Bitcoin is less risky, if you plan to invest in Bitcoin for the long term, you will definitely be more risk-free. Because in this situation, you will use a good and secure wallet, and you can store Bitcoin in multiple wallets to protect your privacy.
So your money will be with you and you will own as much Bitcoin as you invest in Bitcoin. If you invest in Bitcoin, keep your wallet's seed phrase safe to keep your wallet safe, then your Bitcoin will be safe.

[Antidote47k]

Both have their own risk, you just have to choose your risk. With self custody, the main risk is key management, if you make a mistake or lose your seed phrase, no one can be able to reverse it for you.
With custodian on the other hand, you have lesser responsibility but have to worry about counterparty risk. You will need to trust the institution to remain liquid, secure and accessible whenever you need.
Which of the two is safer? Self custody most def, unless you’re a nonchalant or careless person. There are pros and cons to both so just choose whichever you’re comfortable with but the community will advise to use self custody as this gives you control over your assets without any third party or promise, but ultimately the decision is yours to make and you’ll have to live with the consequences of that decision if anything goes wrong in the future

[Charles-Tim]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

Exchanges are not yet regulated in a way that you will have small amount of money with them and think of going to court. It is not something that is easy at all. You can not have $50 on an exchange and think of going to court, but you have full control of your coins on a noncustodial wallet.

Also there is nothing better than having full control. It is what I prefer.

Use passphrase and do proper back ups.

[Btcdeybodi]

Why should it be difficult for you to protect what you own by yourself? The problem that most people have is that they always want who to put the blame on, that is why there a lot of court cases because people do not want to take responsibility. You want to keep your assets in the hands of a third party so that if anything happens to it you go to court right? what kind of baiting is that?

Surely, we can't be too careful all the time as regards to keep confidential information that concerns our private keys but it is better we take responsibility of our carelessness instead of looking for who will keep custody of our assets then when it gets lost we start taking legal action against the person or the institution.

Older people, who have difficulties with technology, may have more problems with the wallet and security.

That is why bitcoin is not for everyone, if you are in your old age and you can't make use of modern technology or have someone who you can trust with your assets then its very okay to keep it in the custody of large institutions or the government. Bitcoin is a choice, it is not compulsory that everyone will own bitcoin. Moreover, it is an alternative to fiat so you still have the liberty to choose which of them will be best for you.

And for someone who has a large amount of Bitcoin, does it really make sense to put everything in self-custody?

"Never put all your eggs in one basket". As you are investing in bitcoin, also diversify to other potential investment so that if your wallet get compromised in the future, your world will not crumble because you will have something to fall back to.

Maybe it is better to diversify not only between different forms of custody, but also between Bitcoin, traditional investments and regulated institutions.

Fair enough 

[Sticky Bomb]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

No. Court cannot retrieve your funds if the regulated institution is hacked or files bankruptcy. It could still be a court order to freeze your funds. Nothing beats self-custody

Self-custody gives the user direct control over their Bitcoin, but it also puts all the responsibility on them.

Some people may have difficulties dealing with this. A seed phrase kept in an unsafe place, a compromised computer or phone, a lost backup, or simply a security mistake can be enough to lose all your Bitcoin forever.

People should learn to take responsibilities. This isn't only in Bitcoin, even in banking, if you misplace your card, your funds can be stolen, if they can keep their cards safe, why can't they keep their seed phrases safe offline as well? People are advised to add extra layer of security with passphrase, so that a compromised seed phrase doesn't reveal funds.

Maybe it is better to diversify not only between different forms of custody, but also between Bitcoin, traditional investments and regulated institutions.

Diversification is good, it brings more security of assets. I can agree to Bitcoin and traditional investments like real estate. You should only hold in regulated institutions like CEXs what you can afford to loose. I personally use it to hold funds I'm be needing in a short duration and for liquidation if my Bitcoin.

You can prevent your single point of failure with hardware wallet, geographically separated backup, inheritance plan and multisig for large holding.

I think custom seed extension using a 30 word passphrase comparison of numbers, letters and special characters is better for a single holder since access to the seed phrase alone wouldn't put funds in jeopardy. Multisignature wallets are more applicable to institutions where there's shared custody of finances.

[Tongley]

For a person who has a lot of Bitcoin, using Self-Custody will not be the right decision, but using a Hardware Wallet will be the right decision for him. If a person does not know much about wallets and if he has difficulty in understanding all this, then I will definitely tell that person to use a Hardware Wallet, because it may take him some time to understand and if he gains knowledge, he will be able to learn very easily. But when he does not learn all this, but chooses a risky path, then he can definitely face losses.

Choosing the right wallet by taking some time and doing proper research and gaining knowledge about the wallet is the right decision for a person. No one understands, so he will take this decision, which is not the right decision at all. The pain of a few days can bring the result of 10 years of pain, and if he takes a risky decision for fear of suffering for a few days, then he may face big losses and his financial situation may be in big risk.

[Cookdata]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

Mt gox hack is more than 10 years ago, till now the exchange is still trying to disburse money back to creditors. FTX exchange is yet to pay back half of people that were affected before they went bankrupted, it could take more years before they finalize the distribution, that is if everyone gets their money back. Now tell me, is it worth the wait when you can self custody on your own.

Self-custody gives the user direct control over their Bitcoin, but it also puts all the responsibility on them.

Institutional custody does not gives you any guarantee either, the risk you are running from, they are the ones taking it for you but you can't get access to your asset until you seek for their permission, they can honour it or gives you excuses for not punctual comply to their rules and regulations.

Some people may have difficulties dealing with this. A seed phrase kept in an unsafe place, a compromised computer or phone, a lost backup, or simply a security mistake can be enough to lose all your Bitcoin forever.

This is lame excuse, why will you keep seed phrase in an unsafe place? If you don't compromised your custody, you are not going to have any problem. I don't know how best to describe this your excuse, it's like saying you are warned not to remove your vest because it will affect the temperature of your body but you think anyone that likes their body will remove their vest, come on.

Older people, who have difficulties with technology, may have more problems with the wallet and security.

And for someone who has a large amount of Bitcoin, does it really make sense to put everything in self-custody?

Maybe it is better to diversify not only between different forms of custody, but also between Bitcoin, traditional investments and regulated institutions.

So if older people have difficulty with technology, you think institutional investors are gong to spare them with ease security, these are not excuses. Use a self custody and protect your self. The exchanges are not a place to keep coins.

[TheUltraElite]

Unless you are owning the keys you are not owning the coins.

Its might seem nice that you can go to court and then sue the centralized system for losing your money but those who have been to court a couple of times, will avoid courts altogether. Legalese takes a lot of time to process and ends up being a bigger headache than the original problem itself.

I always say this, bitcoin users have to learn about the methods to keep their coins safe. If they cannot do so they need to avoid bitcoin holding.

If you have big volume of bitcoin in your wallet, better to keep it in your own custody than some third party.

[OcTradism]

Is it better to leave our money in a large regulated institution, where there are rules and, if there is a problem, you can go to court?

It's not about storing and leaving your bitcoin on a third party because it is a large institution. Small or big third party, risk for you is the same: you might lose your bitcoin if anything happens from that third party company which can close their service, scam exit, hack and bankrupt without compensation for customers like you.

Self-custody gives the user direct control over their Bitcoin, but it also puts all the responsibility on them.

And for someone who has a large amount of Bitcoin, does it really make sense to put everything in self-custody?

Only when people already learn enough, practice enough from Bitcoin test net to Bitcoin main net with small fund for testing their knowledge and practice, until a time they already master steps for doing them properly, precisely and safely. Because with Bitcoin, if you are self custodian but make mistakes somehow, nobody can save you.

How to back up a seed phrase?
Basically beginners can start with that and don't need to go with too complicated things but later they can check
Security and Privacy Encylopedia.

Maybe it is better to diversify not only between different forms of custody, but also between Bitcoin, traditional investments and regulated institutions.

It's about financial management and here I think it's best to talk about your Bitcoin investment and Bitcoin management from buying, backup, storage to selling for profit in the future securely.

[Maslate]

They always say "not your keys, not your coins," and yes, self-custody is probably the best way to keep your Bitcoin, but it's not really for everyone because there are people who don't fully understand how to secure it properly and they might just end up losing everything.

So there's always another option, keeping your Bitcoin on an exchange. Some people will disagree with that, but there are also some positive sides, especially if regulations on exchanges continue to improve, maybe eventually we'll see stronger protections similar to what banks have.

As long as you take care of your account properly with 2FA and other security measures, and you're using a reputable exchange, the risk can be reduced a lot. Regulation is also getting tighter, governments already know these companies and can go after them if they don't follow the rules.

[SPIDERMAN008]

If you want freedom, you have to take responsibility for protecting it. Bitcoin gives people financial freedom. Where as if you keep assets in a bank or other financial company as an institution, you do not have control over it. You may not be able to use it freely all the time. You have full control over BTC . When you own something completely and no third party can even know about it, then you have to take responsibility for that asset.

And I do not give much importance to the age of a person here. In the future, those who will come to know about Bitcoin or think about holding Bitcoin, then no matter what age of that person is, he will hold Bitcoin with the right idea about the security of Bitcoin. And even then, if a person realizes that he cannot keep Bitcoin safe enough, then he dose not have to hold bitcoin.

And the person who hold BTC must be responsible and maintain strong self-custody according to the amount of Bitcoin holding . Only then can he keep Bitcoin properly safe.