Don't be deceived to think that self custody has failed.

[Mrbluntzy]

‎Some bad advise being spread on different social media is just to make people doubt self custody, but I am making this post to remind you, or so you can also remind the Bitcoiners outside the forum that is beginning to doubt self custody, I want you'll to remember that the wallets that are attributed to Satoshi and are holding lots of Bitcoin has not yet been hacked and the Bitcoins has not been stollen. 
‎
‎There are roughly 1.1 million Bitcoin attributed to Satoshi’s early mining, these Bitcoin are in different wallet and despite all the hacks that is happening, the private key to those wallet have been safely kept offline, destroyed perhaps. 
‎
‎Holding your coins in a cold wallet and protecting your key, safely keeping it offline is better than leaving your coins under centralized control.


Post like this will only convince some greenhorns to believe that centralized custody is the best option.

 https://www.reddit.com/r/Bitcoin/s/jf9yGpmk44

Unpopular Opinion: Self-Custody Is Overrated and Too Risky for Most Crypto Users
I believe keeping cryptocurrency on centralized exchanges is actually a solid choice. The barrier to entry for cold storage and hardware wallets is extremely high, and a single moment of carelessness can leave you vulnerable to hackers or costly mistakes. Just look at the recent on-chain transaction where a user lost a fortune due to a massive fat-finger error on gas fees.
I know the counterargument: people always bring up Mount Gox and early exchange hacks. But much like traditional banks in their early days, exchanges had growing pains. Today’s major platforms are vastly more mature in their asset custody and security infrastructure than they were years ago.

[Merit.s]

Some people are just biased and don't think outside the box or will I say that they don't understand much about bitcoin security and privacy. Exchanges are also victims to hackers which makes it not a good choice because you automatically handed your coins to a third-party and it was still stolen. It's not all exchanges that can make a refund of stolen funds.

Using a cold storage offline wallet like Electrum cold storage with a strong password is enough to keep your coins safe from hackers. You can also use multisig wallet like 2 of 3 multisig wallet. It's our responsibility to become smart as all these hacks played out and improve our wallet security by affording any error that will lead to your wallet being compromised.

[Cryptomultiplier]

Self custody as the name implies has to do with self responsibility for keeping your investment safe. There must be the knowledge necessary to maintain and manage it and stay safe and that's the main point of it. So it involves a learning curve that must be mastered and put into practice and know the right tools to use, else the knowledge is a waste. 
The keys must not be given out to anyone who is not trustworthy and even those trustworthy, care must be taken.

[Joy- maker]

Since the poster said self custody is overrated that keeping Bitcoin in  self custody is risk,  aren't hackers  also targeting centralized exchanges? Just this year, we have witnessed several cryptocurrency exchanges being hacked, and the largest cryptocurrency exchange hack happened a few days ago.

People shouldn't allow themselves to be deceived, self custody is the best option for storing Bitcoin for the long term because it gives you full control over your funds without having to rely on third party to safe guide your Bitcoin.

Centralized exchanges can be compromised and the biggest platforms are not immune to security breaches.  As reputable as Binance is, people expected it to have strong security measures in place to prevent such attack.

The exchange had also experienced security breaches resulting to users funds being stolen,  and it compensated affected users to cover their losses.

[Churchillvv]

Perhaps the centralized exchanges having backup plans incase of scams or hacks have been a solid stand point for a lot of people to move from self custody to having only a number in there wallet with hope that it’s still there while the exchanges uses it or holds it and perhaps decides when you can use it!

Moreover, self custody seem to cost a lot for some and I don’t blame most since they have been used to not holding blames to themselves but moving them to an institution or organization which is why the person who made the post on there is advocating for centralized exchanges.

Self custody will always be a thing if you have yourself an airgapped device and cold storage with zero online engagement but this is a very huge responsibility to many.

[Livingleged]

Some people are just biased and don't think outside the box or will I say that they don't understand much about bitcoin security and privacy. Exchanges are also victims to hackers which makes it not a good choice because you automatically handed your coins to a third-party and it was still stolen. It's not all exchanges that can make a refund of stolen funds.

Using a cold storage offline wallet like Electrum cold storage with a strong password is enough to keep your coins safe from hackers. You can also use multisig wallet like 2 of 3 multisig wallet. It's our responsibility to become smart as all these hacks played out and improve our wallet security by affording any error that will lead to your wallet being compromised.

It’s not like they are biased or something, they practically do not have the exact knowledge of what bitcoin is and it storage perhaps. thats why they go ahead and say things that come to their mind based on certain rational opinions. without stating any convincing fact as to why they are saying those things.
Let take people that used the coldcard incident as a reason to distrust self custody, they failed to understand that the issue wasn’t from bitcoin but the COLDCARD hardware wallet company it self. bitcoin protocol has been safe all this while even when the compromises have been happening we haven’t seen any that was directly linked to any point of failure from bitcoin protocol it self.

[BABY SHOES]

I don't care... people say the self-custody has failed, they see from the point of view of Ledger and Coldcard that recently suffered huge losses and there is no responsibility for it from the manufacturer.

An analysis from @Luke about Coinkite that no clue to fix.
A thread... [1] https://x.com/LukeDashjr/status/2119836060306018364

----------------------------------
Back to the initial statement... we consider others more trusting centralized exchanges because Binance is able to handle all, this trust becomes growing for the layman, it is not a matter of concern for me.

Self-custody, is the best storage despite own responsibility.

[Smartprofit]

Some people are just biased and don't think outside the box or will I say that they don't understand much about bitcoin security and privacy. Exchanges are also victims to hackers which makes it not a good choice because you automatically handed your coins to a third-party and it was still stolen. It's not all exchanges that can make a refund of stolen funds.

Using a cold storage offline wallet like Electrum cold storage with a strong password is enough to keep your coins safe from hackers. You can also use multisig wallet like 2 of 3 multisig wallet. It's our responsibility to become smart as all these hacks played out and improve our wallet security by affording any error that will lead to your wallet being compromised.

It’s not like they are biased or something, they practically do not have the exact knowledge of what bitcoin is and it storage perhaps. thats why they go ahead and say things that come to their mind based on certain rational opinions. without stating any convincing fact as to why they are saying those things.
Let take people that used the coldcard incident as a reason to distrust self custody, they failed to understand that the issue wasn’t from bitcoin but the COLDCARD hardware wallet company it self. bitcoin protocol has been safe all this while even when the compromises have been happening we haven’t seen any that was directly linked to any point of failure from bitcoin protocol it self.

As far as I remember, Bitcoin's code has only been hacked once... That happened in August 2010. A hacker exploited a bug in the code and created over 184 billion Bitcoins. This bug was quickly fixed by Satoshi Nakamoto himself. 🙋

I wouldn't categorically claim that the Bitcoin protocol is completely invulnerable to hacking. For example, respected cryptographer Vitalik Buterin recently noted that the development of AI could lead to revolutionary breakthroughs in mathematics. This, in turn, could theoretically lead to hacking Bitcoin and Ethereum.

In my opinion, the question isn't whether Bitcoin can be hacked. The question is whether we need Bitcoin! If we need it, then even in a critical situation, we can restore the functionality of the Bitcoin network.

However, I absolutely agree with you that all recent hacker attacks were aimed not at Bitcoin itself, but at individual elements of its ecosystem. Bitcoin is too well designed to be easily attacked. It's much easier to attack individual elements of its ecosystem. As for self-storage of Bitcoin, that's the approach taken by those who truly value Bitcoin. Is self-storage 100% secure? Of course not! Security requires a very serious approach. You need to constantly monitor and audit your coin storage system, because one way or another, we interact with the Bitcoin blockchain through software interfaces. And any program can be hacked or otherwise attacked. 🧑‍💻

[MisFoxie]

Don't know why you post it here as i can see it's an old post. I feel bad for those people who believed in that reddit user, Now after binance hack maybe those believers now understand what to trust.

Most users who hold their funds in self-custody and get scammed, probably either had their devices hacked or fallen victim to some kind of scam. There is no point in blaming self-custody for this. I always advice everyone to avoid HW if you can't verify it's authenticity

[Ambatman]

I agree to the original poster to some extent
Self custody isn't for everyone
Yes it has its strengths but there are people that are not ready or willing to take responsibility for their finance
And it would bypass certain risk by using a third party
This doesn't mean I encourage centralization
Just that there are people that know nothing much about security and been cautious.

[BALIK]

I don't care... people say the self-custody has failed, they see from the point of view of Ledger and Coldcard that recently suffered huge losses and there is no responsibility for it from the manufacturer.

An analysis from @Luke about Coinkite that no clue to fix.
A thread... [1] https://x.com/LukeDashjr/status/2119836060306018364

----------------------------------
Back to the initial statement... we consider others more trusting centralized exchanges because Binance is able to handle all, this trust becomes growing for the layman, it is not a matter of concern for me.

Self-custody, is the best storage despite own responsibility.

Self-custody and hardware wallet have never failed.

Those losers failed due to their own carelessness and lack of knowledge regarding security practice. Those losers fall for greed and end up relying on exchanges and third party custodian.

I am sure most of these people go to exchange, lured by the prospect of flexible earn and staking.

They are missing very core philosophy of Bitcoin. When everything is lost due to exchange hack or bankruptcy, they realizes how crucial it was to keep their fund under one's own control. Greed leads to sin and sin to death.

[suzanne5223]

I believe this is something we should expect from some people who are technically among the team of CEX especially those in the marketing profession after the hack wave of some self-custody wallet which only happened through human error or manufacturer issue. But one thing the poster of the link provided in the OP doesn't understand is that CEX are not left out and the danger involved in it is worse which is the reason why I like the comment of the Redditor that said "Nice try, Coinbase." due to the platform reward for users that use them for holding.

Therefore, self-custody is not overrated and I see it as the entire point of Bitcoin. The people saying otherwise are usually the ones who never learned how to do it properly, or they are just irresponsible in the first place.

[ColdLava40]

I know the counterargument: people always bring up Mount Gox and early exchange hacks. But much like traditional banks in their early days, exchanges had growing pains. Today’s major platforms are vastly more mature in their asset custody and security infrastructure than they were years ago.

It's not the first time we are having these kinds of hacks, they happen from time to time.

This shouldn't push our original idea of self custody away. It still remains the best. Having full control of your coins removes more risk than we can think of.

What people should focus on right now is how they can protect their funds more and now thinking of handing it over to third party who cannot even manage their own wallets.

 I'm not saying it's their fault, but for some reasons when you know very well you hold a large amount of coins worth, you should take your security to another level.

[Rockstarguy]

‎Some bad advise being spread on different social media is just to make people doubt self custody, but I am making this post to remind you, or so you can also remind the Bitcoiners outside the forum that is beginning to doubt self custody, I want you'll to remember that the wallets that are attributed to Satoshi and are holding lots of Bitcoin has not yet been hacked and the Bitcoins has not been stollen. 

It is possible for people to be misled about this, but this doesn't change the fact that a non-custodial wallet is the best for investing and holding Bitcoin. Even if people are being misled, it is only a matter of time before they realize which way of storing Bitcoin is the best.

There is nothing to worry about because those who understand why their assets need to be secured won't fall for this ignorance. It is only those who are ignorant of security that normally feel comfortable using an exchange for investment; this is because they do not really understand the risks behind it.

[serjent05]

It was just that person's belief, and it is his right to do whatever he believes.  As for me, I always believe that self-custody is way better than keeping our funds on custodial wallet.  It is really annoying to think that when we have our funds on custodial wallet (exchanges), we are under their mercy to move our own funds.

Others are just too comfortable letting other people/ institution control their cryptocurrency in return for convenience, and are too cowardly to take responsibility for securing their own funds, always looking for someone to blame in case something bad happens.

[EL MOHA]

I agree to the original poster to some extent
Self custody isn't for everyone
Yes it has its strengths but there are people that are not ready or willing to take responsibility for their finance
And it would bypass certain risk by using a third party
This doesn't mean I encourage centralization
Just that there are people that know nothing much about security and been cautious.

I agree with your statement, the statement self custody isn’t for everyone is not a statement that actually means support for centralized exchanges but rather a clear understanding of the situation, you see people going for self custody but they are not ready to take action or steps to protect there wallet. For example some who uses even software wallet do not look to find time to actually verify the authenticity of the application before downloading it and this are basics.

Also even there are reports of wallets not been trust worthy or have great question marks some self custodian hardly try to move away from it until they fall victims of it and a good example of that is the ledger wallet users

[Silverstonez]

The thing is, both self custody wallets and centralized exchanges can be compromised. It is not as if we haven’t witnessed it happen before, just this year Coldcard wallets were reportedly compromised and users lost their funds.

Bitget, Bitmax and Binance have also experienced hacks in which users funds were stolen. In as much as both self custody wallets and centralized exchanges can be compromised, I would still prefer self custody over centralized exchange because, it gives me full control over my funds.

[aoluain]

 https://www.reddit.com/r/Bitcoin/s/jf9yGpmk44

Unpopular Opinion: Self-Custody Is Overrated and Too Risky for Most Crypto Users
I believe keeping cryptocurrency on centralized exchanges is actually a solid choice. The barrier to entry for cold storage and hardware wallets is extremely high, and a single moment of carelessness can leave you vulnerable to hackers or costly mistakes. Just look at the recent on-chain transaction where a user lost a fortune due to a massive fat-finger error on gas fees.
I know the counterargument: people always bring up Mount Gox and early exchange hacks. But much like traditional banks in their early days, exchanges had growing pains. Today’s major platforms are vastly more mature in their asset custody and security infrastructure than they were years ago.

OMG that is a shocking reddit post. Its full of half truths and economy of facts.

I would actually say that is a harmful post which could directly lead to someone losing
their coins.

The facts are that in 99% of cases losing coins from cold and hardware wallets is down
to user error and poor knowledge wheras storing your coins on a centralised exchange
removes your control of your coins, your control of any security.

I like the way the poster didnt reference any modern - AKA 1 week old exchange breach,
"growing pains" my hole!

[Stalker22]

The problem is that people overcomplicate things.  Next time someone tells you that self-custody is too risky or that managing your keys is too complex, just ask: why are Satoshi's coins still sitting there?
Because cold storage works – provided you dont do stupid things with your keys... it is as simple as that.