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

[Kelvinid]

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.

The reason why some crypto investors leave their coins in centralized exchange instead because they are still in doubt if they can make all these responsibilities and take full custody of their own coins. Their knowledge and experiences aren't that extensive enough, however its still not a valid reason to just stick with centralized exchange and leave it there like they really have the full confidence that it will work for long term.

Self-custody is the only key, its just that others do not see its essence or they don't just trust even those hardware wallets.

[Davidvictorson]

Well, from the Reddit post, I would say that everyone is entitled to their own opinions. Self custody is not a must. There are people who prefer to keep their bitcoins in centralized exchanges for whatever reasons best known to them, and that has worked for them so far because despite the whole hacks, there are still some centralized exchanges that have not been hacked. This gives them strong stronger belief in centralized exchanges. On the other hand, there are also proponent of self custody just like you and me and that does not mean that the other person is wrong and we are right it is just about your preference. Self custody comes with a lot of responsibilities, which some folks just do not like to carry. As for us who are proponents of self custody, we must continue to the top of our game with our security.

[Jubilee58]

I know there are still people who are there to deceive Bitcoin investors, and this has started long ago. Some of us the the difference between self custody, and dumping our asset in cryptocurrency exchanges, and in this very forum it is being rang like bell why investors should prioritize self custody instead of exchanges.
Crypto exchanges are not a safe place to store our Bitcoin because of how vulnerable they are to scammers, of recent there were many exchanges that was attacked including binance, and there was huge loss incured, and such attack do go on from time to time.
I equally know that sometimes even cryptocurrencies in self custody wallet can be attacked, but in this case it can be caused by the wallet owner. If you are conscious enough about the safety of your private wallet, you will never yield to the schemes of this online criminals.

There are still safe Bitcoin wallets, and that is because the custodians of those wallets are also safety conscious. However, the safety of your Bitcoin asset is more guaranteed in your hand than in cryptocurrency exchanges.

[promise444c5]

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.

You mean passphrase? Or you forgot to add both password  passphrase, because that’s the right way to put it..

Yes, strong password is good against unauthorized/remote access.. Unauthorized physical access is mostly likely for cold storage setup [ not HW wallet] but it may not fully protect against  physical access attack.

Sure, can’t access the wallet on spot  but they can have a copy which may give them access to the master private and public key, the seed and the passphrase when they finally get through. So password is also important.

[Japinat]

If self-custody has failed, we would have seen silent bitcoin investors crying out loud today because for sure they wouldn't be an exception with the past scammed exchanges that happened. And we might be seeing them today investing from the scratch again after losing all their hard-earned coins in their wallets.

But in reality, those who have been seriously taking full custody of their coins have remained safe and secured until now, and the biggest proof is the Satoshi's wallet itself. Putting it in different wallet locations have also helped a lot too.

[AVE5]

‎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. 

As much as I knows that money or assets is so much valuable, security is what can't be underestimated and to advance on your security affairs, self custodian which gives individuals the full control of their funds is very much necessary to be considered a safe storage system.
In the side of your involvement with Satoshi, I think it's not enough to consider the security of his wallets and bitcoin he hodls as enough reason to trust self custodian.
We can always consider self custodian much concentrated in the approach that you've your private keys and to keep safer, you should use the offline wallet storage to at least avert hacking and online phishing that may compromise your privacy.

[moneystery]

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

I think that not everyone is suitable for self-custody, but saying that self-custody is overrated is pretty wrong. After all, self-custody is the best way to secure your assets, no debating that. But it also comes with the responsibility that users have full responsibility for their assets. That's why before deciding on self-custody, users need to first learn about to secure their private keys, choose the best wallet, use multisig, passphrases, and other security tips. Since the full responsibility lies with the user, they need to take good care of it.
But that doesn't make self-custody that risky. Users just need to understand the principles and be able to apply them. Self custody is actually much safer compared to keeping assets on centralized exchanges that can go bankrupt or get hacked at any time. People should not be mistaken about this and think that self-custody is so bad.

[Lida93]

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.

The responsibility for people to take guard of their own funds has kind of become a heavy load that is stressful to shoulder but they have never for once thought about having to lose that money, how that's gonna affect them. Many people are with half-baked knowledge about how to properly secure their bitcoin investment. And when it's about the decision to whom we reveal about our keys to just for the sake of avoiding losing our investment should something bad happened to us, one thing that is evidently care is that, there's still some kind of risk to who we decide to trust that with too.

[Yamifoud]

The sad thing is that a mistake by one person becomes a failure for everyone.

I've been using Electrum for many years, and my funds are still safe. Whether it's self-custody, an exchange wallet, or any wallet available offline and online, it probably comes down to how the owners manage it.

The hack incident and news about compromised hardware wallets are not enough to think that our safety is over. Unless everyone reported being hacked as well.

[batang_bitcoin]

They're too scared to keep it to themselves, don't listen to these people that are saying that self custody is overrated and trust should go to the exchanges. That's becoming lazy for their own funds but it's associated with risk, they're aware of what they do but they can't blame people who keep on telling them that self custody is better than what they are crusading for. When they have experience it for themselves that their funds are gone through the exchanges it won't be surprising that there will be a change of heart and whatever they have said and classified self custody for will be taken back.

[hd49728]

The sad thing is that a mistake by one person becomes a failure for everyone.

I've been using Electrum for many years, and my funds are still safe. Whether it's self-custody, an exchange wallet, or any wallet available offline and online, it probably comes down to how the owners manage it.

As human, we are prone to mistakes from security to privacy and if we lost our bitcoins, it's our mistakes, not Electrum wallet.

Electrum wallet is a good wallet that has a long history, good reputation, SPV so that it is light in storage, it is available for computers and mobile (Android), and it can be used with Tor, but depends on our practice, our bitcoin will be stored safely or dangerously.

How to Safely Download and Verify Electrum.
The paranoid user's security guide for using Electrum safely.

The hack incident and news about compromised hardware wallets are not enough to think that our safety is over. Unless everyone reported being hacked as well.

It's people practical mistakes if they could not secure their devices, accounts and emails.

[Ever-young]

At this point I don’t even think self custody should be overly emphasized on. Whoever has the knowledge of bitcoin can tell that the exchange is not any better than self custody. Though both has their benefits. But personally, I can never choose comfort over security. Those who chose the exchange should deal with it, because at the end of the day, it’s still their holdings whatever goes wrong, they deal with it.
Sometimes i don’t even see a need for this comparative study between Exchange and self custody, which ever feels right to a Bitcoiner, they can settle for it.

Perhaps there are still individuals that have only heard about self custody but don’t know how to go about it, they don’t even know how to secure their wallets but are interested in bitcoin, this are the majority I expect to see using exchange.

Have tried exchange, and have tried self custody and it happened that self custody happens to be the safe heaven, but you have to learn to secure it before diving in.

Do basically everyone are allowed to choose their path. But I highly recommend self custody.

[m2017]

‎Some bad advise being spread on different social media is just to make people doubt self custody,

There is nothing wrong with having doubts; it prevents you from blindly trusting, for instance, crypto wallet's developers and HW-manufacturers. After the incident with Coldcard, didn’t you start to have doubts about the reliability of such devices?

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. 
‎

1st, we don't know which wallet these assets are stored in. What wallets were even available back then? Bitcoin Core? Electrum?

2nd, these coins might not be "stored" in any wallet at all, as the seed phrase or private key may have been destroyed. It is impossible to steal something that cannot be hacked (because there is nothing to hack).

3rd, there are "threats" other than hacking, such as the loss of access to assets (access keys) by the users themselves, or due to external, unforeseen circumstances (force majeure).

‎Holding your coins in a cold wallet and protecting your key, safely keeping it offline is better than leaving your coins under centralized control.

In my view, neither option is 100% reliable. Each one carries its own risks (drawbacks) that can't be eliminated.

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

There is no single "best" choice. Each storage method has its own advantages. Therefore, rather than agonizing over the dilemma of "which is better", it is best to employ a hybrid approach - utilizing both custodial and non-custodial methods for storing your assets.

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.

I agree with the view that, for the majority of cryptocurrency owners, self-custody is ill-advised - not everyone is capable of shouldering such a level of responsibility for their assets or ensuring an adequate standard of security.

How can you imagine someone who is incapable of taking on any responsibility managing their own assets? Think of those friends or acquaintances who can’t even remember where they tossed their socks the night before, and then can’t find them the next morning. Can you picture such a person independently safeguarding a large sum of cryptocurrency? An owner like that would almost certainly end up losing everything due to their own negligence.

Therefore, entrusting one’s assets (or a portion of them) to professionals capable of maintaining a high level of security is a more reliable approach. Ideally, such a service provider should also be legally obligated to compensate clients in the event of theft or loss (much like in the traditional banking system) and should offer deposit insurance.

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.

I disagree with that. The barrier to entry for using wallets and hardware devices is currently very low - they have been made as simple as possible for users. There are numerous mobile apps available, and using a hardware wallets requires nothing more than pressing a couple of buttons.

Fatal errors stem from a low level of technical literacy among users, who, in most cases, are unable to independently ensure a high level of security for the storage of their assets. The owner of the assets will always remain the most vulnerable link in the chain of secure storage.

Just look at the recent on-chain transaction where a user lost a fortune due to a massive fat-finger error on gas fees.

But this doesn’t make self-custody of assets a bad thing (for everyone), it’s only bad for one specific type of user: idiots. Not everyone is like that, right?

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.

That is partly true. However, recent hacks suggest a somewhat different picture, take the Binance hack, for instance. Yet, even here, the human factor plays a role. And if we look at the FTX case (have they even returned user's assets yet?), the source of the problem for users turned out to be the platform itself, specifically, the incompetence of its management. In other words, asset owners (who were unable to ensure the secure storage of their holdings) handed them over to others who were equally incapable (in this instance, failing to provide "financial" security, given that FTX, as you may recall, went bankrupt).

[Darker45]

I think this is more nuanced than it may seem. But I agree that self-custody per se hasn't failed.

However, does it automatically follow that since Satoshi's coins are in self-custody and remain safe until now, self-custody is also the best option for everybody? Self-custody implies a much greater responsibility than just trusting a custodian, something that many aren't fit to carry. Everything is on you. It may only take one false move on your end and all your money is gone. Being your own bank isn't easy.

Second, let's say you fully committed to self-custody and chose a reputable hardware wallet. Does it automatically follow that you already have full and absolute control over your funds? Given what has been proven in the not-so-distant past, it's possible that products which are supposed to offer you full control of your money actually only provide you partial control.

[Sammye3]

~snip

Not every advise is a good advise, in this case it's more of preference over the actual truth. Self custody would always remain the best for holding assets, what better way is there to hold assets than when you have complete control over it?

But on the long run, everybody is entitled to their opinion and that's undebatable. You cannot completely judge someone for using exchanges and on the other hand, it should not come off as coercion into choosing what a person decides to use.

[The Cryptovator]

‎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.

A few people would take advantage of the hardware wallet’s hacking; they would spread misinformation about the wallet system. Exchange or their representatives will try to encourage investors to keep their funds into centralised exchanges. But I don’t think it’s enough to convince smart investors to keep their funds in exchanges.

It’s always preferable to hold your funds in a non-custodial wallet; it doesn’t matter whether you use a software wallet or a hardware wallet. Just need to make sure the device was purchased from the official sources and hasn’t been tampered. And the most important thing is to secure your seed phrase as well. Then almost we are safe; just check every transaction carefully about the address and fees.

[davis196]

Most crypto supporters don't understand that most hackers use "social engineering" and "phishing" hacks. The hackers simply manipulate some crypto exchange employees to give them access to the hot wallets, which are controlled by the crypto exchange. There are ignorant people, who believe that the hackers use some kind of super advanced software or AI to brute force the seed phrases of cryptocurrency wallets. This is theoretically possible, but it would take a lot of time before such software(or AI tool) gets created. Nothing beats self-custody, but self-custody has weaknesses, especially if the cold wallet owner isn't cautious about his/her online security.

[SatsPH]

Most crypto supporters don't understand that most hackers use "social engineering" and "phishing" hacks. The hackers simply manipulate some crypto exchange employees to give them access to the hot wallets, which are controlled by the crypto exchange. There are ignorant people, who believe that the hackers use some kind of super advanced software or AI to brute force the seed phrases of cryptocurrency wallets. This is theoretically possible, but it would take a lot of time before such software(or AI tool) gets created. Nothing beats self-custody, but self-custody has weaknesses, especially if the cold wallet owner isn't cautious about his/her online security.

They attack the weakest link of the chain, which is human and using social engineering or even 3rd party services, they were able to successful hack Binance and other exchanges. But we still know that self custody didn't fail, if we just know how to practice security and hardened it every time we will hear exploits.

And so with that, Bitcoin enthusiast might be exploring more options, maybe having multi-sig could be one. Or backing up our private keys in a metal plate or maybe create our own Bitcoin address thru dice and cards and obviously, not save everything online.

[5W-KILO]

‎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.

We don't even have to use Satoshi's wallet as an example, there are many Bitcoin whales wallets that remains untouched since the past many years, the method that people choose to use is what will determine how long their coins stays safe.

I have nothing against centralised exchanges since they aren't promoting their business as the safest way to keep Bitcoin and all other crypto currencies safe but the way people thinks at times can be surprising

The fact that centralised exchanges can get hacked isn't the problem here but the fact that they can get hacked and still pay all the lost funds back is what's giving some people confidence.

They failed to reason the keys, who holds them? Not your keys Not your coins, and what makes them believe that the well won't dried up some day? These people are running businesses here too, if the losses is affecting them the can decide to close down at any time without paying a dime.

[Zlantann]

A few people would take advantage of the hardware wallet’s hacking; they would spread misinformation about the wallet system. Exchange or their representatives will try to encourage investors to keep their funds into centralised exchanges. But I don’t think it’s enough to convince smart investors to keep their funds in exchanges.

It’s always preferable to hold your funds in a non-custodial wallet; it doesn’t matter whether you use a software wallet or a hardware wallet. Just need to make sure the device was purchased from the official sources and hasn’t been tampered. And the most important thing is to secure your seed phrase as well. Then almost we are safe; just check every transaction carefully about the address and fees.

Keeping money in centralized wallets defeats the goal of Bitcoin and other decentralized coins. These coins were developed to promote freedom, and keeping them under the control of a third party is like keeping fiat in the bank.

If they want to use the Coldcard hacks as a means of promoting centralized wallets, what is their explanation for the recent Binance hacks? Oh, I know that they would claim that victims would get back their money.

I would always prefer to be fully responsible for my money, no matter how they try to dent the image of self-custody.