The FTX debacle sparked an increase in calls for crypto self-custody this week, including Binance CEO Changpeng Zhao describing it as a “fundamental human right.” However, some warn that there are still risks involved when opting to hold your digital assets on your own.
Vitalik Buterin, co-founder of Ethereum, highlighted on Twitter that while the decentralized finance and self-custody ethos were popular this week, there are still risks involved. According to the Ethereum co-founder, bugs in smart contract code are some of these risks. To avoid them, Buterin also mentioned some tips, such as keeping code simple, audits, formal verification and defense in depth.
Apart from smart contract bugs, transferring crypto assets after death also became a topic on social media. Bruce Fenton, an executive at broker Watchdog Capital, brought up some self-custody tests like asking the next of kin to retrieve one’s coins as if they died. According to Fenton, without a plan for its inheritance, self-custody is incomplete. “It’s a gift to no one,” he argued.
Tom Dunleavy, a research analyst at the crypto data platform Messari, brought demand for self-custody into the conversation. The analyst argued that self-custody is “not desired by 95% of the population.”
Bankless is a meme not a reality
Dad, grandma, and your friend joe don’t to be their own bank
They want some level of safeguards and backup
We need to figure out a way to provide those if we want people to use crypto
— Tom Dunleavy (@dunleavy89) November 11, 2022
According to Dunleavy, onboarding billions of users requires safe, transparent and trustworthy custody work, and he argued that most people want some safeguards and backup.
Related: The FTX contagion: Which companies were affected by the FTX collapse?
As the aftershock of the FTX collapse continues to be felt within the crypto community, rumors surrounding former FTX CEO Sam Bankman-Fried continue to spread. On Twitter, some claim that the embattled executive has filmed a master class on trading that was scheduled to be released in December. Apart from this, anonymous sources say that the authorities are preparing to fly Bankman-Fried to the United States for questioning.
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Tagged: crypto blog, Crypto news, Risks of self-custody