Is self-custody the way forward for crypto storage and ownership?
Custodian wallets like FTX, Binance, Coinbase hold on to the private keys of their user’s #crypto assets. Even though less secure, wallets offer users convenience and attractive benefits in return.
These wallets can reinvest user funds without the consent of the user. FTX is probably a great case study. These are also prone to attacks from hackers who target relatively centralized servers for private keys.
Non custodial wallets or self-custody wallets allow the user to hold and manage their private keys. Even though a safer option, managing private keys can be complex and limit their exposure to the evolving #web3 and #decentralized ecosystem.
Trust Wallet is a self custody wallet that seems to be solving a lot of problems with self custody. The owner can use the wallet to leverage the private keys which are stored on the device that runs the application. They offer services from the web3 ecosystem and also allow mechanisms for recovery of private keys.
Trust wallet is owned by Binance and the CEO Changpeng Zhao has publicly endorsed its use. This might be a strong reason to use it or probably a reason to stay far away from it, depending on your experience in the last few months.
Since the FTX saga, Trust wallet’s token, #twt has seen a 150% increase in its price, hmmm…I wonder who is the majority owner of these tokens, Binance ?
Storage of crypto assets seems to be bringing a very fundamental problem to the surface. In the case of traditional Fiat, the banks do the same as FTX did by reusing their users’ funds, but somehow that works for the banking industry. Wait, there is still a difference between the banks and these wallets/exchange houses, regulations !
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