Bitcoin Magazine
A Seed Phrase Isn’t Self Custody, It’s A Liability.
For as long as bitcoin has existed, self-custody–the ability to transact with and hold your own wealth without the need for a third party intermediary like a bank or other financial institution–has been central to the offer.
For some, self custody is a firmly-held belief in the right to “be your own bank.” For others, it’s a practical step taken to safeguard a valuable asset that can be–and has been–lost to exchange hacks, mismanagement, or FTX-style collapse. A bit like keeping a safe full of cash at home, if there’s a run on the “bank,” your coins are immune.
And while the “how” of self custody has changed forms throughout bitcoin’s history, today’s de facto industry standard for recovery–the seed phrase–often leaves users at a (sometimes enormous) loss when things go wrong.
A Distinction Without A Difference
In the early days of bitcoin, there was only self c
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