A counterargument against pushing for greater scalability with Bitcoin is that “most people aren’t going to self-custody anyway, so why bother?”
This is a tremendously presumptive, arrogant and openly fallacious argument. It is the same type of logical fallacy that human beings cannot help but commit. The current state of the present is an indicator of what the state of the future will be.
“It’s not raining today, so it won’t rain tomorrow.” It’s exactly the kind of thinking that led Bitcoiners during the last market cycle to assume that we would reach $100-200k at most at that time. That assumption was brutally destroyed by a double top of 69k, just ~3.5 times the previous all-time high.
The very nature of the digital age we live in and the numerous radical transformations we have all seen in short periods of time during our lives should shake people from their assumptions that the present is a demonstration of the nature of the future, but For many people it is not like that.
First of all, many people currently do not custody their own coins. I don’t even understand the distinction between self-custody and your coins on Coinbase.. For many unsophisticated users, they are all just apps that hold their bitcoins. I’ve encountered this misconception more times than I can count in my time in this space interacting with new users. These users have not even been aware of this possibility yet, ruling them out is simply absurd and presumptuous.
Second, users who choose not to have self-custody at this time generally do not do so for fear of losing their keys. It’s not fear of “responsibility.” It is the fear that they will not be able to adequately handle redundancy in their key management and that they will lose everything they have invested due to incompetence, legitimate errors or freak accidents.
This isn’t 2013 anymore. People no longer back up individual private keys to a digital file. Key management schemes have come a long way since then. Mnemonic seeds, multi-signature wallets, etc. There are even basic vaults that use pre-signed transactions, although they are not widely used. There are tools to make self-custody available in ways that offer protection and help in case of errors and the need to recover coins for which the keys have been lost.
Unchained exists. The house exists. The nunchuck exists. Bitkey exists. All of these tools will get even better as time goes on. By adopting Schnorr and Taproot, these recovery-friendly self-custody schemes can blind third-party servers, so that during signing and normal use, these services don’t even learn anything about the coins users hold or the transactions they they sign jointly. Taproot allows wallets to delegate emergency recovery keys to friends or family without them knowing anything about those coins unless they are needed.
The tools around self-custody are advancing and people’s attitudes around self-custody will change along with those huge advances in technology. Dismissing the need for scalability because people have reasons not to right now is pure arrogance.
It’s nothing more than the attitude of “I have mine, so screw everyone else.” Just because the current state of the world is a certain way does not guarantee that it will be that way in the future. Only the arrogant assume it that way.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
