Today I want to share with you this hot news on CryptoSlate
The real advantage of crypto is self-custody, allowing users to control their own assets without being subject to the risks associated with centralized entities, which is the main theme of this post.
Since the SEC approved Bitcoin and Bitcoin ETFs and the House of Representatives passed FIT-21 with bipartisan support, people believe that these are the next step in an ongoing experiment to see if regulation can reduce the risks inherent in crypto and curb the crazy digital asset industry.
The author of this article also said: In essence, encryption may be more secure than the existing financial system, so what do you think?
The concept that stands out here is “custody”, and more specifically “self-custody” – the ability for people to maintain control over their own assets and data during financial transactions, without the need for a third party such as a bank, exchange or network company to mediate.
To be honest, the opinions of most people who follow crypto are likely influenced by catastrophic news such as the FTX crash or BN executive Changpeng Zhao being convicted of money laundering.
However, these scandals have more to do with human nature than with the nature of crypto.
Looking back at the crypto bull run of 2019-2020, developers sought to build sophisticated crypto-powered applications that were simple for newcomers and investors. In many cases, simplicity was achieved by sacrificing self-custody and trusting the responsible management of large centralized exchanges such as FTX.
Consumers were sold on the biggest risks of Web2 fintech and the unsolved problems of Web3. This shortcut approach has led to disaster for companies, investors, and customers.
For example, consider the ongoing case of Synapse Financial Technologies, a non-crypto company whose platform acts as an intermediary that allows fintech companies to offer bank-like services (e.g., checking accounts, credit cards, and debit cards).
Trust and custody issues are at the heart of the bank-as-a-service pioneer’s bankruptcy, which was once touted as at the forefront of fintech and is now teetering between bankruptcy and liquidation. U.S. Bankruptcy Court Judge Martin R. Brash said “tens of millions” of individual “depositors” face losses of “potentially hundreds of millions of dollars,” according to Forbes.
As a developer and former product specialist at companies like Braintree, Venmo, and Paypal, the author of the article has focused on blockchain payments, and what he tells readers is that the real advantage of crypto is that it enables developers to build in a faster and more streamlined way compared to traditional fintech. This is because the underlying blockchain technology has already solved the difficult problems of fintech, such as data security, payment integration, and (as mentioned above) fund custody.
The advantage of the new generation of crypto applications is that it uses new technologies to abstract complex details to provide a user-friendly interface. At the same time, it retains self-custody and is therefore not exposed to the same risks as centralized entities in the previous cycle.
In other words, while public attention has been focused on putting out the fires that were ignited during 2019-2020, crypto infrastructure has matured to the point where we can have the best of both worlds: a friendly Web2 user experience where applications are built by developers who don’t have to worry about custody of user data or funds, making it safer for everyone involved.
This is what makes developers and crypto entrepreneurs excited about digital assets. Crypto is becoming safer, faster, and simpler - ultimately perfecting the experience for the average user. This deliberate invisibility is a key goal at the end of crypto's journey to become a vital part of the mainstream financial system and people's daily lives.
