The importance of Self-Custody for personal information varies among individuals, groups and communities and this influences the software they use and what part of the political spectrum they vote for. Striking a balance between convenience and control is essential, and individuals should assess their own comfort levels with technology, the importance of privacy, and the trade-offs they are willing to make in terms of convenience versus control.
Self-custody for various types of personal information, such as email, messaging, passwords, notes, money, and personal budgets, is crucial for several reasons:
Self-custody can enhance the security of your assets. This is why banks manage their own hardware and software internally.
In crypto-currency terms – by holding your private keys and managing your own wallets, you reduce the risk of third-party breaches or hacks that could compromise your funds.
But this also introduce the risk of losing your money – by forgetting the passwords and places you hold your savings. With Great power comes great responsibility.
Self-custody provides you with greater control over your assets. You can decide when and how to transfer, trade, or sell your financial tokens – without relying on the policies or limitations imposed by a third party. Revolut, PayPal, Banks are third party. Exchanges are third party.
Customization and Flexibility
Self-custody allows you to tailor your tools and solutions to your specific needs. You can choose the software, encryption methods, and storage options that align with your preferences and security requirements. This comes at a cost. The more data you have – the more storage you need to buy – multiplied by 2 or 3 – for backups.
When you self-custody your information, you maintain ownership and control over it. This contrasts with using third-party platforms, where your data is often subject to the terms and conditions of the service provider. Besides that – you could never know – to whom the service provider shows your data.
With greater control comes greater responsibility. If you lose access to your private keys or make a mistake in managing your wallet, there may be no recourse, and you could lose your assets permanently. Nobody will have the power to save you. Self responsibility is great goal to archive, but it takes courage, knowledge, skills.
Self-custody can contribute to better privacy as your transactions and holdings are not exposed to third-party platforms. This is particularly important for individuals who investigate crimes and corruption. Otherwise – for normal people – it may be their desire – their data to not be used by big corporations to make money.
Self-custody aligns with the decentralized ethos of many blockchain and cryptocurrency projects. It avoids concentration of power in centralized exchanges or financial institutions. This means ETF is actually bad for the ideals of Bitcoin.
The Decentralization of self-custody reduces dependency on single entities for managing your personal information. This helps prevent scenarios where a single breach could compromise millions of people and multiple aspects of the life of whole populations.
When you use third-party custodial services, you are exposed to counterparty risk. Self-custody mitigates this risk, as you are not relying on the financial stability or security measures of an external entity. With self-custody, you are less vulnerable to changes in terms of service, discontinuation of services, or sudden alterations in privacy policies that might impact your access to and control over your data.
Avoidance of Vendor Lock-in
For Software Development – Relying on third-party services may lead to vendor lock-in, making it challenging to migrate your data if you decide to switch to a different service. Self-custody allows you to transform and move your data more freely between different tools and platforms.
In political terms – if you are dependent from a single entity – you are slave to their will. There are so much niches that this goes in non-software terms – food, energy, money, political, business and media influence…
User Experience and Expertise
However, self-custody also presents challenges, particularly in terms of convenience and technical proficiency:
Managing your own data often requires a certain level of technical expertise. Some individuals may find it challenging to set up and maintain self-hosted solutions. I’ve recently tried to self-host Firefox Sync Server. It was technical pain and at the end I’ve abondoned it.
Third-party services often provide a convenient, user-friendly experience. Self-custody may require more effort and time, and some users prioritize convenience over the advantages of having full control. Some users may prefer the convenience of using custodial services, even with the associated risks. Custodial platforms often provide user-friendly interfaces and additional services like customer support.
In terms of Software Development – it may be better to use third-party, because this lifts the amount of work you need to complete yourself. This is ideal for start-ups.
In non-software area – this means getting into creation of electricity, grow your own food, produce something of value and find market for it. It is not so easy. This is why so many fail.
Managing private keys and wallets requires a certain level of technical proficiency. Individuals less familiar with the technical aspects of software may find it challenging. This is especially true for the blockchain technology. And for any other type of information – you must make backups. This is something that I’ve experienced personally. If you do not have some data in 3 places – you don’t have it. Hardware fails.
Ultimately, the importance of self-custody goes beyond software and the virtual world. I’ve described it in the past – in Bulgarian – abount the layers of reality. One must be self-sovereign in:
- practice, hardware, physical world. This is about food, health, energy etc
- financial – to not depend on external voices (VC money etc)
- legal – do you legally own the thing.
- media – standard or social, web site or email
- do you control your own subjective reality?