📖 [Analysis] Four Crypto Gospels: [1] Custody - Su Zhu

In this piece, Su Zhu examines the first of his four cryptocurrency "Gospels:" custody, professional funds, regulation clarity, and financialization. Custody is the handing off of digital asset to a third party for safe keeping. The custodian can be charged with a variety of duties from basic key storage to accounting and finance duties. Some new market actors, such as Fidelity and Bakkt, will see custodianship of multiple duties.

In Zhu's eyes, however, custodianship is not only antithetical to two of four of Bitcoin's ($BTC) value propositions--censorship resistant and anti-confiscation--but it has practical problems as well. The only custodian worth trusting is an insured custodian, yet insured custody does not work: it is expensive and not socially scalable. To Zhu, third parties are necessary as not everyone is in the position to hold coins for themselves, though it is far from the best situation.