software developer Jameson Lopp believes that improving the usability and user experience of Bitcoin (BTC) self-custody solutions and creating more avenues to acquire BTC will be key to further adoption of the major cryptocurrency.
The Casahodl co-founder, who is a prominent figure in Bitcoin and the broader cryptocurrency space, discussed the challenges of creating self-custody solutions in an exclusive interview with Cointelegraph journalist Joseph Hall ahead of Miami Bitcoin Week.
Lopp has extensive experience as a developer of a number of services and products in the cryptocurrency arena, but in recent years has mainly focused on self-custody of digital assets.. Casahodl offers a range of BTC self-custody solutions and is scheduled to offer Ethereum compatibility in 2023:
“The default route for most people to get into Bitcoin is through centralized exchanges that generally keep an eye on their customers because they are legally required to do so.”
Lopp speculated that users typically buy an initial amount of Bitcoin on an exchange and leave their holdings in the corresponding wallet. He wondered if some users are aware that they can manage their own BTC holdings in a self-custody wallet:
“Even those who understand that self-stewardship is something are afraid to take the responsibility associated with it.”
However, Lopp added that cryptocurrency custodial service providers such as exchanges offer a level of convenience and ease of use through web applications that is easier for newcomers to the industry. The barrier to entry is relatively low, with the only sticking point being the AML and KYC requirements that many internet users are getting used to.
“At the same time, we need to make self-care easier and make people feel comfortable and confident that they can do it without making mistakes.”
Lopp added that creating more onramps for people to acquire Bitcoin and boosting economic activity with the cryptocurrency. He used the decentralized social media platform Nostr as an example of an ecosystem that has integrated Bitcoin’s Lightning layer 2 protocol as a means of driving BTC usage:
“Basically, people can sign up there by simply generating a public key and creating a lightning wallet and they can start receiving and sending without the need for AML or KYC.”
In countries like the UK, Bitcoin advocates and a number of industry leaders created a policy group to encourage education, investment, business and job creation for the ecosystem in April 2023.
Meanwhile, Layer 2 infrastructure providers like Lightning have seen organic growth over the last year, with the amount of BTC locked in Lightning channels steadily increasing.
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