Demand for Ethereum self-custody solutions is growing, according to Jameson Lopp, Co-founder and CTO of Bitcoin Casa wallet provider. In a conversation with Cointelegraph at Bitcoin 2023, Lopp stated that Casa has been forced to offer support for Ethereum due to the increasing number of Ethereum users requesting the service.
Incidents like the FTX crash in 2022 have raised awareness of the need for a secure way to store Ethereum and Ethereum tokens as stablecoins, Lopp said:
“In fact, I have talked to Casa clients who suffered losses as a result of some of the crashes last year. Those who kept their Bitcoin in Casa did well, but some ended up losing other things, even stablecoins, for example, because they had no way of putting them in a distributed cold storage setup.”
To address this issue, Casa announced in December that it would add support for Ethereum. This decision was “controversial to some,” Lopp said, referring to criticism he received from Bitcoin enthusiasts on social media. However, the company went ahead with the plan because its customers demanded it.
Bigcoin! pic.twitter.com/csoiNaUYup
— Jameson Lopp (@lopp) May 18, 2023
According to Lopp, users still perceive self-monitoring as having a daunting “learning curve.” Although setting up a wallet and sending cryptocurrency to it is easy, practicing proper security habits can be complex, making customers feel self-custody is difficult.
“It certainly can be intimidating if you start looking at all the literature around how to do security,” he said. But “we’re building all of those good practices into the product itself, so that you follow the instructions of our software, and it puts you in a position where […] You can be human, you can make a mistake, and it won’t result in a catastrophic loss.”
Lopp described the Casa service itself as a “extreme security cold storage setup with distributed keys”. It originally targeted “mega-whales” willing to spend $10,000 a year on escrow, but has expanded its offerings to the point where today it even offers a free version with limited features.
The concept of cryptocurrency self-custody began with the first Bitcoin wallet, BitcoinQT, developed by Satoshi himself. However, as the cryptocurrency user base has grown, many new users have preferred to keep their cryptocurrencies under the control of centralized exchanges, despite many experts arguing that this practice is risky. Some wallet providers are trying to solve this problem with new technology that they say will simplify self-custody and attract more users to take control of their crypto assets.
Parts of this article are based on an interview with Jameson Lopp conducted by Sam Bourgi at Bitcoin 2023.
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