Mass adoption will never happen with all principles intact

I saw a brief argument with Anatoly Yakovenko on Twitter about this.

One of the core fundamentals/principles that crypto was developed around will never survive on a mass scale: self-custody.

In the discussion, Anatoly commented on how central self-custody is to the mission of what cryptocurrencies aim to do.

I disagree, at least on a population-level scale. Take a wealthy, older person who only deals in fiat currency. They walk into a new bank to deposit a million dollars. They're handed a secret pass code on a sheet of paper that lets them into a vault of cash where their money is located, and they're told "you're the only person with this pass code - if you lose it, no one will ever be able to access your vault again and the money will be lost forever." How long do you think this person would stay a customer at that bank?

I know using a bank isn't the best analogy, but I think that the current margin of error with self-custody is too small for the average person to want to engage with it. A lost seed phrase or accidental transaction going to the wrong address can wipe a large chunk of someone's net worth (or all of it if you're a degen on this sub). There's a reason even seasoned crypto investors will still do a "test transaction" before sending a large sum anywhere.

I think *actual* mass adoption will not include true self-custody. I still think most people will use bank-like entities, be that new "crypto banks" or running everything through an exchange.

If anyone has a real argument against this, or innovative idea that solves this current pitfall, I'd love to see that discussion.

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