Self custody or self delusion?
Bitcoin exists to give people financial independence, but many who think they are in control are still trusting a company, an app or a server to let them spend their own bitcoin. That is risk disguised as convenience.
When you buy bitcoin with Lightning Pay you are buying more than sats, you are buying control. But if you do not move it to secure self custody, you are giving up the most important part: your sovereignty.
Are you actually in control?
Simple test: can anyone other than you block, delay or reverse your bitcoin transaction? If the answer is yes, even slightly, you do not have sovereignty.
- Your wallet lets you recover access with email or SMS
- The app requires its server to approve transactions
- Your Lightning balance is held by a provider
- You do not know where your seed phrase or keys are stored
The five levels of bitcoin custody
1. Full custody
A company holds your bitcoin. Risk: extreme. Example: Binance, Coinbase, EasyCrypto.
2. Hidden custody
Wallet looks sovereign but recovery is controlled by a company. Risk: high. Example: some popular mobile wallets.
3. Assisted custody
You hold a key but a company co signs transactions. Risk: medium. Example: Unchained, Casa.
4. Self custody
You hold your own keys and seed phrase. Risk: low. Example: Coldcard, Trezor, BitBox02, Passport.
5. Distributed self custody
Redundant setup that survives loss, failure or death. Risk: very low. Example: Sparrow with multiple hardware wallets and backups.
Your 10 minute path to stronger self custody
- Withdraw from exchanges
- Use a real self custody wallet
- Write your seed phrase on paper or metal, never digital
- Add a passphrase
- Store a backup separately from your device
- Do a test recovery
- Use separate wallets for savings and spending
Recommended tools
Hardware wallets
Self sovereign Lightning wallets
Lightning and self custody
Lightning is not automatically self custodial. Some services hold sats for you, just like exchanges. Lightning Pay is different. We do not hold customer bitcoin. You can withdraw instantly to your own wallet, on chain or over Lightning. Your bitcoin. Your wallet. Your keys.
A last word
We almost got to the end without using the well known bitcoin mantra: not your keys, not your coins. History has proven this many times. People lose access to bitcoin through exchange failures like Mt Gox, FTX, BlockFi, Celsius and even New Zealand’s own Cryptopia.
If you do not control the keys, you do not control the bitcoin.
The good news is that this risk is easy to eliminate. Lightning Pay already supports self custody withdrawals on chain and over Lightning. Your bitcoin does not need to stay on an exchange or with a custodial provider. You can hold it yourself.
Stay sovereign. Use Lightning Pay as your bridge, then move to your own secure wallet setup.
Start buying bitcoin with Lightning Pay