Many popular key storage systems attempt to bypass the user-experience problems involved with managing keys directly by relying on a trusted third-party organization to hold keys.
It’s easier to make a custodial product. Development costs are lower and timelines are shorter. Centralized key storage also makes it much easier to add features that mimic the existing financial system, which makes it easier to onboard new users.
At Casa, we don’t do this for several reasons.
First, as Nick Szabo once said, “trusted third parties are security holes.” There is a long and dark record of exchange hacks and scams. Even sophisticated and well-funded entities have found themselves victims of malicious actors, both internal and external. Customers of custodial services are also frequent targets of social engineering attacks designed to gain access to their accounts.
A certain big tech company famously had the slogan of “don’t be evil.” For the crypto-asset space, this motto should be “can’t be evil.” The only way to ensure this is by maintaining user sovereignty. The user should be the only one who has control over their funds. It should be impossible for the service provider, through malice or negligence, to unilaterally create transactions or block the creation of transactions.
For Casa, this is a matter of principle. Bitcoin was created to give people control over their money. Individual sovereignty is the idea that brought us into the cryptocurrency space. We make products for the sovereign individual. This is in Casa’s DNA.