KEY POINTS
- The report treats custody as a spectrum, not a single choice, with risks at every point on it.
- It estimates that over 3 million bitcoin have been lost to poor key management or exchange failures.
- It says more than $800 billion of bitcoin is in self-custody and over $1 trillion is held across all custody setups.
- It recommends baseline standards for exchanges, such as proof of reserves, and simpler self-custody.
This report looks at where bitcoin is stored: on exchanges, in self-custody and in shared setups. It reviews exchange hacks, bankruptcies and other failures, as well as coins lost to key mismanagement, and estimates how much bitcoin has been permanently lost.
It argues that exchanges should adopt baseline practices such as proof of reserves and full-reserve operation, and that self-custody should become easier for ordinary people. It says self-custody is not yet right for everyone.
For the basics of keys and wallets, see the Learn section once the self-custody course is published.
Summary written by @parachutesBTC. The original belongs to River; read it for the full text, data and sources.