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Bitcoin banks are on the horizon, with existing legacy banks starting to offer services and new banks being founded around Bitcoin. Despite Bitcoin’s scalability issues, the demand for services like debt requires the involvement of other parties, making the rise of Bitcoin banks inevitable.
Even with the implementation of various proposals and solutions, developing self-custodial layers that can compete with traditional banks offering Bitcoin accounts will take time. To address this challenge, a localist approach is needed to make interacting with Bitcoin easier. This involves both technical development and lobbying efforts to create user-friendly software that simplifies the process of managing Bitcoin accounts.
Existing software like LNDHub and LNBits allow for custodial accounts for Lightning, but more user-friendly options are needed. The software should be easy to use, support privacy features like ecash, and allow for on-chain self custody. Regulatory carve outs are also necessary to ensure that running this software for friends and family with small amounts of money remains unregulated.
By empowering individuals to help each other navigate the complexities of Bitcoin, we can avoid becoming overly reliant on legacy financial institutions. This approach not only addresses the current limitations of Bitcoin but also fosters a more decentralized and community-driven ecosystem.
The opinions expressed in this article are the author’s own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.