> But it's worth getting to the fundamental issue with the right half of this design space: dealing with user errors. By far the most important type of error is: what if a user forgets their password, loses their devices, gets hacked, or otherwise loses access to their account?

> Exchanges can solve this problem: first e-mail recovery, and if even that fails, more complicated forms of recovery through KYC. But to be able to solve such problems, the exchange needs to actually have control over the coins. In order to have the ability to recover user accounts' funds for good reasons, exchanges need to have power that could also be used to steal user accounts' funds for bad reasons. This is an unavoidable tradeoff.

> The ideal long-term solution is to rely on self-custody, in a future where users have easy access to technologies such as multisig and social recovery wallets to help deal with emergency situations.

Not to dismiss this out of hand, but isn’t that the central problem? Users want to use Coinbase for convenience as much as for any other reason.

Saying “we’ll make it easier to host your own coins” is a bit like saying “we’ll solve the #1 problem with mass crypto adoption”.