Mark Moss explains why crypto borrowers fear losing their Bitcoin to lenders like Celsius and BlockFi. The real problem: confusion between custody and ownership. New lending structures now separate the two, letting you keep control while borrowing against your coins.
The first thing that people think of is, wow, what about all those people that lost money with Celsius and BlockFi and those types of companies? And you have to understand what actually went wrong there. You see, people want to get a loan against their Bitcoin, but they're afraid to give up control or custody of that Bitcoin because they lost some in Celsius or BlockFi, or they heard, or they know people that did. And so they go, well, I want to get a loan, but do I have to give up custody? I don't want to give up custody of it because I may not get it back. That's actually the right way of thinking about it. But we have to understand that a lot was learned about what happened in the past, right? We've learned from our mistakes, hopefully. Businesses are now set up different. And we have to understand there's a big difference between custody and ownership.
