Do you really own your money?
Let's first understand "custody".
When you have cash in your wallet, physically with you, you really own the cash. No one else can take it from you - it is yours without a doubt. The cash is self-custodied.
When you have cash in your bank account, the money is custodied by the bank. The banks now own it, it is sitting with them at their vault, and they are giving you access to your money through a cheque book or a debit card.
While legally you own the money in the bank account, that is not technically always the case. The cash that is on the banks balance sheet is their asset, and they can do whatever they want with it - usually, but not limited to, lending it out or creating new money.
Bank failure is not new or uncommon. Hundreds of billions of dollars have been lost all over the world due to banks not being able to match their assets to liabilities. This happens everywhere from the US to Bangladesh.
The Collapse of Lehman Brothers: A Case Study
‘Swimming naked’: Credit Suisse is not the only financial giant facing trouble
Farmers Bank: Dramatic rise in loan default
Even more worrying, are undue control of private enterprises over your hard earned money.
All business accounts were closed by @transferwise today. No warning, no access to funds, instant closure.
Reason: I receive money from companies that deal in cryptocurrencies.@RishiSunak - you want to be the centre for this?
(PS, still off Twitter, for now).— Peter McCormack 🏴☠️ (@PeterMcCormack) April 14, 2022
PayPal in particular has had a long history of freezing people's fund, but nowadays are getting bolder and more judgemental:
PayPal's new acceptable use policy, beginning November 3, 2022, will enable the company to withdraw $2,500 from your account if they find anything you've said to be objectionable, including "misinformation" or "discrimination" of groups or individuals based on gender identity.
— Ian Miles Cheong (@stillgray) October 8, 2022
Governments are no better, whether it is a "free" economy like Canada
Breaking: Democracy has died today in Canada.
Justin Trudeau is authorizing banks to unilaterally freeze accounts of Truckers and people who support the Truckers on the basis of suspicion alone, no court order required, with legal immunity. #CanadaHasFallen pic.twitter.com/ckRwE9RsYi— Terrence K. Williams (@w_terrence) February 15, 2022
or Pakistan
Imran Kahn will lead 1 million people to Islamabad to protest corrupt government & a country on its economic knees.
Remember, the government has stated every single person supporting Kahn will have their bank accounts frozen through their digital ID!
pic.twitter.com/tthwAARHZQ— Bernie's Tweets (@BernieSpofforth) October 8, 2022
But the convenience of using digital money and banks has meant that there has not been any real alternatives. Everyone is trapped in this financial system - and it has been impossible to get out of it, without losing basic modern priviledges.
Until now.
A blockchain wallet is locked using a private key and a public key. A public key is something you can share with anyone - and anyone can send you assets to your wallet mapped to the public key. But only someone with the private key can actually access it.
The magic of cryptography means that anyone can generate a public/private key pair. It all takes place in the blockchain in a decentralized manner, and the keys are secured by the blockchain itself. No central authority (like a bank or a PayPal), will have access to your keys - only you do. Any asset that you have in your wallet, can only be accessed and used by you, the holder of the private key, and no one else.
Through blockchain tech, this means for the first time, you can now truly own (self-custody) your digital assets and currencies, while using them with the same convenience of custodial wallets.
The tech for this goes back all the way to 2008 when Bitcoin was released, promising global payments for everyone. Unfortunately, while the tech has always been there, the user convenience hasn't. Public/private keys are long and cryptic, bitcoin is a volatile asset, and fees are erratic (Lightning network fixes some of the challenges, but using it means you will be using a custodial service).
This has been my inspiration for Wind - an uncensorable Web3 native PayPal/Wise, that can used by anyone.
We are partnering with Web3Auth to make key management simple - where your key is broken down in multiple places and only reconstructed when used by the user. Making it simple and convenient for anyone to access your self-custody wallet without the complexity of managing a cryptographic private key.
Wind will provide the simplest way to use self-custody wallets in the market. Most DeFi wallets today are targeted towards crypto natives, Wind is the first wallet that will really be made for the rest of us - that you can use to send, spend, earn or invest, without the complexity of private/public keys and mnemonics, while fully owning your own keys.
Wind also uses smart contract wallets to do gasless transactions (a topic for another day), stablecoins, and efficient on/off ramps to provide a very web2 user interface on top of web3 tech to become an un-censorable wallet for everyone. No one should have to be at the mercy of private corporations or governments to use their own money. Because Wind is self-custodial, no one can block you from accessing your assets, not even Wind.
Self-custody is a core principle that got me excited about building Wind, and I can't wait to showcase the product we are building in the next couple of months.
Until then, you can sign up at our website to get notified of our updates, at https://wind.app/