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American computer scientist and legal scholar Nick Szabo has<a href="https://x.com/NickSzabo4/status/1997515592547393666" rel="noopener noreferrer nofollow">opined</a> that Bitcoin should be treated as a "trust-minimized insurance."
"The wisest of all will self-custody Bitcoin, the actual trust-minimized asset, as insurance against the most extreme outcomes, which any serious student of economic history knows have a far from zero probability," he said.
Unlike banks, custodians or governments, Bitcoin does not require you to trust a third party. If you self-custody your Bitcoin, no one can seize or inflate it. Fiat money (like USD, EUR) can be diluted through inflation or government debt issuance.
Bitcoin acts as a form of protection against extreme economic scenarios.
<h2 id="two-schools">Two schools</h2>
Szabo has responded to Fred Krueger’s framing of Bitcoin futures as two schools.
The "dark side" school sees Bitcoin being co-opted, stolen or heavily controlled. Users cannot trust institutions or wrapped solutions.
Within the "Joe" school, Bitcoin becomes high-powered money integrated into the banking system. Custody solutions, wrapped tokens and credit instruments will exist. Trust-minimization is maintained through careful design.
Szabo identifies with the "Joe" school, but he is still advocating for self-custody as the ultimate trust-minimized insurance.
Even if banks and credit instruments adopt Bitcoin, the most prudent approach is to hold some personally.
Under this hybrid model, institutions add low-dilution Bitcoin to portfolios as a hedge against inevitable fiat debt dilution driven by demographics, while individuals self-custody it for insurance against hyperinflation or systemic collapse. <a href="https://u.today/bitcoin-is-trust-minimized-insurance-szabo-says" rel="noopener noreferrer nofollow">Read original article on U.Today</a>

'Bitcoin Is Trust-Minimized Insurance,' Szabo Says

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