Bitcoin custody options ranked by tradeoff:

1. Exchange custody (Coinbase, Binance)
✅ Easy, instant trades
❌ "Not your keys, not your coins" — you're a creditor of the exchange
Use case: short-term trading only

2. Single-sig hardware wallet
✅ Self-custody, simple
❌ Single point of failure (lost / damaged device + lost seed = lost coins)
Use case: <$10K savings

3. 2-of-3 multisig (Unchained, Sparrow + 3 hardware wallets)
✅ No single point of failure, geographic distribution possible
❌ More setup complexity, transaction signing UX harder
Use case: $10K - $1M+ long-term savings

4. Collaborative custody (Casa, Unchained)
✅ Multisig benefits + recovery service
❌ Trusted third party holds 1 key (can't unilaterally spend)
Use case: when self-managing multisig is too much

5. Vault contracts (covenants — coming with CTV/OP_VAULT)
✅ Programmable spending limits, time delays for theft recovery
❌ Not yet activated on mainnet
Use case: future-state institutional custody

Most failures aren't technical. They're operational: lost seeds, untested recovery, undocumented heir access.

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