At the MIT Bitcoin Expo 2025, Tadge Dryja warns about the risks of delegated bitcoin custody.
On April 5, during a talk at the MIT Bitcoin Expo 2025, Tadge Dryja, co-inventor of the Lightning Network, addressed several concerns regarding the Bitcoin protocol, particularly highlighting the disparity between the asset’s market capitalization and the low actual on-chain usage.
Dryja stated:
“Bitcoin has a market cap of trillions of dollars—but are people actually using it? Or are they using it the right way?”
Throughout his presentation, the Lightning Network co-inventor reflected on the current state of the network, pointing out that transaction volumes are low and expressing concerns over the lack of a competitive fee market, which is essential for the long-term security of the protocol.
Dryja also declared:
“Bitcoin has value precisely because it works even when it’s illegal—if it only existed with government approval, it would be pointless.”
However, “many companies building on Bitcoin seem to overlook this, focusing instead on regulatory compliance,” Dryja observed, highlighting the contrast between the ideals of open-source development and the corporate interests surrounding the industry.
Not your keys, not your coins
The key concept that emerged from Dryja’s talk is the principle: not your keys, not your coins. Dryja made it clear that, in his view, bitcoins held on exchanges or through ETFs, as well as nodes run via cloud services, do not constitute actual ownership of the asset. He also warned that scenarios similar to Executive Order 6102 could happen again, potentially leading to the confiscation of bitcoins held with third parties.
He stressed that there is nothing in Bitcoin itself that would prevent the issuance of an order similar to Executive Order 6102. In his opinion, if a government were to demand users’ bitcoins from exchanges, the exchanges would hand them over without resistance. For Dryja, Bitcoin’s main advantages over gold lie in its easier self-custody and more discreet handling.
Regarding the self-custody of bitcoin, Dryja stated:
“Running a node is the only way to know that you have bitcoin. If you’re not running a node, you’re trusting someone else to do it for you.”
The Lightning Network co-inventor concluded by mentioning Utreexo, a project aimed at making it easier for anyone to run a Bitcoin node. Utreexo’s goal is to reduce the amount of data needed, speeding up the IBD (Initial Block Download), i.e., the process of initial synchronization with the network.
