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Custodial Systems in the Age of the Internet
As society transitioned into the digital age, the custodial model was
adapted to fit the needs of a rapidly expanding online world. Just
as people entrusted banks with their money, they began to trust
centralized institutions with their digital identities and personal
information. The development of user authentication systems, such
as usernames and passwords, further entrenched the custodial model.
These systems were inherently custodial because they placed the responsibility for safeguarding users’ digital identities in the hands of service providers. Users relied on these providers to store their passwords securely, manage their accounts, and protect their data from unauthorized access. This custodial approach to digital identity management mirrored the relationship between banks and their clients, where trust in the institution was paramount.
These systems were inherently custodial because they placed the responsibility for safeguarding users’ digital identities in the hands of service providers. Users relied on these providers to store their passwords securely, manage their accounts, and protect their data from unauthorized access. This custodial approach to digital identity management mirrored the relationship between banks and their clients, where trust in the institution was paramount.