The dominance of custodial systems in both finance and digital identity began to be challenged in 2008 with the publication of a whitepaper titled ”Bitcoin: A Peer-to-Peer Electronic Cash System” by the pseudonymous figure Satoshi Nakamoto. This document outlined a revolutionary new form of currency—Bitcoin—that was decentralized, meaning it did not require a trusted intermediary like a bank to facilitate transactions. Instead, Bitcoin relied on a Distributed Ledger Technology (DLT) known as blockchain, where all transactions were recorded on a public ledger accessible to anyone.

Bitcoin was officially launched on January 3, 2009, when Nakamoto mined the first block, known as the ”Genesis Block,” of the Bitcoin blockchain. This event marked the beginning of the first truly decentralized digital currency and introduced the concept of self-custody in the digital realm.

At the core of Bitcoin’s design was the principle of self-custody. Unlike traditional banking systems, where a third party held and managed your assets, Bitcoin allowed individuals to hold and control their own private keys—the cryptographic codes that grant access to their Bitcoin. With this power came responsibility: losing the private key meant losing access to the Bitcoin permanently, a stark contrast to the recoverable nature of assets in custodial systems.