Two-sided coin control

Self custody is an essential requirement when using Bitcoin to fully benefit from all the properties that make Bitcoin valuable in the first place. To be able to truly transact without permission, benefiting from the censorship resistance of the network, you have to control your own keys. You can’t outsource that to someone else, you can’t trust the neutrality or honesty of a custodian, you must solely have direct control of corresponding private keys to your UTXOs. If you fail to do this, you will always be a second class user. Bitcoin as a system gives you almost total control over your own funds; control of custody, when it is spent and how it is spent, even the ability to completely destroy your coins through deleting your private keys.

When you outsource that direct control of the actual Bitcoin UTXOs on the network to a third party, you relinquish that control in its entirety. That’s not to say that there aren’t middle grounds to that, such as Lightning, Statechains, and other proposed second layer designs, but ignoring those for a moment, when you do not control your UTXOs directly, you do not have the ability to transact whenever and however you want. You do not have the ability to destroy and render your coins inaccessible if you want. You do not have something that is permissionless in your ownership and control.