The inevitability of Bitcoin-centric banking institutions is hard to ignore. Already, a handful of these financial entities have emerged, and more are set to follow suit. Traditional banking institutions are also likely to incorporate Bitcoin services into their offerings. The introduction of new banks built upon Bitcoin is a given at this point. Even with Bitcoin’s scalability issues, people still value services that typically engage third parties, such as debt services.

This is an unalterable reality. Even if we could instantly implement every well-documented opcode and covenant proposal, the creation of self-custodial layers that could rival credit unions and banks offering Bitcoin accounts on a large scale would still demand a significant amount of time. This is not a challenge that can be easily and swiftly overcome.

So what’s our strategy? We must adopt a localist mindset to simplify the process of interacting with Bitcoin. This will require a dual approach comprising technical development and, though it may not be popular to say, advocating for our cause.

Software solutions such as LNDHub or LNBits already exist, which facilitate the provision of custodial accounts for Lightning. We urgently need more software of this kind, and it needs to be exponentially better. It should not require dabbling with the command line or connecting independent software, nor should it necessitate manual installation from Github or troubleshooting dependency inconsistencies.

The software needs to be user-friendly. It should be easily installed, sync to the network, and be ready for use. It should be developed in a way that even less tech-literate power users can operate safely without risking others’ funds. It should support more than just basic Lightning accounts. Features like privacy offered by Ecash would be beneficial for small groups. It should also support self-custodial options similar to Unchained or Nunchuck.

We need software that can take this level of user interaction beyond a limited online community of enthusiasts.

Regulation is another crucial aspect. It should be clearly acknowledged that using this software for small-scale Bitcoin transactions among friends and family, without any cost, should not be subjected to regulation. Assisting friends and family to interact safely and easily with Bitcoin without being considered a bank is essential. It’s unreasonable to expect small-scale transactions to adhere to regulations designed for large-scale banking institutions.

Given Bitcoin’s current limitations and the rapid acceleration of adoption, this is the path forward that will prevent the complete takeover and neutralization by traditional financial institutions. Rather than relying on these entities to deal with Bitcoin’s scalability issues, we should depend on each other.

Please note that this article is an opinion piece. The views expressed are entirely the author’s and not necessarily those of BTC Inc or Bitcoin Magazine.