This is an opinion piece by Mark Maraia, an entrepreneur, author of “Rainmaking Made Simple” and Bitcoiner, and Casey Carrillo, associate editor at Bitcoin Magazine.
One of the things that makes bitcoin such a great asset is our ability to own our private keys. This possibility is so new and groundbreaking that the Law Commission of England and Wales wrote 500 page report proposed to create a new form of property rights for digital assets.
As I reflect on how long it has taken me to get my private keys, I realize that it can be a bit instructive for others. Since I’m a boomer and I’m not the least savvy or tech-savvy person, it took me months before I felt comfortable enough to own my private keys. My thought process – which I suspect is the same as many others – is that I trusted a third party exchange – nothing more than an IOU for bitcoin – than than I believed in myself. So my journey started when I bought a small amount of four digital assets – one of which is bitcoin – in March 2020. I bought that bitcoin on a centralized exchange and recovered. That I don’t know enough about private keys.
As COVID-19 kicks in and central bank money printing continues at an insane rate in 2020, I’m starting to wonder and worry about the purchasing power of the dollar in my US bank account. So I decided to buy more bitcoin in November 2020. It was only at that point, when I was diving into the hole and starting to learn about bitcoin on my own, that I realized the importance of owning the keys. myselft.
I found the whole thing confusing and scary so I took it slow because there were so many options and so many ways to mess things up. Then, as now, there is a wide range of hardware wallets and software wallets to choose from; Everyone has their own opinion on which one is best. Also, backing up a wallet or restoring a wallet requires me to know about derivations and seed words. None of that is familiar and I may well have read Greek. I’ve concluded that I’m not going to rush into keeping private keys until I’m comfortable. So I kept the bitcoins I bought on two different exchanges until 2021.
It took me until March 2021 to get there. Even then I got help from a young intern, Kevin, who worked with me for three months and who was also interested in bitcoin – he was actually writing his master’s thesis. about the risk aspects of putting bitcoin on a company’s balance sheet. I ordered a hardware wallet directly from one of the leading vendors instead of going through a middleman. And then that friend helped me transfer some of my bitcoins in March. He showed me and one of my adult children how it works. What no one discussed in detail (for opsec reasons) is the best way to back up the device. It’s a completely separate article.
Okay, so far, so good. I have never felt so comfortable having the power to manage all my bitcoins in one device as it represents a single point of failure so I continue to research multisig. Further research and reading led me to find two bitcoin-only companies that offer multisig or vault services. Casa and Non-immigrant Capital. It wasn’t until September 2021 when I finally felt ready to activate and choose one of them to keep the rest of my bitcoins in a multisig setup. It was 18 months after my first bitcoin purchase.
What I think some of the more tech-savvy and more tech-savvy people in this space forget is how terrifying that level of ownership can be. Many longtime bitcoin traders consider how steep the learning curve is to get hold of their keys. Those who are more tech-savvy see it as a small hill; Those who have little time or desire to educate themselves see it as Mount Everest. Plus, it requires you to take charge of your own finances, unlike anything in history. And some will never ready for this level of responsibility.
My journey into private key possession led to an interesting conversation with Casey Carrillo on the subject, and he has his own journey to share.
As a tech-savvy young person, Bitcoin being an original digital construct is completely normal for me. I think my custody story is not so unique – like Mark Maraia, I had a friend who held my access to Bitcoin but unlike Maraia, he was right there. since I “got orange”, and so was immediately certain that I was in possession of my private keys.
Of course, at the time, it was in the form of a hot wallet on my phone. I recall that storing my assets – in 24 words, basically – was very risky. My friend explained that I would destroy the security of the seed phrase if I recorded it on a digital device, because I was (at that time naive about the proper security of not at all password, let alone my seed phrase) was used to do with important information. So knowing that this would only exist in the physical realm, and therefore subject to all the physical perils of the world like absent-minded mind or fire, made me feel insecure.
At that time, I was completely immersed in “purseMetaphor, so it is relatively easy for me to understand the difference between a custody exchange and owning my private keys, likening it to buying cash and then keeping it in my physical wallet. As I understood at the time, I am sending my bitcoins to another destination, a destination that cannot be reached by the entity I purchased the bitcoins from. I now understand the nuances of my hot wallet not necessarily being a “destination” as much as a signer, but at the time the metaphor serves its purpose. I still believe the example metaphor is effective in describing who has access to the cash in your wallet instead of the money in your bank account: it’s hard to describe that difference as effectively as similar permission, even if it misrepresents the actual nature of what we now call a bitcoin wallet.
That aside, it took me a few more months to switch from a hot wallet to a cold wallet. During that time, I learned about the difference between the two and why it is necessary to let seeding happen on an internet-connected device. All of these realizations come only with an advanced understanding of the Bitcoin protocol in general. Custody is a parallel journey to understanding Bitcoin.
I like to believe, savings for high net worth individuals who often conduct incremental research on their stock of assets, the amount invested (and therefore can be lost if a forgotten seed phrase, etc) is highly correlated with knowledge of Bitcoin. But anecdotally, I have found very little correlation: some people take great measures to protect their meager bitcoins, and some have millions of dollars worth on a single exchange. . Chances are, this is just a product of early adoption and will change as the value of bitcoin is understood by more people.
Overall, I think many people will relate to having some form of help when initially learning about the different types of bitcoin custody. In my view, this shows how important it is for Bitcoiners who understand this to educate others and continue to try to discover ways to better communicate why self-governance important again.
End of thinking: We hope you found our journey instructive and invite you to submit a presentation on your specific journey towards financial sovereignty and owning your private keys to Austin@btcmedia .org. how long did it take? Please feel free to share your story with us and we will seek to work on submissions that our editors feel are the most educational and instructive, and meet the requirements of the post. our editorial request.
This is a post by Mark Maraia and Casey Carrillo. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.