This is an opinion editorial by Casey Carrillo, an entrepreneur, author of “Rainmaking Made Simple” and bitcoiner and Casey Carrillo, associate editor of Bitcoin Magazine.
One of the many things that makes bitcoin such an amazing asset is our ability to hold onto our private keys. This capability is so new and unprecedented that the Law Commission of England and Wales has written a 500-page report proposing a new form of property rights for digital assets.
As I reflected on how long it took me to get hold of my private keys, I realized that this might be somewhat instructive to others. Since I’m a boomer and not the least bit tech-savvy or inclined, it took me months to feel comfortable enough to take possession of my personal keys. My thought process – which I suspect is similar to that of many others’ – were I to trust a third party exchange – which is nothing more than an IOU for bitcoin – More Than I had confidence in myself. So my journey began when I bought a small amount of four types of digital assets – one of them bitcoin – in March 2020. I bought that bitcoin on a centralized exchange and didn’t know enough about the private key until then.
As COVID-19 hit and central bank money printing continued at insane levels throughout 2020, I began to wonder and worry about the purchasing power of dollars in my US bank accounts. So I decided to buy more bitcoins in November 2020. It was only at that point, where I went down the proverbial rabbit hole and started learning about bitcoin in particular, that I learned the importance of taking possession of your private keys.
I found the whole thing confusing and intimidating so I took it slowly as there were so many options and so many ways to mess up. Then there was, as it is now, a dizzying array of hardware wallets and software wallets to choose from; Everyone had their own opinion as to which one is best. Also, to back up the wallet or restore the wallet I need to know the etymology path and seed words. None of this sounded familiar and I was probably studying Greek too. I had concluded that I would not move towards having a private key until I felt comfortable. So I kept the bitcoins I bought on two different exchanges until 2021.
It took me till March 2021 to reach there. Yet I got help from a young intern, Kevin, who worked with me for three months and who was also interested in bitcoin – writing his master’s thesis on the risk aspects of actually putting bitcoin on a company’s balance sheet. I ordered a hardware wallet directly from one of the top providers instead of a middleman. And then that friend helped me transfer some of my bitcoins in March. He showed me and an adult of mine how it worked. No one discusses in fine detail (for opsac reasons) the best way to back up a device. This is a completely different article.
OK, so far, so good. I have never felt so comfortable keeping all my bitcoins in one device because it represented a single point of failure so I continued to do my research on Multisig. Further research and reading led me to find two bitcoin-only companies that offer multisig or vault services. CASA and unsolicited capital. It wasn’t until September 2021 that I finally felt ready to pull the trigger and chose one of them to hold my remaining bitcoins in a multisig setup. That was 18 months after I bought my first bitcoin.
I think some of the more tech-savvy and tech-inclined folks in this space forget how intimidating it can be to achieve that level of ownership. Many longtime bitcoiners marvel at how steep the learning curve is to get hold of their keys. The more tech-savvy people see it as a small hill; Those who have little time or desire to educate themselves see it as Mount Everest. Furthermore, it requires taking responsibility for its own finances unlike anything else in history. will do something else never Be prepared for this level of responsibility.
My journey to take possession of my personal keys sparked an interesting conversation with Casey Carrillo on the subject and he has his own journey to share.
As a tech-inclined young person, bitcoin being a fundamentally digital creation was completely normal for me. I guess my custody story isn’t very unique – like Mark Maria, a friend of mine got into bitcoin, but unlike Maria, that was from the moment I was “orange-piled”, and so immediately Made sure I got hold of my private keys.
It was definitely on my phone at the time as a hot wallet. I remember thinking that the way my money would be stored – in essentially 24 words – was risky. My friend explained that if I recorded it on a digital device, I would ruin the security of the seed phrase, as I was (naive at the time for proper security) any Password, Let’s Alone My Seed Phrases) was used to accompany important information. So knowing that it would exist only in the physical realm, and therefore being subject to all the physical dangers of the world, such as a forgotten mind or fire, made me feel uncomfortable.
At the time, I was completely immersed in the “wallet” metaphor, so it was relatively easy for me to understand the difference between a custodial exchange and taking possession of my personal keys, comparing it to receiving cash and then converting it to my physical keys. was made to keep it. purse. As I understood at the time, I was sending my bitcoins to a different destination that could not be touched by the entity from which I bought the bitcoins. I now understand that the specifics of my hot wallet didn’t necessarily mean a “destination” as a signatory, but the metaphor served its purpose at the time. I still believe that the wallet metaphor is effective in describing who has access to the cash in your wallet as opposed to the money in your bank account: it is a difficult thing to describe that difference effectively, even if it is of an actual nature. misrepresents. What we currently refer to as a bitcoin wallet.
Also, it took me several months to move from a hot wallet to a cold storage wallet. It was during that period that I learned about the differences between the two and why it would be necessary to have the seed-production process from an Internet-connected device. All these realizations have only come with an increased understanding of the bitcoin protocol in general. Custody is a parallel journey to understanding bitcoin.
I’d like to believe that, save for high-net-worth individuals, who typically increase research on their wealth storage, the amount of money invested (and therefore if one forgets the seed phrase) Lossable) knowledge is highly correlated with bitcoin. But anecdotally, I have found little correlation: some people take great measures to protect small amounts of bitcoin, and some people have millions of dollars worth on a single exchange. Most likely, this is just a product of early adoption and will change as more people understand the value of bitcoin.
Overall I think many people will relate to some form of assistance when learning about the fundamentally different types of bitcoin custody. In my opinion, this shows how important it is for bitcoiners who understand this to educate others and continue to search for ways to better communicate why self-custody is important.
closing thoughtsWe hope you’ve found our journey instructive and that you’ll find yourself pitching in to Austin@btcmedia.org for an article about your special journey on achieving financial sovereignty and taking possession of your personal keys: invited to submit. how long did it take you Please share your story with us and we will try to work with submissions that our editors think are the most educational and educative, and meet our editorial requirements.
This is a guest post by Mark Maria and Casey Carrillo. The opinions expressed are solely their own and do not necessarily represent those of BTC Inc. either . reflect the thoughts of bitcoin magazine,