Two Bitcoiners share their custody story and invite others to consider their steps in claiming their sovereignty.
This opinion editorial is by Mark Maraia (entrepreneur, author of Rainmaking Made Simple and Bitcoiner) and Casey Carrillo (associate editor at Bitcoin Magazine).
Our ability to control our private keys is one of the many reasons bitcoin is such an incredible asset. This is a groundbreaking and new ability that has led to the Law Commission of England and Wales writing a 500-page report proposing a new type of property right for digital assets.
It was interesting to me that it took me so long to get my private keys back. It took me several months to feel comfortable enough with my private keys, even though I am a boomer. My thinking process, which I suspect is similar among many others' was that I trusted third-party exchanges — which are nothing more than IOUs for bitcoin — more then I trusted myself. My journey started in March 2020 when I purchased a small amount (one of which was bitcoin) of four types of digital assets. I purchased that bitcoin via a centralized exchange, and didn't have enough knowledge back then about private keys.
COVID-19 continued to wear on, and central bank money printing continued at crazy levels throughout 2020. I started to worry and wonder about the buying power of dollars in my U.S. account. So, I decided to purchase more bitcoin in November 2020. Only at this point did I realize the importance of obtaining your private keys.
The whole process was confusing and overwhelming for me so I tried to take it slow because there were too many options and too many ways I could make mistakes. As there was back then, so is the present dizzying array hardware and software wallets. Everyone had their own opinions about which one is best. I also had to be familiar with derivation paths, seed words, and how to back up the wallet. It was all new to me and I could have easily been learning Greek. I decided that I would not rush to hold private keys and I will wait until I feel comfortable. I kept the bitcoin that I bought on two exchanges until 2021.
To get there, it took me until March 2021. Kevin, a young intern who had worked with me for three month, was also interested and able to help me. He was actually writing his masters thesis about the risks of bitcoin being added to a company's balance sheets. I purchased a hardware wallet directly through one of the top providers, rather than through a middleman. The friend also helped me transfer some bitcoin to my account in March. He explained it to me and one my adult children. The best way to backup the device is what no one talks about in detail (for opsec purposes). This is a separate article.
Okay, so far, so good. Since it was a single point for failure, I didn't feel all that comfortable having all my bitcoin in one place so I did more research on multisig. I was able to locate two companies that offer vault or multisig services through further research. Casa and Unchained Capital. It was September 2021 that I felt ready to pull my trigger. I chose one of them to keep the remaining bitcoin in a multisig setup. This was 18 months after I bought my first bitcoin.
It can be daunting to attain that level of ownership, even for the most tech-savvy and tech-inclined people working in this space. Long-term bitcoiners often take it for granted the steep learning curve involved in obtaining their keys. It is a small hill for those with more technical knowledge. For those with less time or the desire to learn, it is Mt. Everest. It requires you to take responsibility for your finances like nothing else in history. Some will never be ready to take on this level of responsibility.
Casey Carrillo had an interesting conversation about my journey to take possession of my keys. He also has his own story to share.
I was a young tech-inclined person and Bitcoin as a natively digital construct seemed completely normal to me. My custody story is not unique. Much like Mark Maraia's, I had a friend hold my entry into Bitcoin. But unlike Maraia who was present from the moment I was "orange pilled", he made sure I got my private keys.
At the time, this was in the form a hot wallet on the phone. It was the way that my wealth would be stored, which I believe was 24 words in length, that made me think it was dangerous. My friend told me that I could ruin the security for the seed phrase by recording it on a digital device. This was because I was not used to using important information (or password) at the time. Knowing that this would only be in the physical realm and thus subject to all of the physical dangers of life, such as fire or forgetfulness, made me feel uneasy.
It was easy for me to understand the difference between a custodial and a physical exchange. I compared it to cash, and keeping it in my physical wallet. It was clear to me that I was sending my bitcoins to a different destination. One that could not be touched by the entity I purchased it from. Although I understand that my hot wallet is not necessarily a "destination", but a signer, the metaphor still serves its purpose. The wallet metaphor still works well in explaining who has access to your cash in your wallet and money in your bank account. It's difficult to explain that distinction as effectively as it does.
It took me several more months to switch from a hot wallet to a cold storage wallet. I learned a lot about the differences and why it was necessary for the seed-generation process to be performed via an internet-connected device over that time. These realizations were only possible because I gained a better understanding of Bitcoin in general. Understanding Bitcoin is only one step away from understanding custody.
Except for those with high net-worth, I believe that knowledge of Bitcoin is strongly related to the amount of money invested. Anecdotally, there is little correlation. Some people take extreme measures to protect their bitcoins, while others have billions of dollars worth of bitcoin on one exchange. This is most likely a result of early adoption. It will change as more people understand bitcoin's value.
Many people would appreciate some help in learning about different types of bitcoin custody. This shows how important it is to understand the concept and educate others.
Closing thought
: We hope you found our journeys instructive and invite you to submit your own pitch for articles about your particular journey on achieving financial sovereignty and taking possession of your private keys to Austin@btcmedia.org. How long did it take you? Please share your story with us and we’ll seek to work with submissions that our editors feel are the most educational and instructive, and satisfy our editorial requirements.
This guest post is by Mark Maraia, Casey Carrillo. These opinions are not necessarily those of BTC Inc. and Bitcoin Magazine.
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By: Mark Maraia,Casey Carrillo
Title: The All-Important Journey To Self-Custody Bitcoin
Sourced From: bitcoinmagazine.com/culture/the-journey-to-self-custody-bitcoin
Published Date: Sat, 10 Sep 2022 23:00:00 GMT
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