Multisignature For The Nontechnical Bitcoiner – Bitcoin Magazine
This is an opinion piece by Mickey Koss, an educated West Point with a degree in economics. He spent four years in the infantry before joining the Financial Corps.
My family was nervous about holding our own keys. It is a big, scary responsibility that leads to procrastination. After watching some BTC Sessions videos, we finally decided it was time. Around March 2022, we finally withdrew our bitcoin… from Celsius.
It seemed like the responsible thing to do. We do not make much money. Why not use an interest-bearing account to increase the average of our dollar costs. It’s just like a bank? Keep our money safe with someone else and earn some money. We now realize the risk. Laziness and fear almost resulted in disaster.
If there is one thing I am grateful for in this bear market, it is the emphasis on how risky these custody services are.
A conflicting mindset
One thing I love about the Bitcoin site is the constant risk analysis that is going on. The risk that a large part of the population takes by failing to withdraw their coin from custodians, which ultimately results in a mixed form of regulatory capture and rehypotection is a main point that has become incredibly prominent to me lately.
Bitcoin can only really thrive if you disintermediate the system. Peer-to-peer electronic cash, digital gold, a hedge against ruthless monetary policy, a hedge against tyranny – no matter what definition or Bitcoin theory you subscribe to, the conclusion is the same: To win, you must hold your own keys.
A development of responsibility
I have a background in economics and business. The technology behind self-storage made me very uncomfortable. What if I’ve ruined it? What if I not only lost my signing device but also the backups from the start phrase? What if we lost everything that the multi-million dollar horror stories that the mainstream media loves to present?
We are certainly not rich, but our bitcoin holdings mean a lot to us. Our energy, our life savings, our own personal proof of work, represented by numbers on a screen in the form of UTXO. It was time to take some responsibility.
I spent hours researching products and techniques for self-preservation before I became comfortable enough to secure our coin in a single signature solution. Radical responsibility requires proof of work.
Graduating to Multisig: Diversification Of Security
After several months of successful self-HODLing, I became uncomfortable with the single-point-of-failure solution I had developed. Not only in the sense that there was only one private key that protected our life energy, but in the sense that there was also one hardware device. We not only had to trust ourselves to be vigilant over the years, but also had to trust the software and hardware developers of the individual solution we chose to use.
One solution, multiple error points is not something I liked to think about.
After a few more hours of BTC Sessions, and a discussion with my friend at Unchained Capital, my wife and I made the decision to diversify our security through the use of multisig vaults, and guess what? It was pretty simple.
Compatible hardware wallets include Ledger, Trezor and Coldcard. We chose to use two different types to further diversify our security. Unchained offers a concierge setup service, but after watching BTC Sessions, I barely needed the step-by-step instructions. I even went so far as to restore the multisig layout on several software wallets such as Blue and Sparrow. Just because vaults are built using Unchained, does not mean that you have to use their interface for everything, and that you can get money back without them.
Honestly, the hardest part of the whole process was figuring out that I needed to download the Google Chrome browser instead of the junk browser I was trying to use in the first place.
One feature I really liked was the “key check” feature. I had uploaded the extended public keys for our Unchained devices. Before sending any UTXOs over, I dried both my devices and used the seed sets to recover them. The key check function in Unchained gave me the confirmation I needed that I had not only registered the seed phrase correctly, but had recovered the wallets correctly instead of inadvertently generating a new wallet with the wrong word.
I’m sure there is a better way to do this, but like I said, I’m not a technician, and this technique made sense to me and gave me comfort.
No more excuses
We barely avoided a disaster with Celsius, but are now self-sufficient. My experience with Unchained gave me comfort, but was also an incredibly educational experience. I learned more about Bitcoin during my two or three hours of setup and fixing than I have had in recent years. With a little guidance, my 58-year-old father managed to set up a multisig wallet in less than two hours.
Whether you choose to go with a traditional single signature wallet, a self-contained multisig wallet or a managed multisig solution such as Unchained Capital, the most important thing is that you take self-defense and become self-sufficient. Each time a UTXO is withdrawn from stock exchanges, the risk of regulatory capture and rehypotek is reduced accordingly.
As the great Patches O’Houlihan once said, “If you can avoid a wrench, you can avoid a ball.” I’m here to tell you, if you can read those words, then you’re smart enough to take self-defense of your coins. No more excuses.
Rights and duties are one and the same. The right to remain free requires responsibility to do so. By keeping your keys and becoming self-sufficient, you make the network so much stronger. Do not give up your freedom. Take responsibility and seize it.
This is a guest post by Mickey Koss. Expressed opinions are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
