The all-important journey to Bitcoin self-storage – Bitcoin Magazine
This is an opinion editorial by Mark Maraia, an entrepreneur, author of “Rainmaking Made Simple” and Bitcoiner, and Casey Carrillo, Associate Editor at Bitcoin Magazine.
One of the many things that makes bitcoin such an amazing resource is our ability to take possession of our private keys. This ability is so new and groundbreaking that the Law Commission of England and Wales has written a 500-page report proposing to design a new form of property rights for digital assets.
When I reflected on how long it took me to take possession of my private keys, I realized that it might be instructive for others. Being a boomer and not the least bit tech savvy or inclined, it took me months to feel comfortable enough to take possession of my private keys. My thought process – which I suspect is similar to many others – was that I trusted a third party exchange – which is nothing more than an IOU for bitcoin – more than I trusted 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 back then to know about private keys.
As COVID-19 continued and central bank money printing continued at insane levels throughout 2020, I began to wonder and worry about the purchasing power of the dollars in my US bank account. So I decided to buy more bitcoin in November 2020. It was only at that point, when I went down the proverbial rabbit hole and started learning about bitcoin exclusively, that I learned the importance of taking possession of your private keys.
I found it all confusing and intimidating, so I took it slow because there were too many choices and too many ways to mess up. There was then, as now, a dizzying array of hardware wallets and software wallets to choose from; everyone had their own opinion on what is best. Additionally, backing up the wallet or restoring the wallet required me to know about diversion paths and seed words. None of it was known, and I might as well have read Greek. I had concluded that I don’t want to rush into holding private keys until I felt comfortable. So I held the bitcoin I had bought on two different exchanges until 2021.
It took me until March 2021 to get there. Even then I had the help of a young intern, Kevin, who worked with me for three months and who was also interested in bitcoin – he actually wrote his master’s thesis on the risk aspects of putting bitcoin on a company’s balance sheet. I ordered a hardware wallet directly from one of the best vendors instead of going through a middle man. And then that friend helped me transfer some of my bitcoins in March. He showed me and one of my grown children how it works. What no one discusses in detail (for opsec reasons) is the best way to back up the device. That’s a whole separate article.
Okay, so far, so good. I’ve never felt comfortable keeping all my bitcoins on one device since it represented a single point of failure, so I continued to research multisig. Further research and reading led me to find two bitcoin only companies that offer multisig or vault services. Casa and Unchained Capital. It wasn’t until September 2021 when I finally felt ready to pull the trigger and chose one of them to hold the rest of my bitcoin in a multisig setup. It was 18 months after I bought my first bitcoin.
What I think some of the more tech-savvy and tech-inclined people in this room forget is how intimidating it can be to achieve that level of ownership. Many long-time bitcoiners take for granted how steep the learning curve is to owning the keys. The more technically savvy people see it as a small hill; those with less time or desire to educate themselves see it as Mount Everest. In addition, it requires taking responsibility for your own finances unlike anything else in history. And some will never be ready for this level of responsibility.
My journey in taking possession of my private keys led to an interesting conversation with Casey Carrillo on this topic, and he has his own journey to share.
As a tech-inclined young person, Bitcoin as a natural digital construct was completely normal to me. I think my custody story isn’t super unique – just like Mark Maraia, I had a friend who held my entry into Bitcoin by hand, but unlike Maraia, he was there from the very moment I got the “orange pill” and was therefore immediately done. sure I took possession of my private keys.
This was of course at the time in the form of a hot wallet on my phone. I remember thinking that the way my wealth would be stored – in 24 words, really – was risky. My friend explained that I would destroy the security of the seed if I were to record it on a digital device, as I (at the time) was naive to the proper security of some password, let alone my seed phrase) got used to doing with important information. So knowing that this would only exist in the physical realm, and therefore be subject to all the physical dangers of the world like a forgetful mind or fire, made me feel uneasy.
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 private keys, comparing it to obtaining money and then keeping it in my physical wallet. As I understood it at the time, I was sending my bitcoin to another destination, one that could not be touched by the device I had purchased the bitcoin from. I now understand the nuances of my hot wallet not necessarily being a “destination” so much as a signer, but at the time the metaphor served its purpose. I still think the wallet metaphor is effective in describing who has access to cash in your wallet as opposed to money in your bank account: it’s hard to describe that difference as effectively as the analogy does, even if it misrepresents the actual nature. of what we currently refer to as bitcoin wallets.
Other than that, it took several months for me to move from a hot wallet to a cooler. During that period I had learned about the differences between the two and why it would be necessary to have the seed generation process happen from an internet connected device. All of these realizations only came with increased understanding of the Bitcoin protocol in general. Custody is a parallel journey to understanding Bitcoin.
I would think that, except for high net worth individuals who are generally researching wealth storage anyway, the amount of funds invested (and therefore can be lost if a seed is forgotten, etc.) is highly correlated with knowledge of Bitcoin. But anecdotally, I’ve found little correlation: some people take great measures to protect meager 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 the value of bitcoin is understood by more people.
Overall, I think a lot of people would relate to having some kind of help when they initially learned about the different types of bitcoin escrow. In my opinion, this reveals how important it is for Bitcoiners who understand this to educate others and continue to try and find ways to better communicate why self-storage is important.
Final thought: We hope you found our tours informative and invite you to submit your own pitch for articles about your special journey to achieve financial sovereignty and take possession of your private keys to [email protected]. How long did it take you? Feel free to share your story with us, and we will try to work with submissions that our editors believe are the most instructive and instructive, and that satisfy our editorial requirements.
This is a guest post by Mark Maraia and Casey Carrillo. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
