This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transitioning to the Finance Corps.
My family was nervous to hold our own keys. It’s a huge, intimidating responsibility, leading to procrastination. After watching a few BTC Sessions videos, however, 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 don’t make that much money. Why not leverage an interest-bearing account to beef up our dollar-cost averaging. It’s just like a bank right? Keep our funds safe with someone else and make a little money. We now realize the risks. Laziness and fear nearly resulted in disaster.
If there’s anything I’m thankful for in this bear market, it is the highlighting of just how risky these custodial services are.
An Adversarial Mindset
One thing I love about the Bitcoin space is the constant risk analysis that goes on. The risk that a large portion of the population takes by failing to withdraw their coin from custodians, which ultimately results in some mixed form of regulatory capture and rehypothecation is a main point that has become incredibly salient to me lately.
Bitcoin can only truly thrive if you’re disintermediating the system. Peer-to-peer electronic cash, digital gold, a hedge against reckless monetary policy, a hedge against tyranny — whatever definitions or Bitcoin theory you subscribe to, the conclusion is the same: To win you need to hold your own keys.
An Evolution Of Responsibility
I have a background in economics and business. The technology behind self-custody made me very uncomfortable. What if I screwed it up? What if I not only lost my signing device, but the seed phrase backups as well? What if we lost everything like the multimillion-dollar horror stories mainstream media loves to everything?
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 UTXOs. It was time to take some responsibility.
I spent hours researching products and techniques on self-custody before I got 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 protecting our life energy, but in the sense that there was only one hardware device as well. We not only had to trust ourselves to stay vigilant throughout the years, but also had to trust the software and hardware developers of the single solution we chose to use.
One solution, several points of failure is not something I liked to think about.
After a few more hours with BTC Sessionsand 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 damn easy.
The compatible hardware wallets include Ledger, Trezor and cold card. We chose to use two different types to diversify our security further. Unchained does offer a concierge set-up service, but after watching BTC Sessions, I barely even needed the step-by-step instructions. I even went as far as restoring the multisig setup on multiple software wallets like Blue and Sparrow. Just because the vaults are built using Unchained doesn’t mean you need to use their interface for everything and you can recover funds without them.
Honestly, the most difficult part of the whole process was figuring out that I needed to download the Google Chrome browser instead of the trash browser I was attempting to use initially.
One feature I really liked was the “key check” function. I had uploaded the extended public keys for our devices onto Unchained. Before sending any UTXOs over, I wiped both of my devices and used the seed phrases to restore them. The key check function in Unchained gave me the confirmation I needed that I had not only recorded the seed phrase correctly, but had restored the wallets properly instead of inadvertently having generated a new wallet with the wrong words.
I’m sure there’s 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 apologies
We narrowly avoided catastrophe with Celsius, but are now self-reliant. My experience with Unchained gave me comfort, but was also an incredible learning experience. I learned more about Bitcoin in my two or three hours of setup and tinkering than I had in the past several years. With a little guidance, my 58-year-old dad was able to set up a multisig wallet in less than two hours.
Whether you choose to go with a traditional single-signature wallet, a self-sovereign multisig wallet or a managed multisig solution like Unchained Capital, the most important piece is that you are taking self custody and becoming self sovereign. Every time a UTXO is withdrawn from exchanges, the risk of regulatory capture and rehypothecation is thusly and proportionally reduced.
As the great Patches O’Houlihan once said, “If you can dodge a wrench, you can dodge a ball.” I’m here to tell you, if you can read these words, then you’re smart enough to take self-custody of your coins. No more excuses.
Rights and responsibilities are one and the same. The right to remain free requires the responsibility to do so. Through holding your keys and becoming self-sovereign, you make the network that much stronger. Don’t give up your freedom. Take responsibility and sixteen it.
This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.