Secure Your Bitcoin
What is Important
After many years, 1000’s of hours of study and countless personal mistakes, I’ve reached the conclusion that there are 3 important steps a “bitcoiner” should follow:
- Get off zero
- Take possession of your Bitcoin
- Secure your Bitcoin for the long term
So, grab a coffee and let’s walk through what each of these mean for you, with practical tips to let you take the next step.
1. Get Off Zero
Put simply, this just means you need to own some Bitcoin. The only wrong number of Bitcoin is Zero. Allow no one to tell you how much you should buy, only you can make this decision. The more you learn, the more comfortable you will be with your holdings. All bitcoiners were newbies at one time and we all had to go through this process.
How and Where to Buy are controversial topics. You could buy from a friend, a peer-to-peer marketplace, a bitcoin-only exchange or a shitcoin casino.
Before choosing which option suits you, know the answer to this question. Can I take possession of MY Bitcoin? If the answer is No, keep looking.
Even better than Buying Bitcoin is Earning Bitcoin.
2. Take Possession of YOUR Bitcoin
You may have heard bitcoiners say “Not Your Keys, Not Your Coins”. All this means, is that if you’re not the person that looks after your private key (think extremely secure password), all you have is an IOU for Bitcoin and a hope (gulp) that the person that controls the private key on your behalf, is honest.
That’s a big IF, so if you feel competent to look after your private key, I encourage you to do so.
There are many great guides out there, but 3 of my favourites are BTC Sessions, Wicked Smart Bitcoin and Ketan from Ministry of Nodes.
Between them, they have hundreds of videos including many “How-Tos” on how to hold your own keys securely via both software and hardware devices such as Sparrow, ColdCard, SeedSigner, Trezor and Blockstream Jade (use code “BTCFIRST” for a 10% discount at Blockstream).
Secure YOUR Bitcoin for the Long Term
This is where it starts getting interesting, and there is no one right answer, there is only YOUR answer for YOUR situation.
Personally, I believe it is prudent to think of your Bitcoin in 3 different pots, and assign a percentage to each pot.
Pot A: Your Spending Stack
Pot B: Your Single Signature Cold Storage Stack
Pot C: You Multi-Signature Collaborative Custody Stack
Pot A: Your Spending Stack
For example, imagine you had $100k total wealth in the world, you wouldn’t carry it all in cash in your wallet. Perhaps you’d be comfortable with a few hundred dollars. This is the amount you’d keep in Pot A. You might choose to use a Lightning Wallet like Phoenix or a Bitcoin hot wallet like Blockstream Green, to do this.
Pot B: Your Single Signature Stack
Refer back to Point 2 (above)
Pot C: Your Multi-Signature Collaborative Custody Stack
This was a sticking point for me. For a long time, I’ve been of the opinion that a robust single signature setup offers the better security for an individual. Yes you can do “multi-sig”, but if you are the person responsible for managing all (or more than one) of the keys, I think you (or I) are the biggest threat to screwing something up.
You can be the most technically minded, security focused bitcoiner out there, but:
- Is your partner?
- Are your kids?
- Does your Bitcoin go where you want it to go if you get knocked down by a bus tomorrow?
This is where multi-signature, collaborative custody comes in, and it is why I’ve chosen to work with The Bitcoin Adviser.
In this setup, at its most simple, you hold a key, The Bitcoin Adviser hold a key and a third party (such as Unchained or Nunchuk) holds a key.
You need 2 of these 3 keys to move YOUR Bitcoin. ONLY YOU can initiate a send transaction. Should you ever lose your key, you can instruct The Bitcoin Adviser to work with the third party to create a new Bitcoin vault, and replace your key. Think of it as insurance against you making a stupid mistake and losing your hard earned Bitcoin.
Am I suggesting that you hold all of YOUR Bitcoin in Pot C? No. All solutions have compromise.
I am suggesting that it’s prudent to consider what proportion of your Bitcoin you should hold in pots A, B and C.
If you’d like to talk to me about your Pot C, please click the logo below to schedule a free appointment.
I make you one promise. There will be NO sales pitch (I hate that too). If we talk Bitcoin for an hour and you decide it’s not right for you, then it’s not right for you. It’s YOUR money.