After a week of drama all around the crypto space and after, once again, thousands of people having lost their savings with custodians and "crypto banks", I've decided to make this short video.
Making this video took me less than 20 minutes so if you don't manage your own private keys yet, this shouldn't take you more than 10 minutes to reach peace of mind with your HODL coins.
Before we start let me however clear up some very common misconception we encounter every time when people talk about this topic.
- There is no such thing as self-custody.
- There is no such thing as moving coins TO your wallet.
Wait, what?
Correct, ALL coins and NFTs only exist ON their respective blockchain. Thus you cannot move coins TO a wallet or store coins "off-chain". The only thing you can do is moving your coins, tokens, NFTs to an address for which you control the private key giving you access to your assets ON the blockchain.
Once you understand this you'll also understand that your wallet cannot get hacked, you cannot lose coins and if you lose your phone or your HD crashes the only thing you'll ever need to regain control over your assets ON-CHAIN is the private key controlling access to those assets.
In other words, your wallet is a signing device and your private key identifies you as the owner of any asset "associated" ON the blockchain with that address.
So let's do this!
(Note: The wallet used in this example is deemed compromised. Do not send tips to any address, do not use these keys or seed in any form whatsoever!!!)
You see? I've created a fresh wallet in less than 10 minutes, backed up the seed (of the entire wallet) and I backed up the private key of the wallet I (demo wise) planned to use.
10 minutes of my time to protect myself from Counterparty failure, insolvency or rug pulls FOREVER.
Now that you understand the beauty of private keys, did you know that you can import the same key into various wallets to access your coins from any device you like? That's because your coins are on the blockchain and you can "sign" accessing them from ANY device or numerous devices. Again, that's why you cannot lose coins even if your device gets lost or breaks down.
Thanks for taking the time to read/watch. I hope this will take the so called "self-custody" fear away from some of you.
References:
Wallet used: https://electrum.org/
Managing private keys: https://www.investopedia.com/terms/p/private-key.asp
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Well-explained wallet creation procedure in the video. People have to understand this finally.
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Great work. Nice one
thank you!
Ps. Thanks for sharing on Noise 😉
I like that site. Just wish we could embed videos ;)
Yeah, perhaps it will come later.
I guess so. linking remote content shouldn't be a problem and doesn't require server space. I can understand that they don't support uploading larger files yet but yeah, remote embedding would be a cool feature
Someone asked me how I store my private keys once I've backed them up
You can store a key in any form you like. digital, on paper or as tattoo. However, I'm OG so I use 3 PGP encrypted pen-drives duplicating each other. I'm too old to buy a hardware wallet ;)
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Yay! 🤗
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Bookmarking as need to do this this week.
That's great, please do! If you need any help with other coins than BTC let me know in the comments. I'll happily talk you through other wallets, tokens etc.
Good stuff! That was easy to follow. Hope this reaches newbies thinking about getting a wallet.
This was the first thing I learned when I bought my Ledger Nano back then. 😊
!PIZZA
Thanks buddy. I believe that some of the terminology we use is one of the main reasons why people newer to this space are afraid of taking their assets into "self-custody" as it's called. There is much misconception on how blockchains work.
Like mentioned once you understand that everything only exists on the respective blockchain something like key management all of a sudden makes a lot more sense and it is really less scary than many make it sound.
Andreas Antonopoulos created a lot of great content on this topic. I can only recommend to anyone to watch his older videos on YT. I've learned a lot from Andreas in my early days in this space. Managing my own keys was one of those things.
Yeah, it's strange to come across people saying they keep their assets "offline" when actually their assets are never offline. It's all about the keys.
Thanks for the tip, I might check out this guy.
I found this video. I think it's a reupload of the one I watched like 10 years ago. Thanks to Andreas I've survived Mt.Gox, Mintpal, Cryptsy, Paybase, Cryptopia and yeah, now FTX.
Thanks!
You've been in crypto for quite a time? I haven't had problems with CEXs but then again I've never held on those much(just enough to trade). I took quite a hit with Terra Luna crash though. Didn't see that coming, too much hype and too little research. Well, live and learn..
Sorry to hear about Luna. Personally I only keep what I need to trade on one exchange and some play money for their debit card. See, most coins are very cheap to deposit or withdraw as long they're not locked into LP or staking. So I never saw the reason to keep large amounts on any exchange.
Back then the only pairs were pretty much ALT/BTC anyway so I'd deposit to trade and withdraw by the end of the day anything not tied into an overnight trade. There was also no leverage and trading was a very different game back then. Anyway, I still move coins into their wallets today. LTC, MATIC, BNB and others are so cheap to move even today.
Me too even today, every day. Very fast moving space ;)
I hear you. I prefer LTC to transfer between exchanges, supported on most, on Hive second layer as well, and it's pretty cheap to transfer. BCH is another one.
And Luna... yeah, I'm over it now but I would guess a lot of pretty reasonable people lost with that one.
Probably one of the biggest misconceptions newcomers have when being first exposed to this space. Also one of the first things I try to explain whenever someone asks me about Bitcoin.
Seeing Bitcoin as a commodity is another one of those misconceptions (imo). It has this touch of "investment fear" to it when viewed from that perspective. When I talk to people about Bitcoin I try to talk about it as an actual currency. A "foreign" currency but yet, just a currency. Thus "it's just money". I tell people when they buy their first sats they are basically engaging in a foreign exchange, one for another, just like you swap when you travel abroad.
How someone sees Bitcoin makes a big difference imo and you can take away a lot of fear and reservations if you talk to people about it in that way.
That is an interesting point of view. I still compare BTC to stocks because of its high volatility. Of course, currencies have that too but it's not "visible" if you know what I mean.
That's a good point! Btw, do you blog about crypto in general? Would like to read more of your thoughts!
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