The How What & Why of Bitcoin Self Custody – Epi-3211
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The entire point of bitcoin is that you can self custody your bitcoin. In fact while many seem to think “be your own bank” means run your own node, it is really all about self custody. Think about why we have banks in the first place. Banking as we know it (international banking) goes back to the times of The Knights Templar.
In this time people would make pilgrimages to the holy lands. You may imagine at such a time only those with means could make such a journey. The journey would be long, hard and expensive. You’d also have to pay for things while in the holy land, then have enough to get back to say England.
At this time gold was money. And if you had gold it had value you could use anywhere. If I stole your gold there was not much you could do about it. If I got away it was just gone. So the Templars invented a banking system. You could give them gold, they gave you a receipt and you could get your gold back anywhere they had a “bank”.
Since marauders would not be given your gold the receipt was your claim on the gold but basically worthless to thieves. This strategy worked, banking began to become something like we think of today. In the end though people use banks for two primary reasons….
- To safely hold money
- To utilize the bank as a payments system (money in like direct deposit and out like say a check to pay a bill)
While some people do “live on bitcoin” and are very concerned with the second point, those people already tend to be self custody types. So we are going to focus just on #1 for this issue, safely holding bitcoin. Because people are comfortable with modern banks they tend to be okay with a crypto exchange pretending to be a “crypto bank”, yet as we will see today your money isn’t even that secure in a “real bank”.
Join Me Today to Discuss…
- The stories of how banks came into existence
- Grain bills and pharos
- International banking
- Regional banking (wild cat banks) – link
- Why people think banks are secure places to hold money
- Modern banking in general works very well
- FDIC insures almost 100% of deposits for the average person
- Schools teach use banks are safe from early childhood
- Many services in our lives pretty much require a bank account
- Credit/Debit cards have protections built into them
- Why banking is not as secure as you think
- State and federal governments can and do lock and seize accounts
- Your holdings can be locked for lawsuits, etc.
- A bank can pretty much lock up the funds of any account at any time
- Why crypto exchanges have the same risks but also have
- Significant counter party risk – no guarantee of reserves
- Very little regulation and hence no probability of being “bailed out”
- Often co mingle funds into high risk activities like “yield farming”
- What is self custody and is there any down side
- Self custody means you hold your own keys (12 words)
- No party can take, lock, etc. your bitcoin
- Determining exactly how much you have is difficult for a third party
- But if you loose access and your phrase you are screwed
- What forms of self custody are there
- Software wallets – bronze standard
- Hardware wallets – silver standard
- Hardware wallets with your own node – gold standard
- Other options and why you might use them
- 2 of 3 multi sig
- Custodial accounts for things like IRAs
- Software wallets with a cold device
- In the end bitcoin without self custody is probably worse than dollars in the bank
Resources for today’s show
- Follow Life With Jack on Instagram
- Join the Members Brigade
- Join Our Forum
- Walking To Freedom
- TspAz.com
- TSPC on Discord
- TSPC Group on Telegram (group chat)
- TSPC Telegram Channel (just messages from me)
- Jack on Flote
- Jack on MeWe
- Join Me on Odysee
- SOE Tactical Gear – Where I get all my cool shirts
- All the Bitcoin/Crypto Tools & Gear I Recommend
Sponsors of the Day
- Start9.com – Take Back Your Digital Sovereignty
- Ridge Wallet – Minimize and Upgrade your EDC at the Same Time
- Get the Fold Card
Video Version of Today’s Show
Remember to comment, chime in and tell us your thoughts, this podcast is one man’s opinion, not a lecture or sermon.
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Some videos to help setting up Start 9 would be wonderful! A personal assistant to do it would be better, but I will take what I can get.
I am about as tech retarded as you can get. My assistant would hand me her iPhone and tell me to call or text somebody, and I cannot even open the phone. I have watched her, and it really is as simple as pressing a button, but for some reason I am incompetent at this. So I use Android, even though it is not as secure as iPhone.
I THINK I set up my Start 9 several months ago on my laptop. But it did not work with Brave browser, so I am not even sure if it is done properly. It took me hours, and in the end I was frustrated beyond belief, but did not throw my laptop or anything, thankfully. Sadly, I only use my laptop to print shipping labels and do my taxes, so my Start 9 is a paperweight.
I would love to be able to use it on my phones. I use my phones for everything, and let’s just say that my business bleeds black, so privacy would be a huge benefit. To be fair to Start 9, they have very clear directions, and after I figured out each step, it really was just like they said, usually. As of last year, I have an IQ of 129, but just cannot get my head around technology.
I have been in the MeWe crypto group for just over a year now, and still cannot figure out things like, how to link to the above comment that I am responding to. I also cannot find a comment after leaving the page, unless it is on the main thread. Trust me, tech and I are not friends. I would gladly have paid twice the price for my Start 9 if it came with a person to set it up for me. Haha!!
Happily, I do have a hardware wallet where I keep all of my Bitcoin, so I can manage to figure some things out.
Thanks for the show Jack. You have inspired me to make tremendous changes in my life, but your tech savvy has not bled over yet.
Hi, Jack, and other readers. After hearing this episode I was encouraged to break the seal on my still-boxed Trezor 1, install the Trezor Suite on my Mac, and move my Coinbase holdings to my Trezor. Only after that, though, did I realize that there was no Trezor mobile app so now it appears that I’m stuck doing all of my transactions sitting at my desk. (So much for buying stuff with crypto while wandering through the flea market.) If I install the Exodus mobile wallet on my phone, how do I transfer my holdings from the Trezor app on my desktop to the Exodus app on desktop/phone? I’m just getting my feet wet with crypto and don’t want to loose what i already hold. What I need is probably out there some where but so far all I have found seems to be about setting up a new wallet, not transferring from an existing wallet using one app to another app. Any help would be greatly appreciated!