Why multisig is the best approach for long-term cold storage for most people, and how to make the most of it for your generational wealth.
When it comes to storing your bitcoin, multisignature—or multisig for short—is widely recognized as one of the most secure methods. It can eliminate risks associated with exchanges and custodians, and simultaneously addresses the most common issues with self-custody. In this article, we’re going to walk through why you should hold your own bitcoin keys, what standard singlesignature self-custody looks like, and how multisig is an improvement for long-term cold storage.
WHY SHOULD I SELF-CUSTODY?
Interest in bitcoin usually begins with recognizing it as an alternative monetary tool that remedies some of the clear dangers of conventional money, such as inflation, censorship, and confiscation. As motivation grows for transferring wealth into bitcoin, people are immediately faced with the decision of how to safely store it.
The first piece of advice you might hear is to avoid custodial solutions. The reason for this is simple: custodians of fiat currencies like the U.S. dollar (banks, brokerages, etc) can offer certain guarantees that custodians of bitcoin cannot. For example, government programs like the FDIC and SIPC provide insurance for when a custodian loses client deposits, and this obligation can always be met. Bitcoin has a strict supply limit—21 million coins—and new units can never be arbitrarily issued to replace coins that are lost by an irresponsible or malicious custodian.
Avoiding a custodian implies taking self-custody. In the world of bitcoin, custody is determined by who controls the private keys, because the private keys are the tools required to spend bitcoin. If you have purchased bitcoin on an exchange and haven’t withdrawn it to your own custody controlled by your own keys, then the bitcoin remains controlled by the exchange’s keys, and all you have is an IOU, rather than actual bitcoin. As the popular saying goes, “not your keys, not your bitcoin
#Write2Earn #strk #Portal #MATIC
When it comes to storing your bitcoin, multisignature—or multisig for short—is widely recognized as one of the most secure methods. It can eliminate risks associated with exchanges and custodians, and simultaneously addresses the most common issues with self-custody. In this article, we’re going to walk through why you should hold your own bitcoin keys, what standard singlesignature self-custody looks like, and how multisig is an improvement for long-term cold storage.
WHY SHOULD I SELF-CUSTODY?
Interest in bitcoin usually begins with recognizing it as an alternative monetary tool that remedies some of the clear dangers of conventional money, such as inflation, censorship, and confiscation. As motivation grows for transferring wealth into bitcoin, people are immediately faced with the decision of how to safely store it.
The first piece of advice you might hear is to avoid custodial solutions. The reason for this is simple: custodians of fiat currencies like the U.S. dollar (banks, brokerages, etc) can offer certain guarantees that custodians of bitcoin cannot. For example, government programs like the FDIC and SIPC provide insurance for when a custodian loses client deposits, and this obligation can always be met. Bitcoin has a strict supply limit—21 million coins—and new units can never be arbitrarily issued to replace coins that are lost by an irresponsible or malicious custodian.
Avoiding a custodian implies taking self-custody. In the world of bitcoin, custody is determined by who controls the private keys, because the private keys are the tools required to spend bitcoin. If you have purchased bitcoin on an exchange and haven’t withdrawn it to your own custody controlled by your own keys, then the bitcoin remains controlled by the exchange’s keys, and all you have is an IOU, rather than actual bitcoin. As the popular saying goes, “not your keys, not your bitcoin
#Write2Earn #strk #Portal #MATIC
