Jekyll2021-02-13T12:12:03+00:00https://safehodl.github.io/feed.xmlBitcoin Security GuidesWrite an awesome description for your new site here. You can edit this line in _config.yml. It will appear in your document head meta (for Google search results) and in your feed.xml site description.Safe Hodlsafehodl@protonmail.comEvery Reason Bitcoin Will Not Fail2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/failure<p class="image-title"><img src="/assets/images/failure.jpg" alt="failure" /></p>
<p>Over the years we’ve heard many reasons why Bitcoin will fail. Bitcoin has been <a href="https://99bitcoins.com/bitcoin-obituaries/">declared dead 396 times</a> yet it continues to grow in market cap, hashpower, and network size. More engineers, investors, and advocates join its ranks everyday.</p>
<p>Yet each wave of adoption brings people who argue why Bitcoin will fail. To address all doubts, including my own, I have created this list of every single argument against Bitcoin.</p>
<h4 id="bitcoin-transactions-will-be-stopped-or-censored">Bitcoin transactions will be stopped or censored</h4>
<ul>
<li><a href="#governments-will-stop">Governments will stop Bitcoin</a></li>
<li><a href="#exchanges-can-be-shutdown">Exchanges can be shutdown by governments</a></li>
<li><a href="#cant-scale-transactions-are">Bitcoin can’t scale, transactions are too slow or expensive</a></li>
<li><a href="#shut-off-internet-because">Downed internet because of governments or natural disasters will stop Bitcoin</a></li>
<li><a href="#miners-are-centralized-and">Miners are centralized in China and will be forced to censor or stop all transactions</a></li>
<li><a href="#block-rewards-will-stop">Block rewards will stop in the future and Bitcoin will lose all security</a></li>
<li><a href="#banning-nodes-will-stop">Banning nodes will stop Bitcoin</a></li>
<li><a href="#a-miner-death-spiral">A miner death spiral where less hashrate leads to price drops in a spiral to zero</a></li>
<li><a href="#outspending-the-miners-would">Outspending the miners would allow someone to censor or stop transactions</a></li>
<li><a href="#shutting-off-energy">Miners losing access to energy will stop transactions</a></li>
</ul>
<h4 id="bitcoin-will-be-stolen-or-confiscated">Bitcoin will be stolen or confiscated</h4>
<ul>
<li><a href="#governments-will-ban-ownership">Governments will ban ownership or confiscate all Bitcoin.</a></li>
<li><a href="#quantum-computing-will-break">Quantum computing will break the security</a></li>
<li><a href="#is-too-complicated-for">Bitcoin is too complicated to self-custody and will be stolen from custodians.</a></li>
<li><a href="#cannot-be-insured-unlike">Bitcoin cannot be insured, unlike bank deposits</a></li>
<li><a href="#a-bug-in-could">A bug in Bitcoin could allow hackers to steal or disrupt the network.</a></li>
</ul>
<h4 id="bitcoin-cannot-store-value-in-the-long-run">Bitcoin cannot store value in the long run</h4>
<ul>
<li><a href="#has-no-intrinsic-value">Bitcoin has no intrinsic value (unlike say gold)</a></li>
<li><a href="#price-is-too-high">Bitcoin’s price is too high, it’s too expensive</a></li>
<li><a href="#is-too-volatile-to">Bitcoin is too volatile to be in an investment portfolio or be a store-of-value</a></li>
<li><a href="#is-manipulated-by-fraudulent">Bitcoin is manipulated by fraudulent whale and Tether trading</a></li>
<li><a href="#is-a-ponzi-or">Bitcoin is a ponzi or pyramid scheme</a></li>
<li><a href="#is-a-bubble-like">Bitcoin is a bubble like tulip mania</a></li>
<li><a href="#guns-and-taxes-back">Guns and taxes back fiat currencies, Bitcoin is backed by nothing</a></li>
<li><a href="#scarcity-can-be-changed">Scarcity can be changed by the developers unlike other assets</a></li>
<li><a href="#can-be-forked-infinitely">Bitcoin can be forked infinitely which dilutes the value</a></li>
<li><a href="#has-no-yield-its">Bitcoin has no yield, it’s not an investment, therefore it has no value</a></li>
<li><a href="#central-bank-digital-currencies">Central bank or corporate currencies will outcompete Bitcoin</a></li>
<li><a href="#newer-decentralized-cryptocurrencies-will">Newer decentralized cryptocurrencies will outcompete Bitcoin</a></li>
</ul>
<h3 id="strawman-arguments">Strawman arguments</h3>
<ul>
<li><a href="#surveillance-regulation-kyc">Surveillance and regulation from KYC/AML will render Bitcoin useless</a></li>
<li><a href="#evades-taxes">Bitcoin evades taxes</a></li>
<li><a href="#fiat-currencies-cannot-collapse">Fiat currencies cannot collapse so we have no need for Bitcoin</a></li>
<li><a href="#is-unfairly-distributed-and">Bitcoin is unfairly distributed and rewards people for doing nothing</a></li>
<li><a href="#disinflationary-money-breaks-the">Disinflationary money breaks the economy so we cannot adopt Bitcoin</a></li>
<li><a href="#theres-no-merchant-adoptance">There’s no merchant adoptance of Bitcoin so it is doomed</a></li>
<li><a href="#is-subjective-imaginary-a">Bitcoin is subjective, imaginary, a mass delusion</a></li>
<li><a href="#is-a-cult-the">Bitcoin is a cult, the people who believe in it are ideologues and maximalists</a></li>
<li><a href="#uses-too-much-energy">Bitcoin uses too much energy, it’s bad for the environment</a></li>
<li><a href="#is-not-programmable-as">Bitcoin is not programmable, as useful, or functional as other cryptocurrencies</a></li>
<li><a href="#terrorists-and-drug-dealers">Terrorists and drug dealers use Bitcoin</a></li>
</ul>
<h3 id="useful-links-for-further-reading">Useful links for further reading</h3>
<ul>
<li><a href="https://www.lynalden.com/misconceptions-about-bitcoin/">7 Misconceptions About Bitcoin</a></li>
<li><a href="https://nakamotoinstitute.org/mempool/series/gradually-then-suddenly/">Gradually, Then Suddenly</a></li>
<li><a href="https://danheld.substack.com/people/6127327-dan-held">Dan Held’s Newsletter</a></li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h4 id="governments-will-stop">Governments will stop Bitcoin</h4>
<ul>
<li>Which governments? Your mileage will vary depending on whether you live in <a href="https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory">North Korea, China, or Switzerland</a>. All countries have borders that can be crossed by people. Bitcoin crosses borders as easily as any information can.</li>
<li>Bitcoin is a global software network that cannot be stopped anymore than we could stop all ants from existing around the globe. Even governments are limited in their effective power.</li>
<li><a href="https://www.coindesk.com/pension-funds-double-crypto-asset-exposure-in-morgan-creeks-fund-to-1">Pensions</a>, <a href="https://www.thecrimson.com/article/2019/4/12/hmc-crypto-investment/">endowments</a>, <a href="https://www.bloomberg.com/news/articles/2020-12-10/169-year-old-insurer-massmutual-invests-100-million-in-bitcoin">insurance companies</a> and corporations own Bitcoin. Governments that have allowed these institutions to own Bitcoin will not be able to make it illegal without impoverishing their voter base. Companies that built on top of Bitcoin, including <a href="https://www.fidelitydigitalassets.com/overview">large financial insitutions</a> would be crippled.</li>
<li>Governments are constrained by their citizens and laws. Since <a href="https://fortune.com/2020/11/04/wyoming-bitcoin-cynthia-lummis-u-s-senate/">politicians</a>, <a href="https://news.bitcoin.com/nasdaq-microstrategy-bitcoin-425-million/">corporations</a>, and <a href="https://www.bitcoinmarketjournal.com/how-many-people-use-bitcoin/">citizens</a> already own Bitcoin, some in “the government” or capable of lobbying the government already have a vested interest in Bitcoin.</li>
<li>Countries compete with each other, they won’t all work together to stop Bitcoin. Governments want to attract investment and technology so they will create competitive laws to attract Bitcoin. Rival countries need neutral reserve assets like gold or Bitcoin since they cannot trust the currency of their rival.</li>
<li><em>See also:</em> <a href="#governments-will-ban-ownership">Governments will ban ownership or confiscate all Bitcoin</a></li>
<li><em>See also:</em> <a href="#exchanges-can-be-shutdown">Exchanges can be shutdown by governments</a></li>
<li><em>See also:</em> <a href="#banning-nodes-will-stop">Banning nodes will stop Bitcoin</a></li>
<li><em>See also:</em> <a href="#shut-off-internet-because">Downed internet because of governments or natural disasters will stop Bitcoin</a></li>
<li><em>See also:</em> <a href="#is-too-complicated-for">All the Bitcoin can be stolen from custodians</a></li>
<li><em>See also:</em> <a href="#central-bank-digital-currencies">Central bank digital currencies or corporate currencies will outcompete Bitcoin</a></li>
<li><em>See also:</em> <a href="#surveillance-regulation-kyc">Surveillance and regulation from KYC/AML will render Bitcoin useless</a></li>
</ul>
<h4 id="exchanges-can-be-shutdown">Exchanges can be shutdown by governments</h4>
<ul>
<li>In most countries Bitcoin exchanges operate legally and governments prefer that to black markets.</li>
<li>Peer-to-peer exchanges cannot be stopped. Every country that has <a href="https://news.bitcoin.com/binance-launches-p2p-trading-in-china-with-support-for-alipay-and-wechat/">shutdown exchanges have seen the emergence of peer-to-peer exchanges</a> that can leverage any existing payment networks.</li>
<li>Transactions are unstoppable and undetectable. Bitcoin transactions can be hidden in text messages, <a href="https://twitter.com/aantonop/status/1088556402115784704">emjoi</a>, images, and sent from anywhere on the internet.</li>
<li>Governments never could completely stop goods that most people wanted. Black markets formed in cannabis and alcohol, and Bitcoin is far easier to move and harder to detect than those.</li>
<li><em>See also:</em> <a href="#governments-will-stop">Governments will stop Bitcoin</a></li>
</ul>
<h4 id="banning-nodes-will-stop">Banning nodes will stop Bitcoin</h4>
<ul>
<li>Nodes cannot be stopped in every country. So long as a node is running somewhere in the world Bitcoin can continue to validate transactions.</li>
<li>Nodes can be run invisibly behind the Tor network which is legal in most countries.</li>
<li>Distributing node software is freedom of speech. Governments with <a href="https://www.pbs.org/wgbh/nova/article/is-code-free-speech/">freedom of speech laws have set precedents</a> to allow sharing of open-source software such as Bitcoin.</li>
</ul>
<h4 id="shut-off-internet-because">Downed internet because of governments or natural disasters will stop Bitcoin</h4>
<ul id="split-internet-communication-will">
<li>People will work immediately to bring the internet back. If the internet stops working entirely so do modern economies and governments.</li>
<li>Bitcoin can function even with 1% of the current nodes. Internet shutdowns, solar flares, or other disasters might disrupt a large part of the internet but Bitcoin would be secured by the part of the internet that continues to function.</li>
</ul>
<ul>
<li>The internet is adaptive–Bitcoin <a href="https://blog.bitmex.com/bitcoin-satellite/">satellites</a>, <a href="https://txtenna.com/">mesh networks</a>, and <a href="https://www.coindesk.com/bitcoin-coders-send-international-lightning-payment-over-ham-radio">radio transmitters</a> can continue to transmit Bitcoin blocks and transactions between countries if cellular or fiber internet goes down</li>
<li>Slow or broken communication between countries can be worked around. Delays in communication between chains means more blocks are required for final settlement, but does not stop Bitcoin. If the chain split is permanent each chain can fork to disallow being rewritten.</li>
</ul>
<h4 id="cant-scale-transactions-are">Bitcoin can’t scale, transactions are too slow or expensive</h4>
<ul>
<li>Scaling can happen infinitely on second layers. Layers such as <a href="https://lightning.network/">Lightning</a>, <a href="https://blockstream.com/liquid/">Liquid</a>, or even apps like <a href="https://cash.app/help/us/en-us/1016-bitcoin">Square Cash</a> can scale to support any number of transactions, offering different cost vs. security trade-offs.</li>
<li>Bitcoin can settle the largest value, in the fastest time, for the cheapest cost of any network. No other payment network can settle <a href="https://cointelegraph.com/news/whale-alert-crypto-user-moves-1-1b-in-bitcoin">irreversible multi-billion-dollar transactions</a> for cents within an hour.</li>
</ul>
<h4 id="outspending-the-miners-would">Outspending the miners would allow someone to censor or stop transactions</h4>
<ul>
<li>Acquiring enough ASICs is nearly impossible. Launching a 51% attack requires not just energy but access to many ASICs that would be hard to secretly acquire without detection by producers in the supply chain.</li>
<li>No Bitcoin can be stolen, so no one would spend hundreds of billions of dollars simply to censor Bitcoin transactions.</li>
<li>The network can fork onto a new mining algorithm making all the attacker’s ASICs useless.</li>
</ul>
<h4 id="shutting-off-energy">Miners losing access to energy will stop transactions</h4>
<ul>
<li>Miners are globally distributed and use various types of energy. They can use energy simply by plugging into the power grid or by working directly with energy suppliers. There is no entity that can find and stop them all.</li>
<li>No one except Bitcoin miners can attack Bitcoin with hashpower. Even if a large number of miners can no longer use energy and hashpower drops, Bitcoin will continue to function. However, users may want to wait longer for block confirmations in case hashpower comes back online.</li>
<li>Worst case, Bitcoin could fork to use a low-energy mining algorithm. Bitcoins would still be secure on both chains.</li>
</ul>
<h4 id="miners-are-centralized-and">Miners are centralized in China and will be forced to censor or stop all transactions</h4>
<ul>
<li>Miners can switch easily between pools. Protocols such as <a href="https://braiins.com/stratum-v2">Stratum V2</a> allow miners to create blocks themselves.</li>
<li>Miners are too distributed to be all coerced into censorship. <a href="https://bitcoinmagazine.com/articles/the-sun-never-sets-on-bitcoin-mining-decentralization-continues-as-china-flounders">They are becoming more distributed</a> as they chase global low-cost energy sources, often in remote areas where they may bring in significant tax revenue.</li>
<li>Miners are heavily invested in Bitcoin themselves so they have incentive to keep the integrity of the network.</li>
<li>Worst case, the network can fork onto a new mining algorithm making all the attacker’s ASICs useless.</li>
</ul>
<h4 id="a-miner-death-spiral">A miner death spiral where less hashrate leads to price drops in a spiral to zero</h4>
<ul>
<li>The price of Bitcoin is not dependent only on hashrate, even if hashrate depends on price.</li>
<li>Hashrate trends upwards regardless of price as chips improve and miners find cheaper energy</li>
<li>If hashrate does fall, users simply need to wait longer before trusting transactions as confirmed.</li>
</ul>
<h4 id="block-rewards-will-stop">Block rewards will stop in the future and Bitcoin will lose all security</h4>
<ul>
<li><a href="https://medium.com/@danhedl/bitcoins-security-is-fine-93391d9b61a8">Bitcoin transaction fees have been steadily increasing</a> with Bitcoin’s price.</li>
<li>Block space is fixed supply. As more people demand to own Bitcoin on the base layer, but the block size stays constant the transaction fees will rise.</li>
<li>Block rewards drop every 4 years until 2140 giving the network plenty of time to adapt to observed changes.</li>
<li><em>See also:</em> <a href="#shutting-off-energy">Miners losing access to energy</a></li>
</ul>
<h4 id="governments-will-ban-ownership">Governments will ban ownership or confiscate all Bitcoin.</h4>
<ul>
<li>Governments with property rights laws are mostly treating Bitcoin like other assets. They are incentivized to tax it, not to make it flee across the border.</li>
<li>Bitcoin cannot be confiscated without permission. Bitcoin is pure information that can be stored in your head, spread between people, or moved instantly across the internet. It can be provably transferred out of your control prior to capture.</li>
<li>Real estate, stocks, and bonds are far easier and bigger honeypots to confiscate. There is nothing else to own more secure than Bitcoin.</li>
<li>The confiscation of Bitcoin will be rolled out slowly country by country allowing people to adapt. The confiscation of gold only occurred in the US. Gold prices went up in other countries where you could own it.</li>
<li><em>See also:</em> <a href="#governments-will-stop">Governments will stop Bitcoin</a></li>
</ul>
<h4 id="cannot-be-insured-unlike">Bitcoin cannot be insured, unlike bank deposits</h4>
<ul>
<li>There are many Bitcoin custodians that use insurance to cover deposits.</li>
<li>In a large banking crisis governments will have to step in to print money to back deposits which can devalue the currency.</li>
</ul>
<h4 id="is-too-complicated-for">Bitcoin is too complicated for most people to self-custody, so all the Bitcoin can be stolen from custodians.</h4>
<ul>
<li>Bitcoin UX is improving exponentially following demand, just like the early internet which went from the realm of techies to the ordinary person.</li>
<li>Most Bitcoin is already self-custodied. Attacks will be choreographed in advanced and those who see it coming or see it in other countries can move to self-custody before it happens.</li>
<li>Custodians can federate or distribute themselves across jurisdictions making confiscation impossible before coins begin to move.</li>
<li><em>See also:</em> <a href="#governments-will-ban-ownership">Governments will ban ownership or confiscate all Bitcoin</a></li>
</ul>
<h4 id="quantum-computing-will-break">Quantum computing will break the security</h4>
<ul>
<li>Quantum computing might never break current encryption. Although quantum algorithms can break ECDSA in theory, in practice it may be <a href="https://www.sciencemag.org/news/2020/07/biggest-flipping-challenge-quantum-computing">impossible to reduce the noise of a quantum computer</a> to have enough qubits to perform the algorithm. Small environmental noise like cosmic radiation may interfere with qubits so a much larger number of physical qubits with error correction are required to represent a single qubit.</li>
<li>Adding quantum-resistant addresses to Bitcoin can be achieved through a soft-fork. Work on quantum-proof cryptography is advancing much faster than quantum computers themselves, as mathematics is far easier for researchers to perform than experimental physics.</li>
<li>Even if there is surprise advancement in quantum computers, quantum computers cannot break SHA256 cryptography that Bitcoin uses for mining and protects addresses that haven’t revealed their public key. A soft fork can create a safe upgrade path to quantum resistant addresses by allowing <a href="https://royalsocietypublishing.org/doi/10.1098/rsos.180410">private key owners to sign commitments into the blockchain without revealing their public key</a>.</li>
<li>There are only <a href="https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/quantum-computers-and-the-bitcoin-blockchain.html">4 million out of 21 million coins in unsafe addresses</a>. Such coins could be a reward for a quantum computer or be soft-forked out of consensus.</li>
<li>The first quantum computers will be owned by large corporations or governments. It is unlikely such entities will reveal quantum supremacy by attacking Bitcoin first vs. other more useful endeavors. Even if they steal coins, it is in the attackers self-interest to do so slowly and secretly for maximum profit rather than risk crashing the Bitcoin price.</li>
</ul>
<h4 id="a-bug-in-could">A bug in Bitcoin could allow hackers to steal or disrupt the network.</h4>
<ul>
<li>A bug would have already been discovered, since Bitcoin is the largest honeypot in the world constantly under attack for a decade.</li>
<li>Although disruptive, Bitcoin can always fork to fix critical bugs.</li>
</ul>
<h4 id="scarcity-can-be-changed">Scarcity can be changed by the developers unlike other assets</h4>
<ul>
<li>Scarcity is more easily changed for other assets such as currencies and equity which can be issued, or commodities like gemstones or gold which can be mined.</li>
<li>No one in the Bitcoin network has an incentive to devalue their savings by increasing the supply.</li>
<li>Changing Bitcoin’s supply cap requires a hard fork, creating two chains in which users will own Bitcoin on both, so they lose no value. From there the market will decide on whether the inflated or original Bitcoin is more valuable.</li>
</ul>
<h4 id="price-is-too-high">Bitcoin’s price is too high, it’s too expensive</h4>
<ul>
<li>Bitcoin’s market cap is still very small compared to gold and is much better in function. You can buy a fraction of a Bitcoin.</li>
<li>Bitcoin can absorb savings demand from art, real estate, and other valuables.</li>
<li>Over time, the supply of Bitcoin is programmatically halved. After each <a href="https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25">halving the price increases</a>, because of supply-and-demand fundamentals.</li>
<li>As Bitcoin becomes easier to use and more liquid, new individuals and fund managers can switch to it as a store-of-value. The adoption curve of any network such as Bitcoin tends to be exponential.</li>
</ul>
<h4 id="can-be-forked-infinitely">Bitcoin can be forked infinitely which dilutes the value</h4>
<ul>
<li>A fork does not dilute the value of a user holding Bitcoin because they get Bitcoin on both forks.</li>
<li>Bitcoin forks are a feature not a bug of money. Forks allow for an evolutionary experiment in which the market chooses the better money. In fiat currencies a governance “fork” results in a war in which the losing side loses all their money.</li>
<li>After all the Bitcoin forks in 2017 the market gravitates towards a single protocol as store-of-value, namely the original Bitcoin core</li>
</ul>
<h4 id="has-no-intrinsic-value">Bitcoin has no intrinsic value (unlike say gold)</h4>
<ul>
<li>What does “intrinsic value” mean?</li>
<li>Bitcoin has billions in mining infrastructure and millions of hours of software development and writing dedicated to it.</li>
<li>Bitcoin has no industrial use, but neither does emeralds, collectible coins, digital game tokens or Picassos, but they all have value. Gold’s industrial use is tiny compared to its monetary use stored as bars or coins in vaults around the world.</li>
</ul>
<h4 id="is-a-ponzi-or">Bitcoin is a ponzi or pyramid scheme</h4>
<ul>
<li>Ponzi schemes are based on promises of income that require more and more entrants. <a href="https://nakamotoinstitute.org/mempool/bitcoin-is-not-a-pyramid-scheme/">Bitcoin cannot be a ponzi scheme</a> because there is no income, just like diamonds or gold cannot be a ponzi scheme.</li>
<li>Perhaps you mean: <a href="#is-a-bubble-like">Bitcoin is a bubble?</a></li>
</ul>
<h4 id="is-a-bubble-like">Bitcoin is a bubble like tulip mania</h4>
<ul>
<li>Bubbles can occur in all assets including fiat currencies, commodities, real estate and equities. Bitcoin continually makes new highs after each bubble bursts.</li>
<li>What makes Bitcoin different from tulips are its monetary properties–divisibility, scarcity, fungibility, portability, durability–which makes it a good savings vehicle, more similar to gold than to tulips.</li>
</ul>
<h4 id="has-no-yield-its">Bitcoin has no yield, it’s not an investment, therefore it has no value</h4>
<ul>
<li>How do commodities like gemstones, art, and gold have value? Value is decided by market supply and demand, not by yield.</li>
<li>Bitcoin is a speculative savings vehicle, not an investment in productive capital.</li>
</ul>
<h4 id="is-too-volatile-to">Bitcoin is too volatile to be in an investment portfolio or be a store-of-value</h4>
<ul>
<li>For investors with a long time-horizon <a href="https://nakamotoinstitute.org/mempool/bitcoin-is-not-too-volatile/">volatility is not an issue</a> if Bitcoin doubles in price every year on average.</li>
<li>A small cost-averaged allocation to Bitcoin would have resulted in large gains in the volatility-adjusted performance of any portfolio.</li>
<li>As the Bitcoin market cap grows, Bitcoin is becoming less volatile as more liquidity is required to move the price</li>
</ul>
<h4 id="is-manipulated-by-fraudulent">Bitcoin is manipulated by fraudulent whale and Tether trading</h4>
<ul>
<li>All markets including commodities, currencies, and equities are manipulated by traders for profit, particularly if they have a small market cap.</li>
<li>Since Bitcoin can be easily self-custodied compared to other assets, it is more difficult to manipulate or rehypothecate compared to similarly-sized assets.</li>
<li>Tether is only a small part of the on-ramps that allow users to buy Bitcoin. Bitcoin does not require Tether printing anymore than it requires central bank printing in order to function.</li>
</ul>
<h4 id="central-bank-digital-currencies">Central bank digital currencies or corporate currencies will outcompete Bitcoin</h4>
<ul>
<li>Bitcoin is scarce, uncensorable, unconfiscatible and can be self-custodied. Centrally-issued currencies are none of these and do not compete in the store-of-value niche Bitcoin and other assets fill.</li>
<li>A move to central bank digital currency does not change fiat currency’s monetary properties. It is a move towards centralized surveillance and elimination of physical cash for citizens.</li>
<li>Bitcoin allows for final settlement between rivals, making it more like a commodity than a fiat digital currency. Therefore it serves better as a reserve asset for nation-states than fiat currencies.</li>
<li><em>See also:</em> <a href="#governments-will-stop">Governments will stop Bitcoin</a></li>
</ul>
<h4 id="newer-decentralized-cryptocurrencies-will">Newer decentralized cryptocurrencies will outcompete Bitcoin</h4>
<ul>
<li>Bitcoin has the most security, scarcity, and liquidity making it <a href="https://nakamotoinstitute.org/mempool/bitcoin-cant-be-copied/">impossible to be displaced by another cryptocurrency for the store-of-value niche</a>. Centralized cryptos are easier to inflate, censor, or confiscate.</li>
<li>Many cryptos are used for speculative trading, not for store-of-value or their presumed utility.</li>
<li>Most other currencies <a href="https://cryptorank.io/ath">have lost significant value</a> compared to Bitcoin over time.</li>
</ul>
<h4 id="surveillance-regulation-kyc">Surveillance and regulation from KYC/AML will render Bitcoin useless</h4>
<ul>
<li>Regulations affect some users in some countries, but have no effect on the Bitcoin network itself. Address and transaction creation are still uncensorable on the network. No one knows who owns newly minted coins and old coins.</li>
<li>Some governments will start to focus on attracting Bitcoin rather than scaring it away. Throughout history, <a href="https://en.wikipedia.org/wiki/Offshore_financial_centre">jurisdictions that want to capture financial innovation</a> arise that offer more privacy and freedom.</li>
<li>Surveillance cannot extend onto <a href="https://www.coindesk.com/bitcoin-lightning-privacy-point-timelock-contracts-ptlcs">second layers</a>, <a href="https://www.coindesk.com/btcpay-looks-to-anonymize-bitcoin-transactions-with-payjoin-integration">coin obfuscation methods</a>, peer-to-peer exchanges, or across jurisdictions that do not share information.</li>
<li>If enough citizens around the world demand some financial privacy or choose civil disobedience en masse then regulations are unenforceable. <a href="https://www.reuters.com/article/us-northkorea-change-insight/north-koreas-black-market-becoming-the-new-normal-idUSKCN0SN00320151029">Black markets flourish</a> under even the most oppressive regimes such as North Korea.</li>
<li><em>See also:</em> <a href="#governments-will-stop">Governments will stop Bitcoin</a></li>
<li><em>See also:</em> <a href="#governments-will-ban-ownership">Governments will ban ownership or confiscate all Bitcoin</a></li>
</ul>
<h4 id="evades-taxes">Bitcoin evades taxes</h4>
<ul>
<li>Most countries treat Bitcoin as property and apply capital gains taxes just like other assets.</li>
<li>Governments regulate exchanges to collect taxes. Gold, art, and cash are easier to use to evade taxes than a public blockchain.</li>
<li>Governments can tax sales, property, and income. Not to mention print unlimited amounts of currency. Bitcoin is tiny compared to those sources of revenue.</li>
</ul>
<h4 id="fiat-currencies-cannot-collapse">Fiat currencies cannot collapse so we have no need for Bitcoin</h4>
<ul>
<li>Bitcoin can serve as a life-raft in hyperinflation, but its success as a store-of-value doesn’t depend on the collapse of fiat currencies.</li>
<li>The collapse of fiat currencies are caused by large unpayable debts because of imprudent fiscal and monetary policies, not by speculation in commodities like Bitcoin.</li>
</ul>
<h4 id="guns-and-taxes-back">Guns and taxes back fiat currencies, Bitcoin is backed by nothing</h4>
<ul>
<li>Many countries have experienced hyperinflation or large devaluations of their currencies despite every one of them having guns and taxes.</li>
<li>Gold and gemstones have held value for thousands of years despite being “backed by nothing.” Gold is a reserve asset of most central banks, Bitcoin could serve a similar function as a neutral reserve asset.</li>
<li><a href="https://nakamotoinstitute.org/mempool/bitcoin-is-not-backed-by-nothing/">Bitcoin is backed by its monetary properties</a> enforced by a massive computer network and army of developers and advocates.</li>
<li>Militaristic empires can drive demand for a currency in the form of tribute payments and taxes, but in modern liberal economies trade and monetary policy are the main drivers of currency value.</li>
</ul>
<h4 id="is-unfairly-distributed-and">Bitcoin is unfairly distributed and rewards people for doing nothing</h4>
<ul>
<li>Bitcoin is the most fairly distributed asset in the world. Many things such as land and fiat money are unfairly distributed using violence, but anyone can mine or earn Bitcoin.</li>
<li>Bitcoin is one of the first assets the average person could buy before large institutional investors.</li>
<li>Early risk-takers and contributors are rewarded in Bitcoin just like any enterprise.</li>
<li>Bitcoin earns no rents, so over time big Bitcoin holders who provide nothing of value to others will be forced to sell Bitcoin for living expenses.</li>
</ul>
<h4 id="disinflationary-money-breaks-the">Disinflationary money breaks the economy so we cannot adopt Bitcoin</h4>
<ul>
<li>Most debts are currently denominated in fiat currencies, adopting Bitcoin as a reserve asset has no effect on that.</li>
<li><a href="https://www.linkedin.com/pulse/why-do-debt-crises-come-cycles-ray-dalio/">Debt deflation crises</a> are caused by the build-up of huge interdependent debts within a centralized banking system.</li>
<li>Inflation is just another way to default on the debt, but <a href="https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio/">transfers wealth from savers and fixed-income pensioners to the rich who own real estate and other scarce assets</a>.</li>
<li>Hard money standards as occurred under the gold standard are stable if there are small periodic debt restructurings to avoid large debt build-ups. Bitcoin’s auditability and self-custody properties make it superior to gold in preventing debt build-ups.</li>
</ul>
<h4 id="theres-no-merchant-adoptance">There’s no merchant adoptance of Bitcoin so it is doomed</h4>
<ul>
<li>Bitcoin is <a href="https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-part-3-of-4-2e2c002593f1">evolving from collectible</a>, to store-of-value, to medium-of-exchange, and then unit-of-account, at which point merchants will adopt it.</li>
<li>People would rather spend deprecating fiat money than appreciating money (<a href="https://en.wikipedia.org/wiki/Gresham%27s_law">Gresham’s law</a>.)</li>
<li>Merchants will adopt Bitcoin once they no longer want to accept their local currencies (<a href="https://medium.com/@jdh/bad-money-da6bc05a5d9">Thiers’ Law</a>) as happened with <a href="http://globalcomment.com/the-venezuelan-economy-between-the-dollar-and-the-bolivar/">Venezuela and the US dollar</a>.</li>
<li><a href="https://coinmap.org/view/#/world/-8.58102122/-58.00781250/2">More merchants have been accepting Bitcoin over time</a>, particularly as new payment methods such as <a href="https://lightning.network/">Lightning</a> and <a href="https://strike.zaphq.io/">Strike</a> have made it easier to spend Bitcoin. This trend simply needs to continue.</li>
</ul>
<h4 id="is-subjective-imaginary-a">Bitcoin is subjective, imaginary, a mass delusion</h4>
<ul>
<li>All prices for goods in a market including gemstones, Picassos, and fiat money are determined by market participants, Bitcoin is no different.</li>
<li>Bitcoin is a real computer network consisting of billions of dollars of infrastructure and millions of hours of contributions from engineers, cryptographers, and thinkers from around the world</li>
</ul>
<h4 id="is-a-cult-the">Bitcoin is a cult, the people who believe in it are ideologues and maximalists</h4>
<ul>
<li>All large-scale human endeavors including companies and governments have ideological contributors.</li>
<li>Bitcoin proponents span a wide gamut from human right activists, Austrian economists, crypto-anarchists, technologists, futurists, and those just looking for speculative gains–it is hardly a dogmatic religion</li>
</ul>
<h4 id="uses-too-much-energy">Bitcoin uses too much energy, it’s bad for the environment</h4>
<ul>
<li>Televisions, aircraft carriers, and plastic junk all require energy to produce, how much energy is too much for producing those?</li>
<li>Bitcoin mostly uses energy that would otherwise be wasted or nearly free such as overproduced hydroelectric because of the competition between miners</li>
<li>Bitcoin has negative carbon emissions as well. Bitcoin makes <a href="https://decrypt.co/41618/there-will-be-bitcoin-oil-gas-cash-cow-our-feet">capturing gas flaring</a> profitable which incentivizes producers to reduce carbon emissions. Low-carbon energy projects like hydroelectric, nuclear, or renewables can be made profitable by putting excess supply into Bitcoin mining.</li>
</ul>
<h4 id="is-not-programmable-as">Bitcoin is not programmable, as useful, or functional as other cryptocurrencies</h4>
<ul>
<li>Bitcoin is designed to be the highest security monetary network, supporting general programming opens up possible security issues such as the ability for nodes to be decentralized</li>
<li>Second layers or improvements to the Bitcoin protocol can provide programmability such as RSK, discrete log contracts, and Lightning</li>
</ul>
<h4 id="terrorists-and-drug-dealers">Terrorists and drug dealers use Bitcoin</h4>
<ul>
<li>The vast majority of Bitcoin is used by ordinary people who want to save or speculate.</li>
<li>Terrorists also use cars, cell phones, and bank accounts. Tools are only as good as the people who use them. Bitcoin is not a special weapon that makes terrorists impossible to stop.</li>
<li>Hiding evidence on the blockchain is harder than hiding evidence by bribing a bank or exchanging art, gold, or banknotes.</li>
</ul>Safe Hodlsafehodl@protonmail.comI have collected all the arguments against Bitcoin along with rebuttals.Bitcoin Hardware Wallets 2020 Review2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/hardware-wallets<p class="image-title"><img src="/assets/images/wallet.jfif" alt="wallet" /></p>
<p>I’ve used the Trezor, Ledger, Coldcard, CoboVault, BitBox and evaluated their security.</p>
<p><a href="#cc">Coldcard</a> has the best security of all wallets, but takes longer to learn and use.</p>
<p><a href="#cobo">CoboVault</a> has a touch screen that’s <a href="https://www.youtube.com/watch?v=JnRjvZKulrA">easy-to-use with a phone</a> at nearly the same security.</p>
<p>These are the only two wallets that have:</p>
<ul>
<li><a href="https://en.wikipedia.org/wiki/Air_gap_(networking)">Air-gaps</a> so they don’t plug into a possibly infected computer.</li>
<li><a href="https://medium.com/cobo-vault/how-to-verify-the-recovery-phrase-created-by-dice-rolling-be86b30810c1">Dice roll</a> seed generation so you don’t have to trust their random number generators.</li>
<li>Good multisig support if you decide to go down that route.</li>
<li>Tamper-proof checks in addition to secure elements.</li>
</ul>
<p>I have no referral links and have no connection with the wallet companies. These are just my opinions. More detailed reviews follow:</p>
<table class="table-style">
<thead>
<tr>
<th> </th>
<th><a href="#cobo">Cobo Vault</a></th>
<th><a href="#cc">Coldcard</a></th>
<th><a href="#bb">BitBox</a></th>
<th><a href="#trezor">Trezor</a></th>
<th><a href="#ledger">Ledger</a></th>
<th><a href="#specter">Specter</a></th>
<th><a href="#passport">Passport</a></th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>Overall Rating</strong></td>
<td>4/5</td>
<td>4/5</td>
<td>3/5</td>
<td>2/5</td>
<td>2/5</td>
<td>Unreleased</td>
<td>Unreleased</td>
</tr>
<tr>
<td>Verifiable Seed Generation</td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Air-gap (USB not required)</td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Device validation (evil MAID-proof)</td>
<td> </td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Tamper detection</td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Secure element</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
<td>X</td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Self-destruct PIN</td>
<td> </td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Multisig co-signer storage</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Multisig receive address display</td>
<td>X</td>
<td> </td>
<td>X</td>
<td> </td>
<td> </td>
<td>X</td>
<td> </td>
</tr>
<tr>
<td>Touch-screen UI</td>
<td>X</td>
<td> </td>
<td> </td>
<td>X</td>
<td> </td>
<td>X</td>
<td> </td>
</tr>
<tr>
<td>Open-source firmware</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Open-source design</td>
<td> </td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
<td>X</td>
<td>X</td>
</tr>
<tr>
<td>Encrypted seed backup</td>
<td> </td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Electrum integration</td>
<td> </td>
<td>X</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>Specter integration</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td>X</td>
<td> </td>
</tr>
</tbody>
</table>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="cc">Coldcard - Best For Experienced Bitcoiners</h3>
<p class="image-inline"><img src="/assets/images/coldcard.png" alt="coldcard" /></p>
<p><a href="https://coldcardwallet.com/">Website</a> <a href="https://www.youtube.com/watch?v=nhg8_UK0H4k">Interview</a></p>
<p>If you want the most security features and you are tech-savvy then Coldcard is for you. The Coldcard has the best reputation among the Bitcoin community thanks to the Coinkite team pioneering advancements in hardware wallet security. Just be prepared for a steep learning curve and for a user interface that can be frustrating, at least until you master the numeric pad navigation.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Extra security features such as a clear case, device validation, and a self-destruct PIN</li>
<li>Smallest attack surface thanks to the SD card air-gap and simple design</li>
<li>Reputable team that has pioneered Bitcoin hardware wallet security standards</li>
<li>Supports dice rolls for verifiable seed generation</li>
<li>Good multisig support</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Takes a long time to learn how to use and navigate the menu system</li>
<li>Needs a computer with a SD card reader and third-party wallet software</li>
<li>Numeric pad and small screen makes user input frustratingly slow sometimes</li>
<li>Multisig doesn’t support viewing receive addresses (checks change addresses though)</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="cobo">Cobo Vault - Best For Beginners</h3>
<p class="image-inline"><img src="/assets/images/cobo.png" alt="cobo" /></p>
<p><a href="https://cobo.com/hardware-wallet/downloads?toBtc=true">Website</a> <a href="https://www.youtube.com/watch?v=ecrI6Gx6FA4">Interview</a></p>
<p>CoboVault shares most of the important security features with Coldcard, but is more user-friendly. The large Android-based touch screen feels similar to a mobile phone while providing a secure QR-code air-gap. Despite being lesser-known, the team has taken a lot of user-feedback to make an excellent device I’d recommend to anyone new to Bitcoin self-custody.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Best UX for entering seed words and passphrases thanks to the large touchscreen</li>
<li>QR codes and battery pack make a great air-gapped device</li>
<li>QR codes work with mobile wallets like BlueWallet which may be easier for novices</li>
<li>Excellent multisig support, displays multisig receive addresses</li>
<li>Has a self-destruct mechanism if it detects disassembly</li>
<li>Supports dice rolls for verifiable seed generation with the Bitcoin-only firmware</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Relatively newer wallet released April 2020 has less in-the-wild testing</li>
<li>QR codes can get too big to scan especially for multisig using a computer webcam</li>
<li>The Android-based OS is an attack surface, though the air-gap makes it unlikely</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="bb">BitBox02 - Best USB Connected Wallet</h3>
<p class="image-inline"><img src="/assets/images/bitbox.png" alt="bitbox" /></p>
<p><a href="https://shiftcrypto.ch/bitbox02/">Website</a> <a href="https://www.youtube.com/watch?v=Z-iXq9R3DYw">Interview</a></p>
<p>If you want to connect your hardware wallet directly to a computer via USB then BitBox02 is a good option, although possibly less secure than an air-gap. The multisig support makes it a nice addition to a multisig setup.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Multisig stores and verifies co-signers, can check multisig receive addresses</li>
<li>Deterministic firmware builds in case you want to verify the firmware image</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Small screen doesn’t display the entire address at once</li>
<li>Requires BitBox App to set up</li>
<li>No air-gap, no verifiable seed generation</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="trezor">Trezor Model T - Some Security Flaws</h3>
<p class="image-inline"><img src="/assets/images/trezor.jpeg" alt="trezor" /></p>
<p><a href="https://shop.trezor.io/product/trezor-model-t">Website</a> <a href="https://www.youtube.com/watch?v=tThPxvXY6a8">Interview</a></p>
<p>The Trezor Model T was a touchscreen upgrade to one of the oldest and most popular hardware wallets. However, the Trezor has some security flaws that make it hard to recommend, especially the lack of a secure element. Although the Trezor was one of the first wallets to introduce a touch screen, the Cobo Vault provides a bigger touch screen.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Oldest, completely open-source wallet helped pioneer the hardware wallet industry</li>
<li>Small touch screen provides good UX</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Lack of secure element means someone with physical access to your device can extract your seed (so you’ll need a strong passphrase)</li>
<li>No air-gap, no verifiable seed generation, multisig doesn’t store co-signers pubkeys</li>
<li>Have to connect to Trezor’s less secure web wallet software or use a command-line tool</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="ledger">Ledger Nano X - A Useability Challenge</h3>
<p class="image-inline"><img src="/assets/images/ledger.jpg" alt="ledger" /></p>
<p><a href="https://shop.ledger.com/products/ledger-nano-x">Website</a></p>
<p>The Ledger takes a USB form factor with a tiny screen and only a couple buttons. Inputting anything on the Ledger’s two buttons is painfully slow. For a much steeper price you could get a touchscreen with the Ledger Blue.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Has been an industry leader for a long time</li>
<li>Has a secure element like most other wallets</li>
<li>Fits in your pocket easily?</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Tedious to enter any seed words, passphrase, or PIN on the device</li>
<li>Closed source firmware</li>
<li>No air-gap, no verifiable seed generation, poor multisig support</li>
</ul>
<h3 id="specter">Upcoming 2021: Specter-DIY - A Promising Do-It-Yourself Wallet</h3>
<p class="image-inline"><img src="/assets/images/specter.jpg" alt="specter" /></p>
<p><a href="https://specter.solutions/shop/specter-shield/">Website</a> <a href="https://www.youtube.com/watch?v=pIpMxhlzsno">Interview</a></p>
<p>The Specter team released one of the best multisig software wallets this year. They are now prototyping a do-it-yourself hardware wallet. It’s a QR-based touch-screen device like the Cobo Vault and will of course have multisig integration with Specter. It was just released at the end of this year, so consider it experimental as bugs get worked out next year.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>Large touch screen</li>
<li>Can built by users with off-the-shelf parts to customize or avoid supply chain risk</li>
<li>Has a QR-code air-gap with a dedicated QR reader (hopefully easier to scan with)</li>
<li>Allows entropy generation with dice, picking seed words, and coin flipping</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Still very early, creators recommend only using with small amounts or in a multisig</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="passport">Upcoming 2021: Foundation Passport - A ColdCard Competitor?</h3>
<p class="image-inline"><img src="/assets/images/passport.jpg" alt="passport" /></p>
<p><a href="https://foundationdevices.com/">Website</a> <a href="https://www.youtube.com/watch?v=DFLte6GbCys">Interview</a></p>
<p>The Passport will be released in March 2021 and takes the design of the ColdCard and throws on more buttons and a bigger screen with a QR-code air-gap like the Cobo Vault. The ColdCard team has hinted they are working on a newer model in response.</p>
<p><strong>Pros:</strong></p>
<ul>
<li>QR-code air-gap</li>
<li>Will support many of the Coldcard features such as entropy generation</li>
</ul>
<p><strong>Cons:</strong></p>
<ul>
<li>Derivative of the Coldcard so might not add much code diversity in a multisig</li>
<li>Has yet to be released, will take time to be tested in the wild</li>
</ul>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<h3 id="future-of-hardware-wallets-2021-and-beyond">Future of Hardware Wallets (2021 and beyond)</h3>
<p>Over the last couple years while most of us have been watching advancements in Bitcoin protocols such as Taproot and Lightning, hardware wallets have also been advancing at a fast pace.</p>
<p>The future of hardware wallets seems to be towards QR-code air-gaps. Standards are being developed for animated QR codes to make them viable for multisig. The upcoming Foundation Passport, Specter DIY, and new Coldcards are supporting QR-codes. As hardware wallets move to bigger screens I suspect many of them will add touchscreen controls as well.</p>
<p>New wallets are supporting verifiable user-generated seeds from dice rolls. Standards around user-generated seeds could allow users to verify their seed and address generation using multiple hardware wallets.</p>
<p>Multisig support has been improving. I expect future wallets to store co-signer pubkeys and display multisig receive addresses. Perhaps by the end of 2021 the best multisig practice will be using 3 different hardware devices paired with a mobile phone using QR codes, none of them ever plugged into a computer.</p>Safe Hodlsafehodl@protonmail.comWhen it comes choosing a hardware wallet you should focus on security first.Multisig Best Practices2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/multisig<p class="image-title"><img src="/assets/images/custody.jpg" alt="custody" /></p>
<p>A <a href="/self-custody/">single hardware wallet used properly</a> will protect you from most attacks except for:</p>
<ul>
<li>Losing all copies of your seed or passphrase</li>
<li>An attacker getting your seed through coercion or theft</li>
<li>Attacks from the hardware device itself</li>
</ul>
<p>Multisig eliminates these threats since an attacker will need 2 or more of your seeds. If you lose a seed you can still access your funds. Here’s how to go about it:</p>
<p><strong>1. Choose a multisig software.</strong> <a href="https://specter.solutions/">Specter</a> is trustless and free but requires a Bitcoin node. <a href="https://bluewallet.io/">Blue Wallet</a> is a good free mobile multisig. Semi-custodial companies that hold one of your keys are <a href="https://keys.casa/">Casa</a> with a monthly fee or <a href="https://unchained-capital.com/">Unchained</a> with a fee to sign if-needed.</p>
<p><strong>2. Pick a M-of-N multisig where M is less than N, such as 2-of-3.</strong> Give yourself some leeway, a 2-of-2 requires all your backups to work perfectly.</p>
<p><strong>3. Store your seeds in different locations.</strong> This way a thief cannot steal your Bitcoin even if they have access to a single location such as your house.</p>
<p><strong>4. Backup your wallet info in all locations.</strong> Backup pubkeys from your multisig software in several locations, you’ll need them to recover if you lose a seed.</p>
<p><strong>5. Practice recovery without one of your seeds.</strong> Using your pubkey backup, make sure you know how to recover your wallet using only 2 of your 3 seeds.</p>
<p><strong>6. Avoid using devices from the same manufacturer.</strong> Do not expose yourself to risk from a single manufacturer.</p>
<p><strong>7. Use devices that can verify multisig receive and change addresses.</strong> Your hardware wallet should store all the pubkeys in order to verify addresses such as the <a href="/hardware-wallets/">ColdCard, CoboVault, and BitBox02</a>.</p>
<p>A guide on how to use Specter + ColdCard + CoboVault can be <a href="https://btcguide.github.io/">found here</a>.</p>Safe Hodlsafehodl@protonmail.comA single hardware wallet used properly will protect you from most attacks, multsig protects from everything.Building a Bitcoin Cluster2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/node-cluster<p class="image-title"><img src="/assets/images/node5.jpg" alt="custody" /></p>
<p>If you are a Bitcoin developer or tinkerer you might want to setup multiple Bitcoin nodes. Here is how I built a Bitcoin cluster with three nodes:</p>
<h3 id="1-buy-the-case-and-ethernet-switch-120">1. Buy the case and ethernet switch ($120):</h3>
<ul>
<li><a href="https://www.amazon.com/gp/product/B07D5NM9ZG">Cloudlet CASE</a> ($70)</li>
<li><a href="https://www.amazon.com/gp/product/B076HZFY3F">4-port PoE (Power-over-Ethernet) Switch</a> ($50)</li>
</ul>
<h3 id="2-for-each-bitcoin-node-buy-the-following-190">2. For each Bitcoin node buy the following ($190):</h3>
<ul>
<li><a href="https://www.amazon.com/gp/product/B07NNRTTCM">1TB Internal SSD</a> ($90)</li>
<li><a href="https://www.amazon.com/gp/product/B083ZJZGH2">SATA3 to USB3 Adaptor Cable</a> ($10)</li>
<li><a href="https://www.amazon.com/gp/product/B06XBYGL2T">1ft Ethernet Cable</a> ($1)</li>
<li><a href="https://www.amazon.com/gp/product/B07WD7HXSQ">PoE (Power-over-Ethernet) HAT for Raspberry Pi 4</a> ($20)</li>
<li><a href="https://www.amazon.com/gp/product/B07WHZW881">Raspberry Pi 4 (4 GB RAM)</a> ($60)</li>
<li><a href="https://www.amazon.com/gp/product/B083VMGDQC">SD Card 8GB+</a> ($5)</li>
<li>M3 metric screws + spacers for mounting extra SSDs ($1)</li>
</ul>
<p class="image-title"><img src="/assets/images/node1.png" alt="node1" /></p>
<h3 id="3-assemble-each-raspberry-pi-and-ssd-on-the-case-bays">3. Assemble each Raspberry Pi and SSD on the case bays</h3>
<ul>
<li>Flash the SD card with a Bitcoin image (<a href="https://mynodebtc.com/download">MyNode</a> and <a href="https://github.com/getumbrel/umbrel-os">Umbrel</a> are popular)</li>
<li>Insert SD card into Raspberry Pi</li>
<li>Stick heatsink on Raspberry Pi’s CPU</li>
<li>Push PoE HAT onto Raspberry Pi pins until fully down</li>
<li>Screw Raspberry Pi into case bay (see images below)</li>
<li>Screw SSD into case bay (see images below)</li>
</ul>
<p class="image-title"><img src="/assets/images/node2.png" alt="node2" /></p>
<p class="image-title"><img src="/assets/images/node3.png" alt="node1" /></p>
<p>Make sure you get the orientation right when mounting on the bays.</p>
<h3 id="4-connect-the-bays-in-the-case">4. Connect the bays in the case</h3>
<ul>
<li>Screw the fan into the case</li>
<li>Insert the Raspberry Pi and SSD bays into case</li>
<li>Attach the fan to Raspberry Pi (Black wire -> ground pin, Red wire -> 3v pin)</li>
<li>Connect the SSD to the Raspberry Pi with the adaptor cable</li>
<li>Connect Raspberry Pi to the ethernet switch’s PoE slot</li>
</ul>
<p class="image-title"><img src="/assets/images/node6.jpg" alt="node1" /></p>
<p>After you plug the ethernet cable in, the switch will automatically power on the Raspberry Pi. The switch needs to be plugged in and connected to your home router/modem (using port #5 on the switch).</p>
<p class="image-title"><img src="/assets/images/node7.jpg" alt="node1" /></p>
<p>The Bitcoin cluster also makes a good cypherpunk night light.</p>Safe Hodlsafehodl@protonmail.comShowcase of how to build a Bitcoin node clusterBitcoin is the Safest Asset in the World2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/safest-asset<p>History is full of events in which people lost all of their savings–natural disasters, war, hyperinflations–all of the accumulated fruits of their labor wiped away in an instant. For millions of victims there was no way to protect their savings until the invention of Bitcoin.</p>
<p>No other savings vehicle can protect individuals from:</p>
<h3 id="insolvent-custodians-such-as-banks-losing-all-your-savings">Insolvent custodians such as banks losing all your savings</h3>
<p class="image-inline"><img src="/assets/images/northern-rock.jpg" alt="northern-rock" /></p>
<p>Many custodians such as banks or exchanges lend out your dollars, gold, or other assets. If they become bankrupt, as many do, your deposits may be lost <a href="https://www.theatlantic.com/business/archive/2013/03/everything-you-need-to-know-about-the-cyprus-bank-disaster/274096/">bailing-in the bank</a>. Insurance policies may not pay out in a large crisis, at least not the full amount you expect. Bitcoin is the first digital asset you can self-custody to avoid the risks of a custodian. And even with a custodian, you can prove Bitcoin is <a href="https://niccarter.info/proof-of-reserves">allocated to only you</a> or put constraints on the custodian so they <a href="https://unchained-capital.com/collaborative-custody">can’t take your Bitcoin</a>.</p>
<h3 id="currencies-and-assets-inflate-making-your-savings-worth-less">Currencies and assets inflate making your savings worth less</h3>
<p class="image-inline"><img src="/assets/images/hyperinflation.jpg" alt="hyperinflation" /></p>
<p>Hyperinflations such as the <a href="https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html">one in Venezuela</a> can wipe out a lifetime of savings in months. Even the strongest currencies like the Swiss Franc lose significant value over the years. Scarce commodities like gold still suffer from inflation and can rapidly devalue if <a href="https://theprint.in/opinion/giant-asteroid-has-gold-worth-700-quintillion-but-it-wont-make-us-richer/260482">large deposits are found</a>. Bitcoin is the first fungible asset in the world that has an absolutely fixed supply at 21 million.</p>
<h3 id="you-lose-all-your-valuables-fleeing-a-country">You lose all your valuables fleeing a country</h3>
<p class="image-inline"><img src="/assets/images/refugee.jpg" alt="refugee" /></p>
<p>Refugees often have to leave all savings behind or have it confiscated at the border. Bitcoin is the first asset you can send to your family across the border using the internet. You can also cross the border with Bitcoin hidden in your mind. Authoritarian regimes such as the Nazis would not have <a href="https://en.wikipedia.org/wiki/Nazi_gold">confiscated the savings of minorities to fund war</a> had Bitcoin existed.</p>
<h3 id="disasters-such-as-war-hurricanes-and-fires-destroy-homes-and-valuables">Disasters such as war, hurricanes, and fires destroy homes and valuables</h3>
<p class="image-inline"><img src="/assets/images/hurricane.jpg" alt="hurricane" /></p>
<p>Many in the world do not have access to insurance, but even if they do, a large-scale disaster may not be covered by an overwhelmed insurance company. Because your Bitcoin ownership can be distributed across many locations, your wealth can be protected when you lose everything else, even your home.</p>
<h3 id="thieves-steal-your-savings">Thieves steal your savings</h3>
<p class="image-inline"><img src="/assets/images/police.jpg" alt="police" /></p>
<p>Hackers steal your identity, burglars rob your house, and <a href="https://www.washingtonpost.com/news/wonk/wp/2015/11/23/cops-took-more-stuff-from-people-than-burglars-did-last-year/">police may abuse forfeiture laws</a>. But your Bitcoin can be secured so that no one can take it without your permission. Bitcoin can protect your rights when others around you are unjust.</p>
<h3 id="you-might-buy-fake-gold-art-gemstones-or-other-collectibles">You might buy fake gold, art, gemstones or other collectibles</h3>
<p class="image-inline"><img src="/assets/images/fake.jpg" alt="fake" /></p>
<p><a href="https://www.kitco.com/ind/Albrecht/2014-06-27-Tungsten-Shield-Yourself-From-Fake-Gold.html">Gold</a>, art, and gemstones require experts with expensive equipment to verify their authenticity. Putting a large amount of your savings in fraudulent assets can be disastrous, particularly in countries with weak judicial systems. Bitcoin’s authenticity can be verified simply by running software on your computer.</p>
<p style="color:gray; font-size: 150%; text-align: center;"><img src="/assets/images/superman.jfif" alt="superman" /></p>
<p>Bitcoin is the safest asset in the world, but only if you know how to secure it. And just like safely riding a bike requires practice and equipment, so does securing Bitcoin.</p>
<p>I’ve made concise and practical guides on this site to help you secure your Bitcoin. Even if you are a Bitcoin expert, these guides may help you improve your security practices.</p>Safe Hodlsafehodl@protonmail.comFor millions of victims there was no way to protect their savings until the invention of Bitcoin.10 Rules to Avoid Losing Bitcoin2020-12-04T19:34:30+00:002020-12-04T19:34:30+00:00https://safehodl.github.io/self-custody<p class="image-title"><img src="/assets/images/custody.jpg" alt="custody" /></p>
<p>If you use a custodian to store you Bitcoin you have the following risks:</p>
<ul>
<li>Your Bitcoin might not be <a href="https://niccarter.info/proof-of-reserves">allocated to you</a> if the custodian becomes insolvent.</li>
<li>Custodial Bitcoin can be <a href="https://selfkey.org/list-of-cryptocurrency-exchange-hacks">be hacked</a> or confiscated.</li>
<li>Insurance might not cover your loss.</li>
</ul>
<p>Self-custody is the solution, but before you attempt to hold your own Bitcoin you must understand these rules:</p>
<p><strong>1. Buy a <a href="/hardware-wallets/">reputable hardware wallet</a>.</strong> Software wallets and paper wallet generators are easier to hack. If you can’t afford a hardware wallet, you can use <a href="https://www.reddit.com/r/Bitcoin/comments/kdvuh1/introducing_multisig_vaults_bluewallet_v600/">BlueWallet vault (2-of-3 multsig)</a> and split your key across 3 devices.</p>
<p><strong>2. Verify your wallet is authentic.</strong> Buy directly from the manufacturer and check for tampering. <a href="https://medium.com/cobo-vault/how-to-verify-the-recovery-phrase-created-by-dice-rolling-be86b30810c1">Roll dice</a> to generate the seed yourself.</p>
<p><strong>3. Backup all recovery information in a secure location.</strong> If your wallet dies or you forget a passphrase make sure you can recover your Bitcoin. Many people use <a href="https://jlopp.github.io/metal-bitcoin-storage-reviews">steel backups</a>.</p>
<p><strong>4. Provide recovery instructions to your inheritors.</strong> Write down instructions in a will or <a href="https://blog.dashlane.com/what-the-hack-dead-mans-switch">dead-man’s switch</a> including the location of your seed and passphrase backups.</p>
<p><strong>5. Practice receiving, sending, and recovery with your wallet.</strong> Receive and send a small amount of Bitcoin to the wallet. Wipe your wallet’s seed and see if you can restore it.</p>
<p><strong>6. Always check the address on your hardware wallet when sending or receiving.</strong> Hackers can <a href="https://techcrunch.com/2018/07/03/new-malware-highjacks-your-windows-clipboard-to-change-crypto-addresses">replace addresses</a> on your computer with their own, so double-check on your device.</p>
<p><strong>7. Never enter your seed on a computer or phone.</strong> An app or website might transmit your seed to a scammer who <a href="https://cointelegraph.com/news/community-donates-07-btc-to-phishing-victim-who-lost-entire-bitcoin-holdings">steals all your Bitcoin</a>. Only enter your seed into a hardware wallet.</p>
<p><strong>8. Only send Bitcoin to people you know are authentic.</strong> Any deal that seems too good to be true is probably a <a href="https://news.bitcoin.com/crypto-luminary-impersonation-scammers-on-social-media-raked-in-millions-in-2018">scam</a>. There is no way to undo a transaction.</p>
<p><strong>9. Double-check you own Bitcoin.</strong> Don’t trust a website to tell you that you’ve received Bitcoin, double-check on a <a href="https://www.lopp.net/bitcoin-information/block-explorers.html">block explorer</a> using <a href="https://www.torproject.org/download/">Tor</a> or your <a href="https://bitcoinmagazine.com/articles/buy-or-diy-an-overview-of-7-bitcoin-full-node-products">own node</a>.</p>
<p><strong>10. Determine the level of privacy you need.</strong> Owning Bitcoin makes you a target for extortion or theft. Keep your Bitcoin as private as you can.</p>
<p style="color:gray; font-size: 150%; text-align: center;">. . .</p>
<p>At first it may seem like a lot to remember, especially if you are new to Bitcoin, but it only takes a few hours to set up a wallet. After you move Bitcoin into your wallet there is nothing left for you to worry about until you need to move it again. Your Bitcoin will be safe from bad custodians, hackers, fraudsters, and accidents.</p>
<p>Once you have mastered using your hardware wallet, you can decide whether you want to add <a href="/multisig/">multisig to your security</a>. Multisig adds more complexity, but protects you against rare events which I recommend if you store a significant amount of your savings.</p>
<p>Over time as hardware and software improves, self-custody will become easier and these practices will change. One day, Bitcoin self-custody will be as natural as storing money in a bank is for most people today.</p>Safe Hodlsafehodl@protonmail.comSelf-custody can make your Bitcoin the safest asset in the world, so long as you follow these rules.