Reminder for Everyone Who Buys Bitcoin - Not Your Keys Not Your Bitcoin
Those who do not learn history are doomed to repeat it.
Written by Sylvain Saurel - In Bitcoin We Trust
I confess that I am no longer able to know how many times I have repeated what I will repeat to you in the following article. Yet I realize that it is a necessity. I even feel that as a Bitcoiner, my duty is to constantly repeat the following sentence to everyone who buys Bitcoin:
Not your Keys, Not your Bitcoin.
It’s one of the most famous memes in the Bitcoin world, and you need to keep it in mind absolutely. I often read stories of people who are deprived of their Bitcoin because of the non-application of this golden rule of the Bitcoin Club.
You only own the Bitcoin for which you have the associated private keys
You must understand that when you buy Bitcoin, you are buying nothing more than a portion of the Bitcoin blockchain that you can only use as you wish if you have the associated private keys. Without the private keys associated with your Bitcoin, you are trusting a third party to keep your wealth safe.
So when you buy Bitcoin on an exchange platform like Coinbase, Kraken, or Binance, it is these platforms that hold the private keys to your Bitcoin. So they have the power over what you just bought in Bitcoin.
If you leave your Bitcoin on these exchange platforms, you will face the same risks as with the current banking system.
These exchanges can be hacked. You could lose all your Bitcoin. These platforms may decide to confiscate your Bitcoin for totally arbitrary reasons. Again, you will be deprived of the fruits of your labor without being able to do anything about it.
You may be a victim of unscrupulous behavior by some exchange platform founders.
The recent example of the founder of the Thodex platform is yet another reminder to all those who buy Bitcoin
The latest example comes from Turkey. The platform Thodex is “temporarily closed” since April 22, 2021, to address an “abnormal fluctuation in the company accounts” according to the message posted in Turkish on the platform’s website.
Local media reports that Faruk Fatih Ozer, the founder of Thodex, fled to Albania, bringing with him the $2 billion in funds from the platform’s investors.
A lawyer who launched a lawsuit against Ozer and Thodex explains that the platform had 400,000 users, 390,000 of whom were active. For its part, Ozer is trying to downplay the case, saying that only 30,000 users are actually affected by the situation and that reports of missing $2 billion are “unfounded”.
The Turkish authorities have issued an international arrest warrant against Ozer, but for the time being thousands of users are being denied access to the fruits of their labor.
Taking responsibility for the security of your Bitcoin should be your top priority
So this latest example is yet another reminder, if one were needed, that you absolutely must take control of your private keys to truly take power over the fruits of your labor. Bitcoin can only give you power over your future if you choose to take responsibility for your own security.
Many newcomers have the impression that it is difficult to transfer their Bitcoin to cold storage. I obviously don’t agree, but as I like to say, you don’t get something for anything in life.
The power that Bitcoin gives you over your life is worth the effort to understand how to take control of your private keys. If you don’t fight for it, you’ll miss out on the Bitcoin revolution entirely.
You may get rich with Bitcoin, but you will still be at risk from third parties as with the current system. The fruits of your labor can be confiscated or stolen at any time. If you really want to take full advantage of the Bitcoin revolution, you should go all the way and transfer your Bitcoin to cold storage so that you have the private keys to your Bitcoin.
Final Thoughts
I hope this new reminder will serve as a wake-up call to current and future new entrants to the Bitcoin world to take responsibility for the security of their wealth.
In closing, I’ll leave you to ponder this quote from George Santayana:
“Those who do not learn history are doomed to repeat it.”
It’s up to you to learn from history to avoid repeating those mistakes that may damage the fruits of your labor.
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The same thing goes for your NFT wallets!If you got into the space in WAX and made an account with WAX Cloud Wallet, you don't own the private keys! Get yourself an anchor wallet and generate the keys, you even get to customize your address from the typical '.wam' that is so commonly used. There are a number of guides on how to do this online. It's dirt cheap (around 0.4 WAX when I created mine) and secures your precious NFTs! (Looking at you Finney)
Definitely need to tell my friends about this. We all use Coinbase and I haven't really looked into Private keys until now. Thank you !