The survivor’s guide to owning bitcoin
So, you bought some bitcoin and you want it to go to the moon. There’s a lot you need to know to be successful.
Despite what you may have heard, owning bitcoin isn’t a story of overnight wealth — it’s a story of resilience. Bitcoin is designed to withstand a litany of complex technical and geopolitical hurdles, and investing in it requires forethought and security preparation.
At Casa, we help individuals, families, and businesses secure their bitcoin from a wide assortment of threats. Here are some secrets from long-term investors for protecting your bitcoin and becoming as robust as the network itself.
Withdraw from exchanges
First, we’ll start with the basics. Owning bitcoin begins with keys, the ultimate proof of bitcoin ownership. You need your keys to spend bitcoin on the network.
This is at odds with how investors, especially beginners, tend to acquire bitcoin, which is usually through exchanges. When you first purchase bitcoin, the exchange holds the key. It isn’t until you take the step of withdrawing your bitcoin onto a set of keys you control that you actually own bitcoin for all intents and purposes.
Withdrawing bitcoin is a crucial step because exchanges are subject to different security threats from individuals because they hold a lot of bitcoin. If something catastrophic happens to your exchange, you would likely join a long line of investors waiting to be reimbursed, sometimes in vain.
To last as a bitcoin investor, you need to own your bitcoin in the first place. Withdraw your bitcoin from exchanges and start holding your own keys.
Beware of accidents
The easiest way to fail as a bitcoin investor isn’t through price action or some sort of attack. Losing your bitcoin on accident is the greatest security threat of all.
As humans, we tend to overestimate external threats and underestimate internal threats, such as simple forgetfulness. Since the early days, investors have lost an astonishing amount of bitcoin with estimates ranging as high as 4 million bitcoin.
There are many ways to lose bitcoin by accident. For instance, a person can misplace bitcoin in a move, throw a device away on accident, or delete a key stored on a phone. If your bitcoin is subject to a single point of failure, your bitcoin is in harm’s way.
If you’re the type of investor who prefers to buy and hold, you’re also likely to set and forget. Don’t suffer a 100% loss. Pay close attention to your bitcoin and any hardware wallets you use to hold it and maintain a healthy backup.
Go incognito and use privacy tools
Once you’ve assumed custody of your keys and distributed them effectively, it’s important to stay vigilant about passing security threats, and your lifestyle can have a major impact on your security.
To start, don’t discuss your bitcoin with strangers. If malicious actors don’t know you have bitcoin, it’s a lot harder for them to target you. “Security through obscurity” can be a helpful way to enhance your protection, but don’t rely exclusively on that strategy.
If you’d prefer to be active in the bitcoin community, it’s fine to attend bitcoin meetups and conferences so long as you keep your wits about you and adhere to savvy security practices. Security is about tradeoffs.
As most of our lives migrate online, it behooves us to be mindful about the information we share and take steps to minimize the attack surface. There are several tools you can use to reduce your digital footprint, such as one-time burner email addresses and VPNs.
When you invest in bitcoin, you invest in the prospect of being your own bank and assume responsibility for your wealth. Take that responsibility seriously and you can make a robust security setup even stronger.
Avoid phishing. Go straight to the source.
If hackers and thieves can’t find you, they will try to get you to come to them through some sort of deception. Phishing is a common attack where someone attempts to trick you into disclosing sensitive information.
The word sounds like “fishing” because it’s a similar waiting game for bad actors. They cast a wide net across many potential victims and wait for someone and take the bait. This frequently comes in unsolicited email or direct messages on social media. Scammers have also been known to use search ads to lure unsuspecting victims onto spoofed versions of legitimate websites.
The defense against phishing is simple: don’t trust, verify. Avoid clicking links from people you don’t know. Go directly to websites for important accounts via bookmarks or typing them manually. And never type your seed phrase into a computer.
Apply this same vigilance to transacting with bitcoin. Double-check bitcoin addresses before sending a transaction, and feel free to send a test transaction with a small amount for peace of mind.
Ron Stoner
Cultivate a legacy plan
Bitcoin is built to survive. If you’re bullish on bitcoin’s potential, it’s reasonable to think that potential extends beyond one lifetime alone. No one likes to reflect on his or her mortality, but preparation is crucial and the hallmark of a strong legacy.
A significant portion of lost bitcoin has come through a lack of succession planning. In some cases, the deceased was the only one with knowledge of where private keys were stored. The absence of clear communication can be devastating.
The good news is it’s easy to ensure a smooth transition for your wealth. Inheritance and legacy planning put families and loved ones at ease, and Casa has several tools to help you define a thoughtful legacy plan for you with respect and thoughtfulness. Our shared accounts are an excellent primer for securing bitcoin as a family, and our inheritance plans provide a valuable framework for comprehensive succession arrangements.
Security is everyday but bitcoin is forever. With a proactive mentality around your bitcoin, your legacy can survive and thrive for generations to come.
The Services are a platform for managing cryptographic keys and nodes. The Services are not an exchange for buying, selling, or trading digital or virtual currency or assets (an “Exchange”), and Casa is not a bank or other financial institution. The Services do not and cannot sell, hold, invest, send or receive money or cause or effect any digital or virtual currency or asset transactions. BY USING THE SERVICES IN ANY MANNER, YOU ACKNOWLEDGE AND AGREE THAT (A) CASA IS NOT IN THE BUSINESS OF PROVIDING FINANCIAL, LEGAL, TAX, ACCOUNTING, OR INVESTMENT ADVICE OR SERVICES, (B) NONE OF THE SERVICES ARE INTENDED TO PROVIDE OR CONTAIN ANY SUCH ADVICE OR SERVICES, AND (C) ANY AND ALL SERVICES ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY. Casa urges you to consult a qualified professional for any such advice or service.
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Jameson Lopp