When you move UTXOs from an exchange to a personal wallet, whether it be a brain wallet, paper wallet, air-gapped machine, or hardware wallet, you are fully responsible for handling and storing your private keys.
Today's rag is a bit delayed due to the fact that I decided to spend my morning eating breakfast and talking Bitcoin with a couple of fellow enthusiasts. One topic of discussion that arose while I was crushing a very delicious plate of steak & eggs was the need for increased multisig adoption among Bitcoiners and newcomers alike. Right now, the UX around taking custody of one's UTXOs with a degree of acceptable comfort is not where it should be, or even close to where it should be. This is due to a list of reasons including, but not limited to; physical safety and the anxiety-inducing reality that you could simply lose the keys and access to your money forever. Not ideal.
With exchanges collecting a lot of identifying information on their users including home addresses and social security numbers, a lot of people are at risk of being targeted if nefarious actors from within or outside the exchange get access to and dump personal data. Putting you in a very real situation in which you can be targeted and harmed. This has happened recently in the Netherlands where a Bitcoin trader was identified and tortured in front of his young daughter.
When you move UTXOs from an exchange to a personal wallet, whether it be a brain wallet, paper wallet, air-gapped machine, or hardware wallet, you are fully responsible for handling and storing your private keys. This is a highly stressful situation as you are not only susceptible to someone stealing your keys but the real possibility of individual human error in the form of straight-up lost keys + backups. The thought of being able to accidentally throw out a piece of paper that allows you to recover your wealth is very frightening, and again, very real.
If we're being completely honest with ourselves, this is untenable if we ever expect to achieve widespread adoption. This is why I believe multisig solutions with improving UX like the ones being offered by Casa and Unchained Capital (being announced on Monday in Austin) are imperative as we move forward. It is my belief that multisig has been underutilized up to this point due to the technical aptitude necessary to configure a multisig setup without any UI on top of it. Luckily teams like Casa and Unchained are paving the way forward to bring better multisig solutions to the market. I am under the belief that as these solutions continue to improve from a UX and awareness perspective, they will be adopted by more and more people, helping to dissuade would-be attackers from even attempting to identify and target Bitcoiners as it would be assumed that the workload to actually get the BTC would be too cumbersome. On top of this, users will have peace of mind knowing that if they lose one key in an m of n setup there is recourse that allows them to maintain access to their UTXOs. Positive externalities all around! Now we just need to keep improving and educating. Slowly but surely.
Stomach is acting funky af right now and I would like it to stop.
Enjoy your weekend