{ "episodeId": "SLP629", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "stephan_livera": { "name": "Stephan Livera", "role": "guest", "tag": "STEPHAN" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.24, "text": "Imagine the level of stress you'd have if you bought, like, some BTC, you forgot it on your phone app, and, you know, it was worth a thousand bucks, and now it's worth a million bucks, and, you know, that phone app doesn't have backup. Maybe you'd change phones, and you can't find the old one. Everybody in the early days of Bitcoin lost money that way. Always protect your BTC as if it was ten times today's value, right? Because you will move that much in a blink of an eye. I think Bitcoin gives Humanity finally the power to remove counter parties, to remove permission, from transaction, and, and I believe that if you can drive, you can self-custody" }, { "speaker": "stephan_livera", "time": "00:54", "start": 54.43, "text": "Hi everyone, welcome back to Stephan Livera podcast brought to you by Bold. For American listeners, go to getbold.io, you can buy Bitcoin there. And today rejoining me is my friend NVK, the co-founder and CEO of CoinKite. Welcome back to the show, NVK. Thanks for having me. It's been a while. Yeah, been a little while, and, I thought, well, hey, it's, we're in the, probably the, I don't know where, but it's, you know, we're in a bull market, and I thought it's, a good time to refresh on some of the, the basics of Bitcoin self custody. I think, it's been a little while since we did kind of a basics level episode, and so, yeah, let's just start with a few things For most people, they might be thinking, \"If you're new, why, why do this? You know, can't we just leave this to the professionals?\"" }, { "speaker": "stephan", "time": "01:40", "start": 100.12, "text": "You know, it's kind of like, it, it's been, it's been probably a year, like we've been doing this almost like yearly now, right? Because, you know, like the, the, the, the Twitter narrative and the sort of like the, the new people come in, like there's always a new wave of users, and, and the, the, the self-custody message sometimes gets lost There's a lot of, FUD on it. There's a lot of, I mean, you know, it's like the message gets diluted, people are more interested on the, on the number go up, a-and they forget about, you know, the, the biggest feature of Bitcoin, which is, you know, not your keys, not your coins. So like, you know, what's the point of having Bitcoin gains, you know, if the exchange rugs you, right? or if they decide you're not allowed to withdraw? And, you know, it, it goes back to that analogy of like Bitcoin has two upsides, right? Two major upsides. one is non-debasement, right? So nobody's gonna print away what you work for. and the other one is, you know, it's, cust- it's, it's ownership of your money, right? Like, i-it's, it is yours, right? Full ownership." }, { "speaker": "stephan_livera", "time": "02:47", "start": 167.14, "text": "So you get the choice to when, when you wanna send it, if you wanna send it, this kind of thing. Whereas Home, there is always that risk that they say, \"No, you're, you're not allowed to send this, or you're not allowed to make that transaction.\" No, and that's very common, right?" }, { "speaker": "stephan", "time": "03:00", "start": 180.23, "text": "People walk to the bank and say, \"Hey, I, I wanna empty my account.\" Like, \"No.\" Why? Well, they say, \"Why do you wanna, why do you wanna take your money out, right?\" Like, and then eventually they do get the money out, but like, you know, like, what, what if you wanted to, to move that day" }, { "speaker": "stephan", "time": "03:20", "start": 199.63, "text": "And, you know, God forbid, you know, like your government doesn't like you anymore, right? I mean, we saw that with the truckers, in Canada. And, and, and it's, it's super important to maintain that. And, and with that, you're also making Bitcoin sort of work, right? If the majority of the people don't self-custody, if the majority of the Bitcoin in, in, in the wild aren't, independently owned, you know, Bitcoin goes to zero. Braceways." }, { "speaker": "stephan_livera", "time": "03:47", "start": 226.61, "text": "So in your mind, when you are talking about self custody, who is your, let's say, target audience? Like, is there a certain threshold above which, if you hold above this amount of Bitcoin, okay, now it's time you need to learn? Or what's your target audience here?" }, { "speaker": "stephan", "time": "04:02", "start": 242.48, "text": "I, I think it's like, it's everyone, but everybody is in a different timing. Right? And everybody has sort of like different pockets and different risk profiles. So it's very important that, like, you know, there is no sort of like, blanket way of doing this, right? Like it's not just like, you know, one solution for everybody. A-and, and I think- People get stuck on that conversation on, on Twitter, often. It's like, no, no, no, no, you can't do this, you have to do that. No, no, no, no, you can't do this, you have to do this other thing, right? And then, and then people get scared, right? It's like, you know, and, and, you know, people learn at different pace. Like Yeah. long story short, it's like if you, if you're, you know, if you're, if you're gonna drive, right? You don't take your car into the highway, right? Like, you, you learn in a parking lot, right? Like, you know, and then you take it to the side roads, right? And then eventually you get there, and then eventually, you know, you're a sovereign driver, right? And, and, you know, you never wanna lose that, and everybody learns how to drive. I mean, it's very rare you Right? Unless you live in a big city, but then, you know, then COVID happens and then you don't have a lot of subway and you have a QR, right? Like, i-i-it's, it's very similar principle. So, so the point is, I think people, people learn about Bitcoin, right? And, increasingly people learn about it and they go and they buy e-either an ETF or, or MicroStrategy or something like that, which, which are very good financial products, right? Like, I, I mean, I'm not gonna vouch you, you never know tomorrow, but the, the point is, as they look today, they're very good financial products for to make money, right? But they're not Bitcoin. they, they don't give you any sovereignty, like you have to, you know, essentially like ask your broker to transfer the ownership of those shares to another broker or to yourself. so, so like, you know, great, you came into Bitcoin, you understand the economics of it, you bought some of that stuff, right? 'Cause you believe in the upside of it, but you don't have Bitcoin, like any, zero." }, { "speaker": "stephan_livera", "time": "06:07", "start": 366.88, "text": "yeah. And so I guess this is an important point we should make as well, just to clarify for people, what are the different, let's say, forms of Bitcoin? Now, of course, the best form is self custody, but there are others who maybe they've bought an ETF, whether that's iBit or FBTc or the various different ones, or maybe there are people who have some proxy like MicroStrategy, or there's, you know, Bitcoin that's held on some kind of custodial exchange or custodian, and then maybe there are other platforms where you can kind of buy Withdraw it. So can you just explain a little bit on that?" }, { "speaker": "stephan", "time": "06:39", "start": 398.64, "text": "Yeah. So essentially, like when you're buying MicroStrategy, you're buying stock. That's it. It's like buying Coca-Cola. It's just that, you know, Coca-Cola decided to buy Bitcoin. Like that, that's really the only thing you're getting, right? It, it-- Again, fantastic product for you to make money, but it has nothing to do with Bitcoin in terms of like the actual asset, the actual, bearer instrument, right? same with ETFs, right And, and I, I do believe that is the great majority of newcomers to Bitcoin are buying those financialized products, right? They're not, like, that's the great majority. That's why it's so important, and I'm bringing this more up than I am bringing even talking about the actual self-custody of it yet. So like the people listening to your show, if they're new, they probably bought the ETF or MicroStrategy, right? So, okay, that's great, fantastic, you have some of that in your retirement account or whatever, right? So now let's talk about Which is this incredible, asset that it's digital, it's, so it's better than gold, right? It's divisible and everything. it is bare instrument, so if you have the keys, it's yours. all you have to do is, you know, in theory, just remember twelve words in your mind and it, you can travel around the world naked and they go with you, and nobody can take it from you. Right? and it is counterparty free. There is no counterparty. Right? So, I, I, the ETF and, and, and, and MicroStrategy, they're not even close to any of the things I'm talking about. So let's say, for example, you buy on an exchange, okay? Now you actually own Bitcoin, but they're not yours yet." }, { "speaker": "stephan_livera", "time": "08:20", "start": 500.13, "text": "Right. It's the difference between, possession and title, right? Like you may have the title for it, but do you not have the-- you only have the possession if you have the Bitcoin withdrawn to an address where you hold the private keys, right? That's" }, { "speaker": "stephan", "time": "08:31", "start": 511.14, "text": "kind of the thing. Exactly. So, you know, this target market normally is like Coinbase, you know, like it's like people go to Coinbase, right? That's way more-- that's way closer to Bitcoin than, than an ETF is, right? I-i-it's like night and day difference, okay? So you" }, { "speaker": "stephan", "time": "08:50", "start": 529.97, "text": "Huge improvement, right? But now you have counterparty risk. That means if Coinbase goes away, you know, your Bitcoin is gone. If Coinbase doesn't want you to ex- to, to take the money anymore, you don't have it, right? So what you do is next, on the next step on this is, okay, great. So I own some Bitcoin on Coinbase, fantastic. So my recommendation is go, get yourself a phone wallet, right? there's many. I, I tend not to say the names specific to, like, projects on, on shows because people listen a year later and they may not be around or whatever, or they may not be good anymore, but point is, you get a good phone wallet. I, I maintain this website called Bitcoin Security Dot Guide and- My update there, what I believe personally are sort of reasonable choices. So essentially, you take, you take a phone app, let's learn how to drive in the parking lot. And you, you, you set up the phone app, you withdraw, you know, like spending money, say twenty bucks worth, right? You put on the, on the phone wallet. You know, you spend it here and there, you pay for a thing. You know, you learn how to do the backup. You know, maybe it's a seed backup, you learn how to do the seed backup. You know, you, you, you learn how to like move back and forth and recover from backup. You know, you get comfortable, right? You're driving in the parking lot, like, and, and you're building that confidence. One of the most important things in self-custody is confidence. Why? Because it's a high responsibility activity, right? So self-custody is high responsibility activity. It's about taking responsibility for your funds, right? The same way you take responsibility for your family while driving in the highway. Right? So, you know, you go, you do this, and, and now you're like, okay, great, you know, like, I kinda get how this works, I kinda get how backups work, I see that, like, I can just change, I can even change phone wallets because I can just put the seed in the other one," }, { "speaker": "stephan_livera", "time": "10:48", "start": 647.99, "text": "right? Right. Actually, this is probably a good spot we should just explain this concept or, maybe I'll give a quick explanation. This is how I explain it. Please go, yeah. When I'm talking, let's say I Hold Bitcoin, right? It's about holding the private key for that Bitcoin. What are Bitcoin private keys? You can think of it like it's a massive, massive, massive number. And what, what you're doing is like your phone, as an example, or your device is generating this massive, massive number, and it can represent that massive number in twelve or twenty-four words. And then that twelve or twenty-four words is, think of that like your master private key. And so without kind of going too much into the detail, the basic- The big idea of Bitcoin, using kind of the cryptography of it and so on, is that they've set up these standards where using those same twelve or twenty-four words, you can like take it out of one device and put it into another and it will recover the same coins, or it will let you spend the same coins. And the way, you know, they've set up the transactions and everything in Bitcoin is that you're Software or your hardware is signing a message that proves to the network, yes, NVK or Stephan, he correctly holds the private key that allows him to sign a correct, valid message, which is a valid transaction, and therefore you're allowed to spend these coins. you're just changing" }, { "speaker": "stephan", "time": "12:14", "start": 734.47, "text": "ownership. It's like going to the central office where they have titles for real estate and say, \"Hey, you know, like, look, I have this proof that I own it. I'm assigning ownership of this to this person.\" The next person I just sold it to, right? That, that really is how Bitcoin works. It's just changing title, and, and it's a cryptographic title, right? Right." }, { "speaker": "stephan_livera", "time": "12:36", "start": 755.84, "text": "And so then, that's the kind of the key, key thing is that is the, those twelve or twenty-four words, that's the absolute you must keep that secret and you have to protect it, right? So this is something I often struggle to communicate or convey to people, maybe it's, you know, because they're new, sometimes they struggle with this concept, but you need to really treat that So meaning, never put that into a password dev- manager, never type it into an online computer, never take a photo of it, never tell anybody, even if they tell you they are tech support, like it's very, very important that you keep this secret." }, { "speaker": "stephan", "time": "13:08", "start": 788.43, "text": "Why? The why, the key is why, right? So phones and computers were never designed to hold secrets that cannot be reversed. Okay? Because see, like your, your money in a bank, it's just an entry in a database. If, if your, if your, if your bank gets hacked or something, you know, they have to essentially reassign to you an amount. With Bitcoin, it has finality. Right? Nobody can ever reverse that transaction, so there is no backsees. And, and the secret is kind of like the secret is the money, let's put it this way. And so don't lose the secret, don't expose the secret. The computer isn't a good place to keep secrets, right? Like you see all the celebrities having their, their nude pictures out in the wild, right? Because again, the computers, the phones, the cloud, it's all backdoored, it's all being exploited because it's out there, you know? There is a lot of incentives for governments to have backdoors, and, and these backdoors get exploited by bad guys trying to, you know, steal a celebrity naked picture to sell to a newspaper, right? Like, think about it that way, right? It's not even nefarious or crazy conspiracies, it's just basic economics, right? So you have these devices that aren't designed to keep secrets, like computers, Raspberry Pis, phones, they're just simply not designed for that. And, you know, given enough effort, they're gonna get broken into. So this is why the secret, the bare secret, which is the twelve words, tends to go into a seed plate, a metal plate, where you mark it with, with like a, a metal punch or something. Why do we do that? You know, through a lot of market and said stories, we arrived at a, an incredibly simple method, right? That is quite like resilient, right? To, to resolve this problem, which is like the, the unencrypted secret should be Not on an electronic device, especially one that's connected to the internet, so nobody can take it remotely, right? you know, the majority of the people lose their things because their house catches on fire. So like, and that's obviously a topic of right" }, { "speaker": "stephan_livera", "time": "15:20", "start": 920.41, "text": "now with the LA, the Palisades fires." }, { "speaker": "stephan", "time": "15:23", "start": 922.61, "text": "Exactly, right? So if you have it in a, in a quality metal plate, like the likelihood, is anything possible, no, but like the likelihood of that Plate burning is very low, right? Especially if it's kept somewhere like appropriate in the house, very unlikely to burn, right? So you survive that. so like, you know, so now you have a secret that is backed up, it's like, you know, like low, critical risk, right? and so now all you're trying to do is just keep it from the view of anybody else, right? Like that's, that's a very good place to be in already. it's better than anything else that's available out there for, in" }, { "speaker": "stephan", "time": "16:04", "start": 963.58, "text": "so then what do you do? Like, how do you sign transactions, right? Like, how, how do you, how do you transfer the money, right? Well, then we get into hardware wallets. What are hardware wallets? They are very simple little devices that are designed to keep secrets. So, you know, a good hardware wallet, you know, it's, it's not gonna be connected to anything, including USB, right? Because again, you don't want anything connected to it, right? Because then there's less risk of being stolen. and they're very resilient to at rest attacks. So if somebody finds them on your desk, which probably shouldn't keep it there, but if you find it on your desk, you know, it's gonna be very hard for them to get the secret out, right? So for example, phones You know, there, there is these machines that, you know, border security uses or, you know, dictators use it. Like for example, Pegasus is one brand where they stick a, a, you know, like a cable in your phone, they copy the memory, they decrypt it later, right? And they are very successful at it, it's amazing. same with computers, right? It's very hard to keep this stuff secure at rest. So what do you do? You know, use a hardware wallet. We make Coldcard, arguably one of the best in the market, and, you know, like we have a bunch of explanations on, like, on why and how, and, you know, that's the methodology that we use. They are air-gapped. they have very, various types of pins and things that help you stay protected, right? So, but then how do you use these devices if they don't have internet? Right? If they don't have connections to anything, well, you use a wallet. A wallet is never the hard wallet, the hard wallet is just a signer. It's just a place where you keep your key to make signatures. So, you know, you have a, a desktop wallet, so essentially like a piece of software on your computer, kind of like email, you know, or, or on your phone. That, that has, you know, very secure means of exchanging information with the hardware wallet to make that signature. You know, this kinda sounds a little complicated, but there is a million guides out there. Stephan has great guides out there. It, it really is like, once you acquire that phone wallet, parking lot knowledge of driving Bitcoin is, is, is very easy. It's like a five, ten minute sort of like setup, of the hardware wallet." }, { "speaker": "stephan_livera", "time": "18:28", "start": 1107.95, "text": "Back to the show in a moment. This show brought to you by CoinKite dot com, the creators of the best Bitcoin hardware security devices, such as the Cold Card Mark IV and the new Cold Card Q. Now, we use Bitcoin hardware security devices to keep our keys offline, our private keys offline. Now, the way these work is you can do that setup Up, write down your twelve or twenty-four words on the, the seed word cards and keep that secure. Now you can use this device to interact with the Bitcoin network using software such as Sparrow Wallet, Electrum, or Bep20 or Nunchuk as a few examples. Now you have a range of security features that you can use with these devices such as passphrases, you can use seed XOR, or my favorite is multi-signature. Now if you're starting in a basic way, just start with the device and And the USB-C cable, plug it directly to the computer and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be, scared away, they are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com, use code Livera to get a discount on your cold card. The lead sponsor of this show is Bold, the best place to buy Buy, sell, and save Bitcoin. For listeners in the US, Bold lets you secure your financial future with complete peace of mind by integrating a low fee Bitcoin only brokerage with next gen multisig vaults. With Bold, you can smash buy Bitcoin or set a DCA plan for only zero point nine nine percent fees and seamlessly deposit the Bitcoin direct to your Bold vault. The Bold vault is a two or three collaborative multisig where you hold two keys and Bold holds one as a redundant backup protecting against loss or theft. You can use Trezor, Ledger or cold card hardware wallets to spin up a Bold Vault in just a few minutes, and the Bold Vault is the only collaborative custody vault available with zero monthly fees. They're also offering zero fees on your first ten thousand dollars of Bitcoin buys and twenty five dollars of free Bitcoin when you buy a hundred dollars of Bitcoin or more. Try Bold today and upgrade your stacking experience over at getbold dot io. And now, back to the show. Yeah, and I'll just point out here that it's one of those things where once you've seen a YouTube guide, you kinda, you kinda know, like once you've You sort of know, oh, okay, this is how they do it. Like basically, what I, I, I like to call those like a coordinator application. Yeah. And so that's like Sparrow, Electrum, Nunchuk, and there are others out there, Keeper, and probably others that I'm forgetting. but the point is, you use this coordinator app to sort of- Make the tran-- to craft a transaction, but you use the actual device to sign that transaction. So the idea is that you sort of keep the-- that the coordinator app is online, hot, you know, connected, and obviously the hardware device is an offline device. It's just the" }, { "speaker": "stephan", "time": "21:23", "start": 1283.24, "text": "okay. It's just the okay. It's the one that gives the okay for the transaction to" }, { "speaker": "stephan_livera", "time": "21:28", "start": 1287.92, "text": "happen." }, { "speaker": "stephan", "time": "21:29", "start": 1288.72, "text": "Right." }, { "speaker": "stephan_livera", "time": "21:30", "start": 1289.58, "text": "And so then the way you can use those coordinator apps is you can use those to, let's say, manage your balance to sort of, okay, this is how many- Many coins or how many Sats I have or whatever, and I wanna send a transaction to this address BC one, blah, blah, blah, blah, whatever. I wanna send zero point o one BTC or one million Sats to this address, and then at that point it will sort of say, \"Okay, you need to give me a signature,\" and then at that point that's where you need to bring in your hardware device and do that signature, which is the, the OK." }, { "speaker": "stephan", "time": "22:00", "start": 1320.42, "text": "I think you brought a good, a good point there with the amount. So The, you know, you-- most people who use Bitcoin, they don't have just one wallet or one signer, right? So they'll have, for example, a phone wallet that they have spending amount of money. Maybe they have like a few hundred dollars there. You know, it is less secure than a hardware wallet by, you know, a, a factor of a thousand, but- You know, it's good enough for you to have five hundred bucks that you travel around and you can just buy things with it or spend with it or send it to friends or gift it to somebody, right? And you have that money in the, in the, in this phone wall for that. and then, you know, maybe, maybe you're in business, right? And you actually have to send and receive slightly bigger amounts. So, you know, maybe you have a hard wallet that is like, you know, your hard wallet that doesn't have all your savings on it, but has enough for you to operate your business, right? And then you have your super cold, super deep away from you. Because remember, every time you're capable of signing, you are at risk, physical risk, right? So this is why it's so important that, you know, you have a deep Right? So if somebody takes your phone from you in the street and, you know, like, send me, you know, give me your money, you know, you put the, this special pin that shows last or something, right? You know, on Coldcard, you can make it erase the seed, you can make it, you know, look like you need more time. There's all kinds of things you can do. But we're not gonna get in the, the weeds on this one. But the point is, you need options to design your, your signing security around your needs. Everybody's" }, { "speaker": "stephan_livera", "time": "23:32", "start": 1411.89, "text": "Yeah. Okay, so I'll summarize that as like, you know, as, as we're saying, there's no perfect, there's no one thing, it's, it's more like there's trade-offs, and you choose what's the right approach. And so in practice, what do people do? They might have a small amount on their phone, as you said, a couple hundred dollars, and that's very accessible. But it's obviously less secure. And then you might have, you know, a single signature setup that's kind of, you know, just for day to day, larger value, but not quite your life savings. And then maybe you've got some more advanced setup which is not as accessible, and maybe that's in different locations and so on. We'll get into that later. But that's like the, you know, the life savings in multi-signature in different locations with, you know, way more, security around it, and so you might have multiple setups that you were using, Use the right tool for the job based on what application, what thing are you trying to do? Are you just trying to buy a coffee using the Lightning Network, or are you trying to maybe make, take, make or take a payment that's, you know, multi-thousand dollars because it's like your pay for the month or whatever? Or are you, you know, are you buying a house and you're doing like that kind of transaction? Okay, now maybe you need to go to that more very advanced setup, that kind of thing." }, { "speaker": "stephan", "time": "24:43", "start": 1483.27, "text": "I think that's perfect, like what you" }, { "speaker": "stephan_livera", "time": "24:46", "start": 1486.19, "text": "Yeah, so in practice, that's what people might be doing. And so now, obviously, you know, my pod-- you know, no, no, no hiding anything. My podcast is sponsored by CoinKite, Coldcard is my favorite. But do you have any tips for listeners, just in general, on how to pick a good hardware wallet? The hardware signing device." }, { "speaker": "stephan", "time": "25:07", "start": 1507.0, "text": "I, I think it's very important to sort of like understand that, you know, every single device has trade-offs, right? We believe in security first, right? That, that's, you know, I'm extremely biased on that. It's like we made it for ourselves, you know, we, we want to have that kind of peace of mind, right? and, and I, I-- So for example, price is definitely not one of them, right? Like, don't, don't pick something just because it's cheaper. Like, it You know, it's like you buy a, like a Ferrari, right? A-and, you know, like you don't put it in a garage, right? Like don't cheap out on, you know, especially once it" }, { "speaker": "stephan_livera", "time": "25:45", "start": 1545.38, "text": "gets to a certain level of, savings. No, but it's like, you know, if you can't afford," }, { "speaker": "stephan", "time": "25:49", "start": 1549.29, "text": "like, think about it this way, if you can't afford a hardware wallet, you probably don't have enough Bitcoin that needs a hardware wallet. I mean, yeah, I think that's fair" }, { "speaker": "stephan_livera", "time": "25:55", "start": 1555.11, "text": "enough. I mean, depending on how much you've you know, if we're talking in the couple hundred dollar range, I think it's a very small, and that's" }, { "speaker": "stephan", "time": "26:10", "start": 1570.04, "text": "most of the" }, { "speaker": "stephan_livera", "time": "26:11", "start": 1570.52, "text": "hardware wallets" }, { "speaker": "stephan", "time": "26:11", "start": 1570.96, "text": "are in that price range, are between a hundred and, and two hundred dollars, right? So essentially like you can afford them. So, and then I think you have to really look into like what are the trade-offs, right? you know, some are USB only, right? So you don't get the advancement of, of air gap, right? That means the device is connected to another device, so, so there is like" }, { "speaker": "stephan", "time": "26:35", "start": 1594.98, "text": "You need to call a server, right, in order to unlock itself, right? So now you're dependent on a third party." }, { "speaker": "stephan", "time": "26:43", "start": 1603.3, "text": "you know, but maybe they're like easier to use, right? Like, e-e-but then now you're like, you have a third party problem, right? and then you have wallets that offer to back up your seed for you, right? That's super scary. you know, I used to recommend one of them, before they added that feature, but like, you know, I just can't in good conscience recommend that anymore, so, so there is, i-i-it's hard for me as a manufacturer, right, like who have very strong opinions about these things to really like recommend like different devices out there. I do, I do think seed is a superpower, like I do, I do prefer devices that support seeds, that" }, { "speaker": "stephan_livera", "time": "27:21", "start": 1641.43, "text": "give you the twelve or twenty-four words that you write down and you keep it secure, as opposed to kind of, it's all in the background, you never see it kind of thing. Now, there's trade-offs to that as well, because maybe someone could argue, okay, Journey of self-custody. Yes. And okay, as long as they" }, { "speaker": "stephan", "time": "27:37", "start": 1657.16, "text": "move, that's the key, right? Like, I, I, I think as long as, as long as," }, { "speaker": "stephan", "time": "27:46", "start": 1665.72, "text": "I, I, I want like, my main thing with Harder Wallet is like, is your marketing honest, right? Like, are, are you like, are you working for Bitcoin or are you working for yourself, right? Like, you know, I like to believe I work for Bitcoin. So like, like I want Bitcoin to win. Before my company, right? And I think, I think it's amazing to have devices that are like, you know, like idiot-proof, right? So no foot guns. they will come with compromises, like, you know, you have to trust the vendor. Like it's not like trust minimised, it's like full trust on the vendor, right? you can't just move the seed to another vendor, right? You have to actually like do this whole convoluted process to get the money out and transfer it to another one, right? So you're gonna lose privacy on that. you lose privacy by using the vendor infrastructure, right? There's other things you lose. A-a-as long as you're, you, you pick these easier to use devices, and you have in mind that this is a stepping stone, this isn't BTC, I, I think, I think it's okay, I think it's great. Like it's much better to have somebody using a seedless device with no screen or anything like that than using Carl Schuhb. With your ETF, like no compares." }, { "speaker": "stephan_livera", "time": "29:00", "start": 1739.75, "text": "Right, and so yeah, I think that's, that's an important point. That generally speaking, I encourage self custody. Of course, Coldcard is my favorite, but generally speaking, I want people to self custody, and so, you know, use a reasonable hardware wallet, ideally, in my view, something using a secure element, ideally with a screen, ideally where you can maintain the seed yourself, and that gives you the ability to sort of take it out of one device and put it into another, and then- Ob- obviously other features a-above and beyond that are great, but, you know, you have to pick because there's no one perfect kind of answer, you just have to choose your trade-off. So I think that's probably a good spot to finish on the, on, in terms of which hardware device. Now, do you have any tips in terms of- Setting up and operating that hardware device." }, { "speaker": "stephan", "time": "29:48", "start": 1787.53, "text": "Oh, absolutely. I mean, you know, like, we, we like, you know, in cryptography, we like to call, like, key, key generation a key ceremony. Right? It's a very important time and, and place you're, you're generating your secret, right? So when you're doing that with a hardware wallet, you know, we recommend you do it in a, in a place that is, you know, like not open around, right? You know, there, there's no like open windows or something, cameras, yeah. There's no cameras. Remember, your TV has a camera, your house, like everybody has cameras everywhere, right? Like, so like, you know, take that seriously, you know? Go to a place that's like" }, { "speaker": "stephan", "time": "30:26", "start": 1826.4, "text": "We don't recommend people use, QRs for seeds, right? Because QRs are designed for cameras to read. So if you have any camera around the house, like, you know, and you accidentally flash that QR, like, it could be swept, right? Like, you know. home cameras are full of malware, right? And, and, and bad guys are actively searching for those things. So like, you know, just take that seriously, right? Like, use a quiet space, you know, do your key ceremony there. And get that set up. So, so that's, that's a big one. you know, security hygiene is, is a very good thing, right? So for example, you know, if you're dealing with a lot of money, maybe have a different computer that you use to coordinate the transactions, right, than your main computer, right? 'Cause your main computer, you know, is full of stuff. Like, it's full of things, it's impossible to like really keep track of, of what's going on in there. you know, you, you might have a You have malware, right? Like, you know, like, you know, a-and-and these things do happen. So, so like, there's two things you need to keep in mind. One is the, the, the, the secrecy of your secret, like the secrecy of your seed, very important. You cannot break that secret because if you break that secret, the money's gone. and the other thing is privacy. Right? So you don't want to leak any, transaction detail to anybody, right? So 'cause then people can look up and try to figure out how much you have, right? So, and if people don't know how much you have, like, you're probably at less risk of, of attack, right? So, you know, so I have this other website, I can't remember the, the URL right now, it's listed on BitcoinSecureGuide. It's like the Ten Commandments of Bitcoin? yeah, Ten Comma-- It's" }, { "speaker": "stephan_livera", "time": "32:11", "start": 1930.86, "text": "BitcoinTenCommandments" }, { "speaker": "stephan", "time": "32:15", "start": 1934.58, "text": "Like, you know, one thing is just don't talk to anyone about how much you have, right? Like, very important, very basic, right? you know, keep things separated, right? Like separation of concerns, right? So you don't have keys on computers. and, it is surprisingly simple. You know, like there is no sort of like magical secret or anything like that. It's just, just follow the steps. There is like so much education out there. BTC Sessions has some good ones too. Yeah. I mean, like, listen, there's a million, you know, if you go to, Codecard dot com slash docs, we link to a lot of videos of all kinds of things, great educators. a-and you can pick the educator that has a style that works for you as well. you know? But you- When you take responsibility for things, it's on you, right? It's on you to learn, and, and there is no shortcut. Don't take shortcuts." }, { "speaker": "stephan_livera", "time": "33:10", "start": 1990.0, "text": "And I'll just remind people at this point as well, reminder about testing recovery before you put on a serious amount of coin, right? So as an example, you might have, you know, set up a phone wallet before, but now, once you're dealing with hardware security, it's kind of, you're, you're starting to get to more serious levels, and as an example, you might- Put on whatever, fifty dollars, hundred dollars, something that you're not, you know, gonna worry about, and you can practice going into the settings and deleting the seed and then recovering that seed. And then as an example, if you can see that the device has the same fingerprint and it generates the same address and you can still see the same, balance there, then it kind of indicates to you, \"Ah, yes, I correctly backed up that twelve or twenty-four word seed. Remember that master private key, that, that massive, massive number, and it generated and correctly derived out my...\" my first address with my fifty dollars or twenty dollars or whatever is there. So I've proven to myself that I've, I've, you know, I can recover. So even if the device somehow fails or the device is lost, as long as I have my twelve or twenty-four words, I can recover. And so that, yeah, is actually useful psychologically too." }, { "speaker": "stephan", "time": "34:17", "start": 2057.41, "text": "Go on. When you use seeds, your vendor agnostic. What that means is that you can move to any vendor and your money just shows up again. It's amazing. And, and remember, like people use these devices for like hundreds of millions of dollars. So you're getting, like, when, when you're buying a hardware wallet, like a, a good, well-recommended hardware wallet, like, you're getting for the two hundred dollars, you're getting the same security For your, you know, maybe a few thousand dollars or tens of thousands of dollars that you're just starting with, right? You're getting the same security as somebody, you know, probably holding a hundred million dollars, and people do it. you know, there'll be tweaks on how they're choosing, you know, if they're using a passphrase. We don't, we don't need to get into the weeds because these are things that you'd learn, you know, app-like if you're noob enough. They're like, you're just learning about the seed, there is no reason for you to go dive into what is a passphrase, what is multisig. You know, these things are next on the list. Leave those as" }, { "speaker": "stephan_livera", "time": "35:12", "start": 2112.36, "text": "later, yeah. Just start with the basic twelve or twenty-four words. Twelve words is enough to be honest. You know, what I like to say is" }, { "speaker": "stephan", "time": "35:19", "start": 2118.79, "text": "normally if you have to ask" }, { "speaker": "stephan_livera", "time": "35:22", "start": 2121.63, "text": "Right, you're not ready" }, { "speaker": "stephan", "time": "35:22", "start": 2122.45, "text": "for the next step. Exactly. Like, you, we will arrive at that, like, i-it is a fantastic journey. It's, it's like, it's like going from driving in the parking lot to being like, you know, like very good at driving in any situation, any terrain at any speed," }, { "speaker": "stephan_livera", "time": "35:37", "start": 2137.4, "text": "at nighttime, in the rain, on the big highway," }, { "speaker": "stephan", "time": "35:39", "start": 2139.4, "text": "multi-lane, whatever, yeah. My kid is sick. It's raining a lot, you know, maybe there's a snowstorm, I have to get out of the house, take them to the hospital, right? Like you're fully capable of achieving that, right? And what do you do in that situation? You're careful? Right? You, you drive in a certain specific way, you go slower, you know, you're very mindful about what you're doing, but you can do it, and everybody does it. You know, everybody has had to drive their kids sick, you know, in bad weather. And, and, you know, and, and you do it. Like, there is, there is no need to freak out and sort of like, and, and, and avoid it. Like, you know, you can get there. I trust that like ninety-nine percent of the people can get there." }, { "speaker": "stephan_livera", "time": "36:25", "start": 2184.83, "text": "This show also brought to you by Nomad Capitalist. Nomad Capitalist is a leading provider in terms of offshore tax and lifestyle strategy planning and implementation. They can help you go overseas and legally lower your taxes. As many of you know, I grew up in Australia, but I left. I was sick of it in terms of the taxes and the COVID tyranny and all these other things. And so that's why I left, and now I live in Dubai. But that's not necessarily the place for you. You have to think exactly what works for you, for your family, for your business. And no Nomad Capitalists have worked across dozens of different countries. They've helped people get passports, residences, bank accounts, and all kinds of other things. And importantly, it's not just about choosing one place, it may be multiple places, and it may be also about making the pieces fit together in terms of how your business fits with your family and you as an individual. Nomad Capitalists have helped many, many people in terms of going overseas, and if you're interested, go to nomadcapitalist dot com slash apply. This is applicable for people with a net worth of Above one million US dollars. That's nomadcapitalist dot com slash apply. And now, back to the show. Yeah. Okay, so we've walked through some of the, the key steps there, testing recovery before you put on any serious amount of coin, the, I guess now maybe any best practices around sending and receiving coins, things like verifying addresses. I think these are kind of good practices to get into. So as an example, if you have a way to verify the address that you wanna send to It's a good idea to do that, through multiple pathways instead of just kind of, if, if it's one message, maybe you can, as an example, if you're doing a large transfer, maybe they message it to you, but you also call and check an address, the last few details, or you have it in some other way so you're verifying the address that you're sending to, as an example. We call" }, { "speaker": "stephan", "time": "38:13", "start": 2292.68, "text": "that out-of-channel confirmation, right? Like that's not specific to Bitcoin, that's any sort of like security thing." }, { "speaker": "stephan", "time": "38:23", "start": 2302.95, "text": "you know, like even, you Different country, right? You wanna double-check that he's not a scammer or something, right? So what do you do? Like, you check on screen because browsers lie, right? you know, they have extensions that can show a wrong address or something, so maybe, you know, you contact the exchange through support or something else and you double-check That you do it and send a little amount first. Every time you're gonna send a lot of money to an address, maybe send a little amount first, check that the person got it, you know, that you're good, that address is correct, and then you send the mother lode, right? So that's one thing. Now there can be privacy" }, { "speaker": "stephan_livera", "time": "38:58", "start": 2338.48, "text": "trade-offs with that, but again, sometimes it's better to, you know, take that trade-off, right? So yeah. And so, one other one that's good is verifying addresses on the receive side. So this is another example where, as an example, you have an address explorer so you can search and see, yes. The key for that address is contained inside this device. I'm not accidentally, giving somebody a bad address that doesn't belong to me, right? Because that's like another form of malware where maybe they can copy, paste, and replace the address that you think is yours, or you think you're pasting somebody else's address for them to pay into, but actually it's somebody else's address, that kind of thing." }, { "speaker": "stephan", "time": "39:37", "start": 2377.21, "text": "So this is super important, unfortunately it's not common in the market, is that like, when, when you're, when you're making a transaction with Coldcard What it does is it checks the, the, the change address. It means like when you send Bitcoin out, say for example, you have one coin, one UTXO, that say it's worth ten Bitcoin, right? But you wanna send just one. So what you tell the network is like, \"Hey, send one Bitcoin to this address of this person I'm trying to pay, and send the other nine back to me,\" right? Now It's super important the return address belongs to you," }, { "speaker": "stephan_livera", "time": "40:15", "start": 2415.45, "text": "right? Yeah." }, { "speaker": "stephan", "time": "40:16", "start": 2415.79, "text": "Belongs to you, right? So that's what Coldcard does, is it checks the change address. That's what we call the change address. It's coming, it's coming back as change. It's just that the change sometimes is the majority of the funds. So that's one super important thing. Only get devices that support change address verification, there's no reason why they shouldn't. The other thing is, can your device show you all the transaction information on screen as well? So you're checking on screen of this device that is offline that the address that is going to is the address you wanna pay to. Very important. and the amount and the fee and these things. Exactly. With the key, you can just take a picture of the, the screen with the QR scanner, right? And, and it'll tell you if that address belongs to yourself. The, the other thing is, so yeah, so for example, checking like when you're sending to yourself for whatever reason, like you're, you're changing your TXOs around, you know, you want to, to have that self address that is different than the change address verification. another thing that you really wanna do is a bigfoot gun is Change, sorry, a, a fee amount. So when you're sending, when you're sending BTC, like you wanna make sure you didn't make a mistake and you're sending The, the, the, the, the bulk of the money you're sending to, say for example, the fee instead of the receiver, right? So your, your device, your hardware wallet must check Like, you know, must have a check, say for example, you know, it's never more than ten percent. Like, the fee should never be more than ten percent of what you're sending. You know, there is the odd case you're sending tiny little amounts and that could, you know, then you turn off the check. But the point is your, your hardware wallet must check that the fee isn't bigger than the amount. These, these are very basic footguns the devices should check." }, { "speaker": "stephan_livera", "time": "42:11", "start": 2531.26, "text": "Okay, so we're working through some of these points, let's now talk about common pitfalls Like phishing, there's examples where somebody pretends to be tech support and actually they're a scammer. There's cases of malware, entering your seed words anywhere online, just never do it. only ever enter the seed into a hardware device. If somebody," }, { "speaker": "stephan", "time": "42:32", "start": 2552.05, "text": "if somebody contacts you on DMs saying, \"Hey, I'm tech, tech support of Coinbase, what's your seed? I need to help you,\" never, we'll never do that. No hardware wallet, no hardware wallet will ever ask you for your seed. A-and this goes back to like, if you learn how to What a seed is, right? If somebody contacts you asking for your seed, you know that is bullshit, right? The issue is when you have devices or companies out there that create a flow that is too easy, you don't learn what that is, then you go like, \"Yeah, maybe they are technical support, it looks perfect, maybe I should give my seed.\" So, you know, have the heightened awareness and learn what things are." }, { "speaker": "stephan_livera", "time": "43:09", "start": 2589.15, "text": "Yeah. another one I've heard of is, I think a couple years ago there was a big LastPass hack, which is a password manager. Now, some people have this idea in their mind of, \"Oh, should I keep a backup of it in my password manager?\" And of course, as I said, never mention, never type your seed words into a password manager, because you just, you can't trust that." }, { "speaker": "stephan", "time": "43:29", "start": 2609.31, "text": "Yes. So, so there is, there is, yeah, like, again, never put Bitcoin secrets on computers. You would never have had last password or password manager, if you had learned that, that isn't, that shouldn't be on a computer. It, it, it really is sort of like that simple, right? Like it's, it's a funny simple almost." }, { "speaker": "stephan_livera", "time": "43:54", "start": 2633.6, "text": "Okay, so I guess those are some of the common things. now we touched on this a little bit before around passphrase and multi-sig and how, you know, if you need to ask, you're not ready for it. But when, when is a person meant to think about these things? Like, is it above a Or maybe you've been through, you know, two cycles and now it's time. Or how would you broach that conversation for people? When is it worthwhile to actually start considering these things more seriously?" }, { "speaker": "stephan", "time": "44:19", "start": 2659.44, "text": "I have this, these tweets I put out like every single time the price moves up or down, they're a little like funny, but not super funny. and it's like, you know, always just remind, always protect your BTC as if it was ten times today's value, right? Because you will move them. Much in a blink of an eye. Like, like it is remarkable. Like, we've all seen bull runs, you know? And, and 'cause like people forget to do it, and then by the time they get around it, it probably is 10x what they had, like, what it was when they actually bought it, right? So try to do things before they are ten x, because imagine the level of stress you'd have, okay, if, you know, you bought like some BTC, you forgot it on your phone app, right? And, you know, it was worth a thousand bucks and now it's worth a million bucks. Okay? And, you know, that phone app doesn't have backup. maybe you change phones and you can't find the old phone. Everybody in the early days of Bitcoin lost money that way. It's like you forgot it on your phone, your computer broke, you don't have the right kind of backup, it's no longer compatible, you know, it's a hardware wallet nobody knows about it anymore, software wallet nobody knows about it anymore. So- You know, like always look at that pile and say, \"If it was ten times more than it is now, am I in the correct security, like, setup?\" Right? and, and, you know, as the money amount increases, the value increases, like it becomes very obvious, right? Like it doesn't feel right, right? To have a million dollars in my phone. Like you just" }, { "speaker": "stephan_livera", "time": "45:58", "start": 2758.46, "text": "feel uncomfortable with that level of setup. Exactly. And then, okay, now it's time, time to learn. And again, don't make any rash decisions, even when you are upgrading your setup, don't just kind of jump straight away, right? Like you should be very methodical about it and say, okay, I've got a test setup, I How to recover this new setup. Okay, it's time to slowly and carefully do my upgrade process, and so that's kind of, you know, a few things on that, I think We should start to wrap up, just so people, you know, we keep the length reasonable. I, I guess I'll say it this way, just to summarize some of the key points, right? So don't be scared of self-custody. That's, you know, the key, you know, I think key takeaway. You can learn it. It's like how most adults learn how to drive a car, right? You don't need to be a mechanical engineer who can design the, or an aerodynamic, you know, you don't need to understand all the elements" }, { "speaker": "stephan_livera", "time": "47:00", "start": 2819.86, "text": "It's not that different to learning how to drive a car. So you start with, you know, a phone wallet, and then over time, as you, as your number goes up, it's time to start thinking about a hardware device, and you can use that with a coordinator app. You write down your 12 words, you keep them offline, don't take a photo, don't type them in anywhere, and these are kind of the basic, let's say, guardrails to sort of keep you safe. so that's how I would, kind of advise, Things will change over time, but that's kind of gonna give you, you know, the basics to get started. any closing thoughts from your side?" }, { "speaker": "stephan", "time": "47:38", "start": 2857.95, "text": "You know," }, { "speaker": "stephan_livera", "time": "47:39", "start": 2859.31, "text": "self-custody" }, { "speaker": "stephan", "time": "47:40", "start": 2860.29, "text": "is about knowledge and personal responsibility. Okay, if you don't want any of those things, you will have to trust somebody else, and they are a counterparty risk, right? I think Bitcoin gives humanity finally the power to remove counterparties. To remove permission, from transaction, and, and I believe that if you can drive, you can self-custody. So fantastic. Yeah, it really is. Like, take the time. If you can drive, you can self-custody, you know, check bitcoinsecurity dot guide. I tried to update that. If I can improve more, please let me know. I'm gonna keep on adding more stuff there. I just don't wanna make it too complicated, too long, but, you know, we're trying to find a balance on like how to bring people The parking lot to the highway. so, with that, I mean, that, that's all I have really. Thank you for having me." }, { "speaker": "stephan_livera", "time": "48:36", "start": 2916.32, "text": "Fantastic. Alright, well, listeners, check it out. Links will be in the show notes." } ] }