2018-09-28 Author: ahr999
Storing wealth in a "illusory" private key string is a major revolution in the way humans store value.
If you agree with the viewpoints in the previous four articles:
"Bitcoin and Idealism" - We are participating in a social experiment, which has the possibility of failure, but we have no regrets.
"Getting off Too Early Due to a Small Vision" - The goal of this experiment is ambitious, and if everything goes well, the price of Bitcoin could rise to 160 million RMB in 20 years.
"Holding Bitcoin: How Far Are You from Financial Freedom?" - We have no other abilities, we can only rely on hoarding Bitcoin and patiently wait for our own financial freedom.
"Holding Bitcoin: Impulse, Loneliness, Boredom, and Contradiction" - Although we may experience impulses, loneliness, boredom, and contradictions, we are prepared to hoard coins.
Then, you will encounter a question: where should you store your Bitcoin?
If we hoard gold, we may have two options. One is to rent a safe deposit box at a bank and store the gold there; the other is to buy a safe at home and store the gold there. The answer may depend on the situation.
However, for hoarding Bitcoin, there is only one answer - hoard it in your own hands.
What does it mean to hoard it in your own hands? It means that you and only you have control over the private key that can access these Bitcoins.
It needs to be clarified:
This specifically refers to hoarding coins, and long-term hoarding at that. If you just want to speculate on the price, then you can store the coins on an exchange, after all, time is money for traders.
There are many so-called "wallets" on the market, but they are not strictly wallets because you do not have control over the private key. They can easily be confused with real wallets because their interfaces can be made to look exactly the same, or even better in terms of usability. I do not recommend using these "wallets" for hoarding coins. [Note: This does not mean that these "wallets" cannot be used, they have their uses, such as storing a small amount of coins for everyday expenses.]
There are also some "wallets" that offer interest, but you should always consider the risks of P2P finance. If you are interested, you can search for "Bitcoin piggy bank" on Baidu.
If you are unwilling to have control over your Bitcoin private key, there may be two reasons: fear of risk and fear of trouble.
The so-called risk is related to skills. For those who have mastered the methods of managing private keys, there is actually no risk, and not having control over the private key is more risky. There was once a guy who stored 900 coins in Mt.Gox, of course, back then the coins were not worth much. Later, when the price rose to $1000, he realized that Mt.Gox had been hacked and he couldn't withdraw his coins. It was originally a beautiful story, but the ending was tragic - Mt.Gox announced bankruptcy and the guy committed suicide.
The so-called trouble is related to significance. For meaningful things, we never feel troubled. As for how troublesome private key management can be, we can discuss that later. The point of this article is that no matter how troublesome it may be to have control over the private key, it is worth it. The reason you are afraid of trouble is simply because you have not yet realized how important this matter is.
Li Xiaolai once said:
"Bitcoin is the first time in human history that private property has been made sacred and inviolable through technological means."
I strongly agree with this statement, but it is not easy to understand, especially for those who have never dealt with Bitcoin private keys. My personal understanding is as follows:
"Bitcoin has made it possible for us to store wealth in a 'illusory' private key string for the first time in human history. This is revolutionary, as it means a major innovation in the way every individual stores wealth, one of the greatest needs in human society."
If you store wealth in cash, when you have a huge amount of wealth, your cash may fill up a room. In reality, you do not own this wealth because you cannot take it with you. Your cash will slowly deteriorate or one day be taken away by someone in a truck and burned along with dozens of cash counting machines.
If you store value in bank deposits, it is convenient to withdraw and transfer, but there is a risk of your account being frozen by the bank.
Even if you have a small amount of cash that you can carry with you and your deposits are not frozen, you still face the risk of your wealth being diluted by the issuance of more currency. How much purchasing power does a 10,000 RMB certificate of deposit from 20 years ago have today?
If you store value in gold, you still cannot take it with you, so you may end up like a certain securities tycoon who was caught smuggling 44 kilograms of gold at customs.
If you store value in real estate, it is not just a matter of not being able to take it with you, there is also the risk of forced demolition and requisition.
If you store value in stocks, you are also in danger, as you may die unexpectedly and have your shares donated to charity.
Only Bitcoin perfectly solves the above problems.
Whether you hide the private key in a book or keep it in your memory, you can carry your wealth with you without any obstacles. Moreover, this wealth truly belongs to you, as long as you don't reveal it, no one can take it away, and no one even knows that you have this wealth.
As the saying goes, money is something external to oneself. This saying actually only applies to before 2009. After the birth of Bitcoin, money is no longer something external. Although you cannot bring it with you while alive, you can take it with you when you die.
If you don't want to pass Bitcoin on to future generations, you just need to destroy the private key, which is equivalent to donating it, because all Bitcoin holders in the world are beneficiaries.
Therefore, if there is one thing in this world that truly belongs to you, it is Bitcoin. Of course, there is a prerequisite, which is that you have control over the private key.
If you don't have control over the private key, you cannot enjoy this revolutionary way of storing value.
If you don't have control over the private key, you cannot truly understand the significance of this social experiment.
If you don't have control over the private key, you have never truly owned Bitcoin, let alone hoarded it for the long term.
If you don't have control over the private key, you cannot experience the pleasure of saying, "You can't do anything to me anymore."
Of course, freedom comes at a price, and having control over the private key also comes with consequences. The consequences are your own responsibility. It may sound scary, but it's not as serious as you imagine. I have never lost any coins.
If you are unable to take care of yourself in life, then letting go and taking care of yourself may indeed be risky. But when you learn to take care of yourself, letting go becomes less risky.
Now the question is, do you want to live a life where you can never take care of yourself and always rely on others, or do you want to learn to take care of yourself as soon as possible, so that you can fly freely and enjoy true freedom?
A few years ago, the scene of me creating a cold wallet for the first time is still vivid in my mind. As a novice, I used the most cumbersome method at the time. I reinstalled the system on an old laptop, downloaded the Core wallet (which was called QT back then), installed the wallet offline, generated a new address, backed up the wallet to two formatted USB drives, and then sent coins to the wallet address. From then on, I had a cold wallet, I had control over the private key, and I had two backups. I was excited, skeptical, and a little uneasy at the time, and the memory is still fresh.
It wasn't until much later that I finally understood hash functions, asymmetric encryption, and elliptic curves, and the doubts and uneasiness about security gradually disappeared. And as time went on, 1 year, 2 years, 3 years, it remained secure, and my confidence in it grew stronger, and I gained more insights into private key management.
By having control over the private key, you will gradually develop a whole new understanding of Bitcoin. You will involuntarily pay attention to Bitcoin's decentralization and security, because these are the most important things to you. Decentralization ensures that Bitcoin cannot be issued more and cannot be frozen, and security ensures that Bitcoin cannot be cracked. All the other fancy attributes are secondary. You will also come to understand that the king of coins is the king of coins, and the majority of those other fancy coins are garbage created by people who missed out on Bitcoin.
You will open up a whole new world, where you truly own your wealth. You may even start to look at people in the old world with pity. They are busy, but still unaware that they don't truly own anything.
They still doubt the value of Bitcoin, perhaps because they have never experienced the pleasure of holding the private key.