The social and often uncomfortable side of Bitcoin

Image of Opendime Bitcoin ledger on black carpet

Whenever I write about Bitcoin I end up taking about financial or technical topics. Either I cover recent events or there is an exciting new project which offers a new way to introduce people to Bitcoin.

If I talk about Bitcoin within my social circle things get messy. Not only from a financial standpoint but also an ecological. The usual insults get thrown around. Whether it be the Bitcoin to US Dollar price or how bad Bitcoin is for the environment. Both points, I don’t address here today.

However, Bitcoin is still so interesting that most of my social circle eventually get onboard. Often the wrong way by downloading Coinbase, buying some Sats and keeping them on there for the foreseeable future. The mistake here is not to get into Bitcoin, but keeping it on an exchange and having it in a custodial wallet. Meaning if they goes bust, your coins are gone as well.

This is the problem. Most people are too lazy and not eager enough to host their own assets. The original way of getting into Bitcoin was to rune a node, setup a full node wallet, connect your node to that, setup the account with an address, be part of the peer to peer network and in the end receive or send some BTC. This means, that you and you alone are responsible for the safekeeping of your wealth.

It’s much easier these days to setup a non-custodial wallet and secure your coins with cold storage. Whether you buy something like a COLDCARD and use open source software or get onboard with the whole Ledger ecosystem, both ways are a major upgrade from the centralized exchange.

The added benefit of going down this road is that you’re able to own the private keys of your wallet. Something you won’t be able to do with Coinbase, Binance or any exchange. A small tip on that note as well, don’t write your private key down on paper and then save it in Dropbox. Get a metal back up solution like CRYPTOTAG and save the most important piece of the puzzle this way.

As you can imagine, whenever I explain these past paragraphs to friends or family, most of them shrug their shoulders and tell me that this is nonsense. Why should they be in charge of their BTC if they’re providers who offer to do it for them and on top of that, even add some yield. A friend of mine got into Bitcoin in 2020 and gave me that exact reason. He only had 20% of his portfolio in cold storage. 80% was stored on various CeFi lending platforms. Either as collateral or to get high yields.

He allocated these 80% in a 50/50 split to Celsius and Voyager. I know, this sounds like a bad story, but bare with me. Instead of saving his assets and cutting the greed of having these super high yields, he continued stacking on these platforms. Once June hit and both of them closed the ability to withdraw, I began getting messages from him on a daily basis.

For the next days we would often talk and exchange our thoughts. I told him that these are the exact reasons why Bitcoin was created. To be censorship resistant and able to be kept in a safe place, regulated by a peer to peer network and no central institution.

Even though I’m sure he heard what I said, he choose to ignore it. Instead of facing the facts, he started breathing too much hopium and believed these companies would eventually turn things around. As you may know this isn’t the case. Most likely both of these companies will never return the money they stole from gullible people like my friend.

The article is already longer than I wanted it to be, however I think that most of us can tell a similar story to this one. Just exchange Celsius or Voyager for things like Mt. Gox, CVE-2010–5139 or James Howell, poor guy is still looking for his hard drive. Whatever tragedy it was, in the end it was up to us Bitcoin maxis to pick up the broken pieces.

Which is the exact point of my article. Whether we talk to critics of Bitcoin and try to convince them of the joy which is Proof of Work. Or someone who got wrecked due to not verifying and trusting blindly. With both cases we need to take time out of our day, explain the same thing over and over again.

Mostly with the outcome, that we get told to shut up or people secretly send us DM’s saying how right we were, but no one can know they told you. There is never a eureka moment in Bitcoin for you.

This is not why we’re doing this. Most of us will never stop educating people about Bitcoin and will always have to deal with this back and forth.

On that note, if you want to find out more about Bitcoin or need help with getting your coins of exchanges, hit me up and let’s get it done.

Joël Kai Lenz

Joël Kai Lenz

🍊💊 Ple₿ who's on the hunt for the next best coffee shop to write about #Bitcoin and #Lightning ⚡️
London, United Kingdom