At this point, most of you have read about the issues in the crypto-exchange world. We saw the collapse of the algorithmic stablecoins last spring which we addressed here. The big recent news is the sudden implosion of FTX, the failed exchange that is heading for bankruptcy and loss of most/all customer assets.
People are reasonably concerned about holding their digital assets on an exchange, but don’t know how to self-custody (fancy way of saying taking ownership of your own Bitcoin). Here’s why this is IMPORTANT: Your digital assets on an exchange do NOT belong to you. You are simply a creditor of a business that may or may not exist in the future. The common saying is “Not your keys – not your coins” which means that if you don’t take the time and effort to self-custody, your Bitcoin is at risk.
Here’s the thing: While self-custody isn’t hard, figuring out what to do and exactly how to do it takes a lot of effort and requires reading materials that often contradict other materials. In addition, there is no perfect solution. Whatever you do comes with risk (and that includes keeping money in the bank).
We decided to make self-custody easy for you. I’ve published a step by step guide to transferring Bitcoin off of the exchanges. This is ONE solution. Other people will suggest alternatives. That’s fine. There’s no perfect answer and no solution without risk. What I can tell you is that if you follow these instructions, you should be able to take full ownership and control of your Bitcoin. The whole process should take about an hour, but set aside a little longer so you can proceed calmly and systematically. (Full disclosure – I do not have any promotional or financial relationship with the company that makes the device that I bought and am recommending.)
I’m going to link the thread here, but if any of you have difficulty following it on Twitter, let me know. It would be possible to publish the full instructions and photos to this blog in the future.
The explanation thread has been up on Twitter for under one day and already has thousands of likes and hundreds of thousands of views. The work has been checked by multiple Bitcoin experts and I have gone through the whole process myself in order to take full custody of my own Bitcoin. Above all, realize that while it’s normal to be nervous when completing a financial transaction for the first time, this is not too hard for you. Stay calm and work carefully.