Do you know the hardest thing about Bitcoin? Knowing how to store the damn thing.
Hot wallet, cold wallet, custodial, non-custodial. Hardware or software.
Navigating these factors will soon become important, once you start wallet shopping.
Furthermore, did you know that Bitcoin wallets don’t actually store Bitcoins, instead they store your private key for transaction signing.
Your actual Bitcoins are right there on the public blockchain, for everyone to see. It’s just the identity of holder that’s hidden.
But once combined with KYC data from the exchanges, individuals and their holdings can be joined together. That’s how HMRC tracks capital gains, and knows how much tax is due.
Ledger, one of the most popular providers of physical security devices, was hacked and their customer account details exposed.
Individuals, and their Bitcoin balances, are now out there in the open. You can buy that information on the dark web.
Mr Smith of 23 Green Leafy Street, who holds 1.5 million pounds of Bitcoins, should be very wary of answering the door late at night.
Knock knock. Hello. Gun to the head. Tell me your secret pass phrase. Goodbye Bitcoins.
I hold no Bitcoins and all this is new to me.
But my climbing partner has been telling me about his desire to obfuscate his Bitcoin holdings, having been a victim of the Ledger hack.
However, reclaiming privacy is made complicated by a public blockchain with transactions openly recorded, and a Government keen to take their fair share of the pie.
I used to think digital currency was more secure, but I’m not so sure.
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