14 years ago, Satoshi Nakamoto created the first block on the Bitcoin blockchain. Whether consciously or not, that movement started a whole movement; one that continues to breathe and expand these many years later. The uniqueness of Nakamoto’s creation has been revealed countless times since the Genesis block was mined and today, more than ever, his purpose is becoming clearer and, fortunately or not, necessary.
Engraved on the Genesis block is Bitcoin Reason to be.
“Foreign minister on brink of second bailout for banks”. A simple but powerful message. The engraving itself serves as an anchor to the physical world, a testament to Bitcoin’s birth date, or at least that it could not have been created before January 3, 2009, the date the cover was published. But more importantly, and more philosophically, the message establishes a kind of manifesto, right from the start. It makes clear that the system initiated by that very bloc is opposed to central bank policies enabled by a culture of easy money. Bitcoin, instead, would seek to restore accountability and anti-fragility through a monetary system based on sound money; one that cannot be degraded or controlled, manipulated or manufactured to benefit the lucky few. Bitcoin would seek to level the playing field, securing property rights to millions of people around the world, equally and regardless of status, race, religious beliefs, gender, or nationality.
The fundamental properties of Bitcoin would allow that dream to come true. Powered by a distributed network of nodes, each running the protocol’s software and as such enforcing its rules, Bitcoin could allow people to take control of their finances, once and for all. However, as the days and years passed, more and more Bitcoin-related activities began to drift towards centralized institutions, initially for buying and selling, then for custody, and today for a plethora of services unimaginable in the Nakamoto days. While such a move allowed for more participation from people around the world, Bitcoin’s initial ideals began to be neglected. After all, true peer-to-peer electronic cash cannot be updated in a custodial model where the movement of funds is nothing more than an update in a centralized database. Instead, that reality looks more like the old traditional financial system that Nakamoto tried to fight in the first place, one that makes it impossible for people to be sovereign, since they can’t own their finances.
While there are multiple requirements for Bitcoin holders to break free from the reality of the established system, this article focuses on one key aspect that the holiday shares with Bitcoin’s birthday. Proof of the Keys Day, also celebrated on January 3, was started by the infamous Trace Mayer, who rallied people to withdraw their bitcoins en masse from centralized exchanges and custodians. The reason? Only by withdrawing their BTC can people ensure that companies in the burgeoning industry do not engage in old and established vices such as fractional reserve banking. Also, with just bitcoin in their possession, in a wallet they control the keys to, people can be free to do whatever they want with their BTC. There are many different ways to do self-custody, and while it can be daunting at first, it is a necessary step in making the leap from the old to the new system.
The “keys” discussed here are the private keys for a given Bitcoin wallet. They can be thought of as the actual wallet key in the sense that it “unlocks” the wallet and the bitcoin stored in it for spending. Without the keys, bitcoin cannot be spent. This is because when a Bitcoin transaction is formed, the sender “locks” the bitcoin with information about the receiver. Thanks to asymmetric cryptography, this transaction dynamic ensures that only the entity that received the bitcoin can spend it next. And this expense is possible thanks to the recipient’s private keys. So, as long as the recipient takes good care of their private keys, only they can spend their bitcoin, no matter what a government, institution, or agency thinks or does about it.
By keeping bitcoin in a wallet that you create, you ensure that only you can move the bitcoin that is in that wallet. When a third-party custodian holds your bitcoin for you, they create a wallet for you and tell you the address so you can deposit, but they ultimately control the private keys to that wallet, and more often than not, that’s information they don’t access. accessible. As such, it is necessary to ask permission to move your bitcoin. Although such a request is automated, it is still required for you to move your funds. Often this takes the form of a “withdrawal request” that you send to your exchange. Proof of Keys Day aims to make people aware of this fact and encourage them to take control of their finances once and for all, making the leap from the traditional financial system to the new decentralized system based on Bitcoin. As the saying goes, not your keys, not your bitcoin!
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