Experience from storing bitcoins with a very long term mindset

Recently I’ve been tasked to gift some satoshis to a newborn baby, who is supposed to redeem them when he grows up, about 18 years from now. The challenge was trickier than originally expected, as there are many different ways to store bitcoin, each one with different trade-offs, and at the same time it’s hard to predict the state of the Bitcoin industry two decades into the future.

Make it future proof

The first problem I faced was the choice of the hardware support. Any electronic device faces forward compatibility issues, making it hard to predict which hardware tech will still be compatible in 18 years. If, for example, someone received today a floppy disk or a Sony minidisk from the ’90s, it would be very hard to find a device able to read it now. It is likely that the same problem will happen with USB sticks, so using a hardware wallet from 2019 may end up requiring multiple adapters to bridge between different communication standards. For this reason, avoiding electronic devices all together is definitely the best option, and using a physical support to write down your private key to be later imported in whatever wallet will be available in the future is so much more future proof. …


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Medieval padlock from a temple in Kathmandu, Nepal

In our modern society, we use locks to protect wealth in all of its forms, whether it is our house, our car, family jewellery or precious digital data, we use physical or electronic (encryption) locks to make sure that what we consider valuable stays safe. Locks are necessary for a very simple reason: we want to preserve private property, but we are surrounded by countless strangers we cannot trust.

However, this was not always the case. In early human civilisations, people lived mostly in small tribes or villages, interacting regularly with a quantity of fellow humans well below the Dunbar’s number. This meant that, at the time, there was no need for such a thing as a lock. In a community, it was just widely known what was owned by each member, and most valuable proprieties such as animals and tools were easily recognizable and not fungible. Therefore, it was simply unfeasible to get away with theft. If Alice went on stealing Bob’s knife, as soon as she tried to employ it in some daily task she would soon be confronted with awkward questions such as “hey, what are you doing there with Bob’s knife?”. …


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Selection of forks of the Bitcoin software

From the very early days of Bitcoin, multiple attempts of at least partially replicate its success, by coping its codebase with some slight modifications, took place. The very first fork of the Bitcoin code that ended up generating an altcoin was, in April 2011, Namecoin, a project aiming to create a distributed DNS system.

Soon after, many other copies of Bitcoin followed, vainly attempting to improve Bitcoin by changing few parameters such as the block time (GeistGeld) or the mining algorithm (Tenebrix). While most died in the following months or years, some of them, thanks to more effective marketing efforts, managed to survive and are still alive today, even if they are completely lacking of any long term purpose or value proposition. …

About

Federico Tenga

Working on Bitcoin stuff

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