Back in December Trace Mayer, a longtime crypto proponent and host of the Bitcoin Knowledge Podcast proposed a new “cultural tradition” called “Proof of Keys”. The idea was simple: on January 3rd, 2019— the 10th anniversary of the bitcoin genesis block being mined— everyone would withdraw their funds from centralized exchanges to their own wallets to which only they have access to the private keys.
The idea took off, and right now as you’re reading this, millions of people around the world are moving their hard-earned funds off of exchanges and onto THEIR wallets.
Which wallets? Software, hardware, paper wallets— it doesn’t matter, as long as it’s not an exchange wallet, you’re participating in Proof of Keys.
If you’ve been following our blog, you know that we go on and on about how leaving your funds on exchanges is a bad idea. Why?
- Your funds can be stolen by hackers (over $1 billion stolen last year, in fact).
- You can lose access to your funds due to technical problems at the exchange.
- Finally— and this is perhaps the most sinister reason— if the exchange has your private key, they can freeze your wallet at any time, for any reason, and prevent you from sending it elsewhere, even though it’s YOUR MONEY.
Some exchanges, like HitBTC (which figures like Trace Mayer and John McAfee have been criticizing for some time) have already failed the Proof of Keys test:
HitBTC users are reporting all over Twitter that they are unable to withdraw funds.
Imagine being in that position.
What if you had an emergency and needed that money?
What if you saw an amazing opportunity to make a trade, and now you’ll miss out?
What if you just wanted to store it somewhere else and you don’t need a better reason than that because it’s your own damned money?
Too bad, you can’t have your money, because they said so.
That’s what happens when you give too much power over your funds to centralized entities that need to make a profit. When their interests are not in alignment with your own, it’s pretty easy to guess what will happen.
“Not your keys, not your bitcoin.”
10 years ago today when Satoshi Nakamoto launched bitcoin, a vision for a new era of financial freedom was brought into fruition: An era where people took back control of their money from corrupt banks and financial institutions.
We don’t think Satoshi went to all that trouble just so we could end up right back were we came from. That’s why Proof of Keys is so important.
It’s the crypto equivalent of a bank run, and the best part? It’s going to happen every year on January 3rd from now on. Just to remind the massive centralized exchanges who’s really in control.
Reclaim sovereignty over your finances and withdraw your holdings to your own wallet today.
When you do, you can use products like Faast to swap digital assets safely from your own wallet, which you and you alone control.
What better way to celebrate Bitcoin’s 10th anniversary?
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