The Journey of a Bitcoiner
How Bitcoin companies can work together to deliver a superior service
A look at how bitcoin-only products & services can co-exist and collaborate to assist users along their journey to becoming bitcoiners.
By Aleksandar Svetski of Amber Labs + Phil Geiger of Unchained Capital.
Preface
There’s lots of opinions about what’s more important for users, hodlers, and people in general who are buying, using and participating in Bitcoin.
Some say it’s ALL about self custody and knowing how to be sovereign, running your own node, etc. “Not your keys, not your coins”
Others say it’s ALL about privacy.
Some say it’s about commerce & payments.
Others advocate transparency & auditability.
You then have the HODLers, who say just buy & hold, no matter what.
You have the traders, trying to make more bitcoin (or the weirdos trying to make more dollars)
And we also have the DCA (dollar cost averaging), aka; Stacking Sats for Salvation; Matthew Odell +Hass McCook
So who’s right?
Well the truth is, it’s nobody and everybody.
In fact, my argument is that there is no clear cut right or wrong. They’re all valid approaches in their own right, and just as important at different stages along the journey.
There is no “one” element of bitcoin that’s more important than another, because much like any economic system, you cannot look at one part of the system in isolation. The parts are relative to the whole.
That idea goes not only for bitcoin as a tool and how it is used, but also with respect to how bitcoin functions. Bitcoin is money, and just like with any other currency, you need to ultimately make your own decisions about how you want to use it.
I’ve written at length about Bitcoin as a complex interaction of ‘functions’ and ‘disciplines’ in The Bitcoin Times. You can find a specific excerpt here:
The article’s summation is that Bitcoin is a broad, multi-disciplinary concept where no “one element” is the “secret ingredient”, as many “blockchainers” would like to have you think.
Bitcoin is a complex, emergent phenomena, and as a result, it’s impossible to define “what” it is in fixed terms, nor is it possible to define what its ‘most’ important use case is, or what the ‘most’ important thing to consider is for different users (ie; privacy, sovereignty, skin in the game, censorship resistance, gains bro, etc). It’s simply all relative & subjective.
The result of the above is that it’s extremely difficult and perhaps nigh on impossible to build a single product that caters to the many needs, wants & desires of the market. In fact, I’m not sure it’s even a good idea because quality of feature always trumps quantity of features.
In fact, as an extension of the idea of specialisation and division of labour, different products in the market are better off delivering in segments they’re most competent in and then collaborating with others at the periphery, or where overlap exists.
Hence why, as a builder of a product in the proverbial “bitcoin space”, we at Amber have attempted to focus in on the piece of that puzzle we can impact the most, knowing that we’ll have to make trade offs along the way whilst doing our best mitigate the potential downsides of those trade offs by collaborating with the best in the game where & when we can.
So let’s explore…
The Journey Begins
Whilst I just made the point that all of the elements listed above are important, the truth of the matter is that the journey must begin somewhere — for all of us.
That ‘somewhere’ may be different, but I’d argue if looking at society as a whole, there’s a bell curve distribution in terms of number of people and ‘where’, or ‘how’ they start their own journey…
Some of us are just primed for Bitcoin in all it’s self sovereign glory, some are best described as per the opposite of the bell curve below, and of course, ‘most people’ are in the middle..
And it’s evident. We’re now 11yrs into Bitcoin’s life, and we have terms like no-coiner, pre-coiner, shitcoiner, and bitcoiner to help us understand who someone is in relation to bitcoin and where they are on their journey.
The people I’m personally interested in, and that we most want to serve at Amber are the no-coiners and pre-coiners (arguably, all no-coiners are pre-coiners, assuming they don’t die before acquiring some bitcoin).
So..with that in mind, what comes first?
I believe, there are three extremely important elements in the early days of one’s journey into Bitcoin, and they are:
- Simple onramp (Skin in the game)
- Bitcoin-only product (no distractions)
- DCA (automatic accumulation)
I don’t believe there is anything more important to begin with.
Let’s explore these.
1. Onramp
When I hear people talking about running your own node, or securing your own seed phrase before holding any bitcoin, I SMH. It’s no wonder the receiver of this information never goes & buys any, or just ends up buying some other shitcoin that their other moron friend told them to buy.
You don’t convince someone to drink some water by placing a firehose in their mouth….
So let me put myself on record by saying that SKIN IN THE GAME comes first.
It doesn’t really matter how it’s bought. Obviously some services are better than others, but getting some bitcoin and being red-pilled is the necessary first step.
Without skin in the game, it’s nearly impossible to really learn about, appreciate or understand the deeper elements of Bitcoin, ie; self sovereignty, privacy, censorship resistance, etc.
If your “bitcoin expert” either doesn’t hold any btc or peddles altcoins to you, it’s unlikely that they 1. Understand what they’re selling to you or 2. Can protect it with the care and focus it demands
2. Bitcoin Only
Next up, we need to ensure the OnRamp is distraction free by making it Bitcoin only. The last thing we want is to have the precious capital of our friends & family be allocated to vapourware & ponzi schemes (read: EVERY crypto. Bitcoin is categorically different than “crypto” in that it decentralizes and has no leadership to enrich.
Bitcoin only products and onramps have other important benefits:
- Smaller attack surface
- Simplicity of use
- Quality of features over quantity of shitcoins
- A focus on accumulation & hodling (at least in the case of what we’re doing at Amber)
- A deep understanding of why bitcoin matters
This overall makes the initial part of the journey smoother, safer & easier for new people.
3. DCA & Accumulation
Lastly, we want to help take the emotion out of people’s purchases in the early days.
Remember when you first bought some bitcoin, and that gut wrenching feeling on the way up, and on the way down?
It’s early days people!
Volatility isn’t going away anytime soon, so getting your pre-coiner friends to dump all their money in, in one shot is only going to cause them to panic sell at the wrong time & blame you for their losses.
DCA is the antidote to short term whiplash & volatility.
It also develops a powerful habit. That habit is called saving.
Remember that thing? Yeah — I know it’s not very popular in our blind-consumption oriented society, but it remains a profound act. In fact, it’s even more important as the rest of the world is off spending everything they have & don’t have (thank you runaway credit & debt).
In fact, with Amber automating the process, the only “habit” you need to form is checking in on your account every so often to withdraw your coins.
This is why we’ve specifically chosen to focus on those three initial components, because that is where we believe we can add the most value.
Game. Set. Match.
When people ask us why we don’t build a self custody wallet in Amber, and jump on the ‘not your keys not your coins’ bandwagon, this is why.
That’s not our game.
Our raison d’être is to help people get some skin in the game, keep people focused on Bitcoin, and develop a consistent habit of saving by stacking sats.
Thereafter, we encourage people to take custody of their bitcoin when they’re comfortable in doing so! Not any earlier, because there’s no point stacking all these sats, chucking them on a ledger, putting it in your bedside drawer, right next to your seed phrase which is written on a piece of paper..
In that case, a user is much better served leveraging the abstracted access to the best multisig practices Amber employs via our partners at Unchained in order to keep everyone’s Bitcoin secure.
Which brings us to the next part of the hero’s journey.
But before Phil takes over, let’s take a moment to visualize what this journey looks like, so that we can later discuss how Amber & Unchained have been able to collaborate at overlap points; which is the central theme of the article.
The journey…in an image
Here you can visualise them in a funnel, which I believe represents the general journey one takes when getting involved in bitcoin.
Note that very few people start off a raving Austrian economics, personal sovereignty & privacy advocate, but once they’ve been red-pilled, the opportunity exists for them to fall down the rabbit hole.
Bitcoiners inherently know Bitcoin is a temporal phenomenon. It’s why we understand that its evolution will take time, it’s why we’re supporters of a low time preference, it’s why we hodl today for a better future tomorrow.
We need to take the same approach with new people, hence our approach at Amber.
We also need to realise that today’s Bitcoiners are going to be different than tomorrow’s, and as such we need to continue to find ways to bring them into the fold, effectively.
I’ve written about what it means to be a bitcoiner, recently here:
So let’s now throw it over to Phil at Unchained who will discuss the next elements of the journey and how they’re leading collaborative custody as a service by leveraging the inherent attributes of Bitcoin.
This is truly unprecedented because we’ve never had something like Bitcoin before.
Falling Down the Rabbit Hole
So you’ve finally taken the plunge and stacked some sats (bought bitcoin) with Amber. Congratulations, and welcome to the revolution! By now, maybe you’ve noticed that your bitcoin wildly and rapidly fluctuates in value. This thing could be valuable, so it might be worth investigating how to protect it.
There are a few rules that you’re going to hear ad-nauseum over the coming months and years, and for good reason. The global monetary competition kicked off by bitcoin in 2009 is rife with unsavory folks trying to take your bitcoin. There are only 21 million bitcoin, but there are an infinite number of ways people can attempt to take them from you.
Does this sound a little paranoid? Maybe, but let’s review the rules and then review some of the background into why these rules are important. These rules are going to be your mantra in short time, and they are native to the new global bitcoin economy, so internalizing them and living them will make you more secure on your bitcoin adventure.
Rule 1: Don’t Trust. Verify.
Maybe you’ve heard the idiom “trust but verify,” popularized during the Cold War. That was good enough at the time, but bitcoin isn’t run by a few bureaucrats sitting around playing war games. This is a freaking global grassroots revolution, and we need to amp up our security. “Don’t Trust. Verify.” has many layers of meaning.
In the legacy financial system, you have almost no way to verify anything that your central bank, local bank, or government tells you. How much of your local currency exists right now? How much existed last year? How much will be printed tomorrow? Does your bank have all of the money they tell you they have? Good luck finding the answer.
In the new system, every satoshi (.00000001 BTC) is tracked and accounted for 24/7/365. You can verify the location and currently available supply of bitcoin by downloading and running a full node on your laptop for free: https://bitcoin.org/en/bitcoin-core/.
That’s right, you can now be a (de)Central Bank of bitcoin. Your computer can be part of Bitcoin’s “impenetrable fortress of validation,” and absolutely zero inflation or thievery is going to happen under your watch.
By running a full bitcoin node, you don’t have to trust another party to give you accurate information. You can verify your own balances and make sure that the rules are upheld.
This idea of verifying extends further in the bitcoin economy. You should be thinking through interactions with individuals, companies, and thought leaders and finding ways to verify that the information you’re receiving is valid.
Maybe you’ve heard about another cryptocurrency that has additional features? How can you verify if it’s worth it to investigate? Look at the long-term value of that currency measured in bitcoin. If the new currency is so much better, why can’t it maintain or increase in value measured in btc over the long-term?
To test whether you’re getting good information, you can outsource the work to the market, since bitcoin made all currencies compete globally at a retail level. If you are lost in the noise, the market can test your assumptions because it is expressing a crowd-sourced view that over time, everything becomes worth less in bitcoin terms.
There’s no such thing as a utility token, smart contract platform, or DeFi. These are empty marketing terms masking the fact that what they’re selling you is a weak currency. In the long-term, the value of every other currency gets destroyed by the crushing monetary supremacy of bitcoin. 21 Million.
And this…
If the information you’re receiving can’t be verified, it shouldn’t be trusted. If bitcoin is money despite what you were originally taught, then it might be the case that “Everyone’s a Scammer.”
Rule 2: Not Your Keys, Not Your Coins
Bitcoin gives you the opportunity to truly and unilaterally own the access to uncensorable money. You can travel globally with any amount of value that you can conjure out of thin air by reciting 12 words, but only if you control the keys to the castle. Ask your neighbor/contact/friend who escaped a dictatorship if they would have found this ability useful.
On the other hand, if you don’t hold the private keys to your bitcoin, then you do not own any bitcoin at all. Instead, you own a promise. If you’d like to continue owning promises, I’ll refer you back to the legacy financial system.
Why go through the trouble of learning about private keys and take the responsibility to actually own your coins if you live in a stable and developed country?
Millions of bitcoin have been lost or stolen unnecessarily because first and second generation bitcoin or “crypto” companies have duct-taped legacy account structures onto the new bitcoin financial system and didn’t give their customers control of private keys. Your bitcoin are actually less safe if the keys are kept at banks or exchanges in the bitcoin economy.
Don’t let your coins be a statistic.
Bitcoin Native
To Aleks’s points above, owning private keys is a big responsibility, and it’s one that takes time to work up to. At Unchained Capital, we practice collaborative custody, which delivers a higher level of security by distributing keys across multiple parties (and multiple institutions in many cases) within multisig setups.
This creates greater diversity in key management to mitigate risks.
Bitcoin are secured in 2-of-3 multisig vaults (two out of three keys are required to spend any bitcoin) and clients remain in full control while having the benefit of Unchained as both a technology partner and as an active participant securing key(s).
We work with innovative bitcoin companies like Amber and savvy bitcoiners to protect and manage bitcoin, and can give a majority of the keys to clients. In doing so we can help people along the entire journey — from new to experienced..
If you’re using Unchained Capital to secure funds, you still unilaterally control the ability to move your money, but don’t take my word for it. We give you open source tools and external spend information to verify that you are always in control of the bitcoin. This is only possible because we are bitcoin-native.
Collaborative custody leverages bitcoin’s native security properties (private key authentication and ownership) while including a team of bitcoin security experts without trusting them with your bitcoin. We think it’s a good blend of the highest level of security, while not being 100% off on your own to protect your most valuable asset. Is there an anonymity trade-off? Yes, but now your loved ones can call up a team to help them get access to your bitcoin should anything happen to you.
- Don’t Trust. Verify.
- Not your keys, not your coins.
Bitcoin is a journey, and getting to the point where you understand these rules means that you’re already further along than 99% of the world. In my experience, these two rules are critical to understanding the impact of bitcoin, and the time you invest to learn how to use, manage and interact with it will pay off long run.
Bitcoin-Only and bitcoin-native companies can help you along the way.
The Collaboration
Let’s tie it all together and bring this to a close with a really important idea;
The results from the collaboration between two Bitcoin companies.
Whilst Amber is designed to service ‘most’ people in the early days of their journey, and Unchained is designed to service the user at a more advanced stage in their journey, by collaborating, we can together provide a smooth transition across all steps of the journey. From pre-coiner, to early coiner, to bitcoiner, to hardcore bitcoiner.
Amber using Unchained’s collaborative custody to secure 100% of customer funds, means that those users who are less technically savvy, new to the game, or have not yet had the time to get comfortable with self custody, get PROXY exposure to best-in-class custody of their assets.
This is an incredibly important evolution from the early days of Bitcoin, and the exchanges who originally emerged. Rather than one company securing keys (Mt Gox, Bitfinex, Quadriga), two bitcoin-only institutions are securing customer keys to deliver a more resilient security model for the benefit of Amber’s end users.
Benefits they get, whilst they:
- Build their stack
- Learning about Bitcoin
- Learn about how to take custody
What about those who are already farther along on their journey, who are more technically savvy, or who would like to self custody today?
Well that’s easy. Amber’s always encouraged users who are confident enough to do so, to regularly withdraw their bitcoin to their own wallets. Our withdrawal facility was not the first feature available when we launched in 2019, but it’s now well & truly functional via our batch withdrawals, released daily from our multi-sig account.
But the focus of the product remains ease of use, and abstraction of security for those that are not confident, experienced enough, or just plain old not ready. Those users can get access to the Unchained collaborative custody service by leveraging Amber’s service.
The result is the best of both worlds for users.
- Simplicity of access & accumulation
- Proxy access to best in class collaborative custody, and
- A path toward best practice personal custody
What does the future hold?
Companies like Amber & Unchained Capital are always looking at ways to improve access, usage, storage & interaction with Bitcoin.
We do this because we’re not wasting resources running shitcoin casino’s like some other may be.
The result is important, feature-rich services that understand bitcoin and make a difference to the financial system and to people’s lives.
Some examples:
- Individual multisig accounts inside Amber which leverage Unchained Capital’s infrastructure to provide best in class collaborative custody
- Proof of Reserves. Later in 2020 we will be exploring ways to effectively prove reserves for all funds in custody.
- Collaborating or developing integrations with node-kits to help users gain further monetary sovereignty
In Conclusion
The Journey happens in parts, and generally starts with getting some bitcoin!
Our job is to then encourage people to take the right path, to stay Bitcoin, to keep stacking, to keep learning and by partnering together, we can deliver the best along the journey:
- Pre-coiner turns new-coiner. Buys & DCA’s $20/wk of Bitcoin using Amber.
- Amber abstracts proper multisig cold storage by allocating user funds to Unchained collaborative custody, multisig vault (made possible because we’re a bitcoin-only, buy side service, not a shitcoin casino). The most viable way to provide cold storage as a service.
- Amber makes withdrawals simple, easy (and soon, automated), and helps encourage people to not only automate purchases (DCA), but to automate withdrawals and take custody as their stash & experience grows. We’re giving clients the benefit of being further down the funnel through our partnership with Unchained.
- The user journey then progresses to do the BEST thing they can do for self custody, ie; collaborative custody multi sig account using Unchained Capital.
So all in all, Amber + Unchained work together to provide services from start to finish on this person’s journey.
- Amber: Making it Easy. Accumulation is the game.
- Unchained: Keeping it Safe. Friends don’t let friends sell bitcoin.
If you enjoyed this article, make sure you “give it the claps”. Jokes aside though, it means more people will see it.
Likewise share it around, on the twitters and other socials you’re on (including, god forbid, you still share via that thing called email 😜)
And if you’d like to read more from or learn about either of the companies mentioned here, and the authors who are a part of each, details below.
Thanks again!
