Andreas Antonopoulos, a well-known Bitcoin proponent and the author of Mastering Bitcoin, spoke about one of the most controversial topics in the space at present, secure storage of Bitcoin [BTC] and other cryptocurrencies, during a Q&A session on Youtube.
Here, the author elucidated Trace Mayer’s statement that a user required Bitcoin Core for network validation, Armory for managing the private keys, the Glacier Protocol for standard operating procedures and a Purism laptop for hardware. He also spoke about the gold standard for the storing cryptocurrency, which would apply for non-technical investors as well.
On Trace Mayor’s pre-requisites, the author exclaimed that different groups have its own risk model and tolerance for technical complexity. He added that the important factor is that the technical complexity is a part of the risk model, adding that a user would be at “serious” risk of losing their cryptocurrency is the technical complexity is above their skill level. He went on to elucidate on the reason:
“Not because it is stolen, but because your ambition for technical excellence exceeds your current skill level, and you messed up [on the execution]. This applies to every level of technical expertise. There is always a ‘higher level’ of security to achieve, by adding a bit more complexity. Security is not an on / off thing, “it is secure” vs. “it is not secure”.”
He further affirmed that the is “no gold standard” that applies to everyone. However, a user can reduce the risks faced by identifying and understanding who could be after their crypto and under what circumstances they could access it. He added:
“[…] Whatever else the risk model might [include], then you must balance that against your technical skills. Find which of these risks you can eliminate, in a way that you and anyone designated to help your loved ones… recover your crypto if something happens to you, can execute flawlessly. That is the sweet spot.”
This was followed by the author stating that there Trace Mayer’s sweet spot turned out to be Bitcoin Core for network validation, Armory for managing keys, Glacier Protocol for operating procedures and a Pursim laptop for hardware. Andreas further stated that other people have higher standards in comparison, like that of Coinbase, which uses a Faraday cage for cold storage – a room lined with an electromagnetic shield to ensure that it does not leak radio frequencies. However, others don’t have anything that protects their storage room. He said:
“Trace is identifying his sweet-spot based on his level of technical expertise […] For 99% of users, this is not right, because 99% of crypto users do not have the technical expertise to execute on a plan of this complexity. As a result, what they will do is over-extend and underachieve on technical execution, standing a much bigger risk of losing their crypto due to key loss than having it stolen by an external adversary.”
He continued to say that a user’s lack of technical expertise, over-ambition in execution can result in them losing their cryptocurrency instead of losing them to “some nefarious hacker”.