14 years ago to the day, Satoshi Nakamoto created the first block of the Bitcoin blockchain. Whether consciously or not, this movement started a whole movement; one that continues to breathe and grow these many years later. The uniqueness of Nakamoto’s creation has been on display countless times since the Genesis Block was mined, and now, more than ever, its purpose becomes clearer and, luckily or not, necessary.
Engraved in the Genesis block is that of Bitcoin purpose.
“The Chancellor is on the brink of the second bank bailout.” A simple but powerful message. The engraving itself serves as an anchor to the physical world, an attestation of when Bitcoin was born – or, at least, that it could not have been created before January 3, 2009, when the cover has been published. But above all, and more philosophically, the message establishes a kind of manifesto, from the start. This clearly shows that the system unleashed by this very bloc is taking a stand against central bank policies made possible by a culture of easy money. Bitcoin, on the contrary, would seek to restore accountability and antifragility through a monetary system based on sound money; one that cannot be degraded or controlled, manipulated or manufactured for the benefit of a lucky few. Bitcoin would seek to level the playing field, securing property rights for millions of people around the world, equally and regardless of status, race, religious belief, gender or nationality.
The fundamental properties of Bitcoin would allow such a dream to come true. Powered by a distributed network of nodes, each running the protocol’s software and thus enforcing its rules, Bitcoin would be able to let individuals take the reins of their finances – once and for all. Over the days and years, however, more and more Bitcoin-related business began to drift to centralized institutions, first for buying and selling, later for custody, and nowadays for a plethora of services unimaginable in Nakamoto’s day. While such a move allowed for greater participation from people around the world, Bitcoin’s original ideals began to be overlooked. After all, true peer-to-peer e-money cannot be updated in a custodial model where the movement of funds is just an update on a centralized database. Instead, this reality is more like the old traditional financial system that Nakamoto sought to combat in the first place — a system that prevents people from being sovereign because they cannot be in control of their finances.
Although Bitcoin holders have multiple demands to break free from the reality of the established system, this article focuses on one key aspect that shares celebration with Bitcoin’s birthday. Key Proof Day, also celebrated on January 3, was started by the infamous Trace Mayer, who rallied people to withdraw their bitcoin en masse from centralized exchanges and custodians. The reason? Only by withdrawing their BTC can people ensure that companies in the booming industry do not partake in old and established vices like fractional reserve banking. Moreover, only with bitcoins in their possession –– held by a wallet whose keys they control –– can people be free to do whatever they want with their BTC. There are many different ways to provide self-custody, and while it can be daunting at first, it’s a necessary step in transitioning from the old to the new system.
The “keys” discussed here are the private keys for a given bitcoin wallet. They can be considered the real key to the wallet in that they “unlock” the wallet and the bitcoin in it for spending. Without the keys, no bitcoins can be spent. This is because when forming a bitcoin transaction, the sender “locks” the bitcoin with information about the recipient. Thanks to asymmetric cryptography, this transaction dynamic ensures that only the entity that received the bitcoin can then spend it. And these expenses are made possible by the recipient’s private keys. So, as long as the recipient takes good care of their private keys, only they can ever spend their bitcoin – no matter what any government, institution or agency thinks or does about it.
By holding bitcoins in a wallet you create, you ensure that only you can move the bitcoins held 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 ultimately they control the private keys to that wallet and more often than not they are This is information that you cannot access. As such, it is necessary to request permission to move your bitcoin. Although such a request is automated, it is still necessary 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 raise awareness of this fact and inspire people to take control of their finances once and for all, moving from the traditional financial system to the new Bitcoin-based decentralized system. As the saying goes, Not your keys, not your bitcoins!
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