*This is not financial advice and in no way am I advocating for Bitcoin but I am presenting the information I have found online on why Bitcoin appeals to certain audience and why it is getting increasingly popular or important depending on where you are to have self-custody.
Bitcoin has really been on everyone’s topic of interest, even my mum has been talking about it. Mainly talking about how the price fluctuates so crazily over a short period of time and why I didn’t sell it when it reached $60,000 haha.
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What is Bitcoin?
Bitcoin was created by the anonymous Satoshi Nakamoto in 2008 after the financial crisis when he realised that a decentralised currency was needed to bring the power from the government and banks to the people as it is their own assets and placing in with the banks would explore them to many risks that they might not be aware of. This was because the banks technically caused the financial crisis but was not made to compensate the many individuals who lost money as they invested in products marketed as being “safe” but in the end was much more risky.
Other recent examples involved governments preventing protest by denying access to people to their deposits to ensure that they follow what the government hopes for. Also, there are news on how people are unable to withdraw their money in the Bank and no proper explanation is given.
Financial institutions have been the trusted third party to verify transactions and is a huge power as they can take fees in the process and also set rules on how long these transactions will take or whether they would require more information before allowing the transaction to proceed.
Using Bitcoin is different as
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. - Taken from https://bitcoin.org/en/
Read more: Bitcoin Whitepaper
Becoming Bankless / Is Self-custody the way to go?
Cryptocurrencies became popular as people were making millions from it and besides that, there was a narrative that you owned your tokens and everything was under your custody if you used a hardware wallet (Ledger or Trezor) unless you place it into a centralised entity (eg, lending platforms or exchanges) which would mean “Not your keys, not your coins”. It brought the power back to individuals especially to those who were in countries that does not have access to a banking system or depreciating currency. I would say that the Singapore currency is relatively strong and stable and we do have very good financial infrastructure to store our money and assets. Even regulation is pretty stringent here and we have protection for our deposits. So for us, we do not feel so much towards self-custody of our own assets as we have proper infrastructure for storage.
But for those with no access to banks or have a depreciating currency, Bitcoin provides a great proposition as it can be store digitally on the blockchain and with digital wallets as well as hardware wallets available, you can access your funds from anywhere as long as you have internet. Bitcoin and cryptocurrencies in general are very volatile assets, I am sure we are all aware especially so recently, due to the wave of liquidations which saw cryptocurrencies fall in prices. However, for those earning depreciating fiat currencies, Bitcoin is still a very attractive asset to buy as it is border-less where anyone from the world would be able to receive Bitcoin directly, no money changer or exchange rate required and with a faster speed of receiving it compared to using a international wire transfer which can take a few days.
But for the individuals with depreciating fiat currency, the most attractive point is that people will still want to buy Bitcoin compared to their depreciating fiat currency which most likely can only be used in their country. This alone is already a huge factor as there can be assurance that there will be a buyer for Bitcoin (although we cannot predict the future but right now, there are still buyers) and it forms as a part of their savings although it’s value can still drop rapidly but holding fiat for them presents worse issues in terms of depreciating.
Recent events highlighting the need for self-custody
Due to Celsius announcing that they were pausing withdrawals and transfer on the assets that people have deposited with them, many on twitter were advocating for everyone to withdraw from lending platforms and small exchanges especially so after learning of 3AC’s troubles as many were involved in providing liquidity to 3AC with no collateral as 3AC was too big to fail. So all came crashing down when news of 3AC being insolvent which are just from tweets I have read. No statements have been released as of now from 3AC so we can hope for the best but prepare for the worse.
I did have some assets with Celsius but I withdrew them quite earlier on as I didn’t quite like the interface and mainly on that you needed to wait 24 hours after giving your withdrawal address before you are able to withdraw your assets. After which, seeing the news, I have since moved most of my cryptocurrencies though not much to the blockchain using my hardware wallet (Ledger Nano S, if you like to get one, you can use my affiliate link). I also left a small amount on FTX app just for some yield and easy access.
The domino’s effect that is shaking up the crypto industry is once again highlighting the fact that self-custody is very important of course, on the flip side, you have to keep your seed phrase safe and not be scammed as well but those are usually mistakes of your own. So far, the customer’s funds in Celsius still cannot be withdrawn and I would imagine that once they allow it, there will be a rush of withdrawals as once bitten, twice shy. No one would want their funds to have withheld again even if assurance is given.
We are in an interesting and volatile period, the best protection is to educate yourself and be up-to-date, I think hardware wallets would be a must have among investors as they understand the importance of self-custody. It is a great time to learn more and I think you can see that from the pace and rate that I am releasing articles, I have been reading up lots and learning. However, youtube videos are really tedious, I salute all the youtubers, it is not easy but I would say I have found inspiration for many topics by exposing myself to more content and experiences. Enjoying it so far as long as I am not looking at my portfolio, ouch. Hope you guys stay safe and HODL on the ride!
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► How I Protect My Bitcoin using Ledger: Get your ledger from HERE (Using my affiliate link with FRIEND-7ZB4V7C will help me where Ledger will pay a small incentive that's not from
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