By: Chris Curran, AnchorWatch Operations & Customer Experience Manager
Do you ever worry that your Bitcoin self-custody security might be compromised? It can hit you like a gut punch! If you’re confident you’ve secured your Bitcoin properly, this uneasy feeling will be short-lived. Properly securing your Bitcoin requires responsibility and planning. Self-custody of Bitcoin introduces risks that must be controlled. Luckily, Bitcoin custody solutions have greatly improved!
During a Bitcoin meetup earlier this year, I had the pleasure of meeting a well respected early Bitcoiner, and we discussed the evolving best practices for Bitcoin held in cold storage. He shared his early Bitcoin custody journey, during which he utilized his home printer to create a paper wallet. He joked about how the security model at the time was to laminate the paper to prevent water damage. As we both laughed, I asked about fire, and he quickly quoted Dumb and Dumber, he jokingly said “That’s a risk we were willing to take!”
Since then, the early Bitcoiner has taken more control of his Bitcoin with a robust multisig setup, but he recognizes that even the best security model isn’t immune to potential risks. He mentioned that occasionally he becomes deeply concerned about his Bitcoin security, imagining the worst-case scenarios:
- Is my setup secure?
- Is my backup sound?
- What if something happens to me, will my family know how to access my Bitcoin?
- Did I forget my PIN numbers to access the hardware wallet?
- Is my tamper-evident bag secure?
- Is the firmware on my hardware wallet updated?
- Could I be held for ransom, or worse my family?
- When is the next time I need to perform a key health check?
The early Bitcoiner said that while irrational fears sometimes surface, he dismisses them as uncontrollable concerns and continues his day. Occasional doubts remind him that even the best security can face unexpected issues and uncontrollable events.
Anxiety decreases when you manage foreseeable risks and prepare for the unpredictable and uncontrollable ones. The table below provides examples of controllable and uncontrollable self-custody risks to consider:
In our commitment to giving our customers unparalleled control over their Bitcoin, we are thrilled to introduce Trident — AnchorWatch’s multisig coordinator. At its core, Trident empowers users to coordinate their Bitcoin in cold storage using signing devices, commonly known as hardware wallets. What sets Trident apart is its seamless ability to integrate a trusted third party as a signer in the multisig quorum. Additionally, Trident provides customers greater control over their Bitcoin by adding recovery layers with timelocks and collaboration with multiple institutions. This ensures recovery of a customer’s Bitcoin in the unfortunate event they lose all their signing devices.
Recognizing the spectrum of risks that our clients face, we’re rolling out cold storage Bitcoin insurance policies to combat those uncontrollable risks. AnchorWatch is here to provide peace of mind to our customers by insuring many of the uncontrollable events they fear (e.g. losing access to one’s Bitcoin due to loss, theft, fire, natural disaster, certain instances of collusion, and theft).
AnchorWatch is building an institutional-grade custody solution that will be at your fingertips in the coming months. AnchorWatch provides further control over previously uncontrollable risks associated with Bitcoin held in cold storage. We look forward to providing our customers peace of mind through our insurance and custody solutions.
Chris Curran acts as AnchorWatch’s Insurance Operations & Customer Experience Manager and is focused on delivering an end-to-end customer journey that supports customers from first contact through ongoing support. He earned his doctorate in performance psychology, and previously developed and delivered training programs at Reinsurance Group of America (RGA). Prior to his time at RGA, Chris worked as a Department of Defense contractor designing and delivering world-class resilience and mental performance training to soldiers. Chris is a licensed P&C producer, he possesses knowledge of Bitcoin best practices and vault design, and he supports the collection of primary information during underwriting.