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Nick Neuman

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2021-06-16
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2021-06-16
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  1. “We want to encourage it. So our website is keys.casa. Our Twitter is at casa hodl. My Twitter is at n newman. That's N-N-E-U-M-A-N. And yeah, we'll love to talk to people over there.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  2. “Yeah, so I think a couple of things keys.casa is the CASA website. You can learn about using our product. You can learn about multisig and what that is. People feel like it sounds complicated. It's really not. We have a 30-day free trial for you to test out the product. If you've already got a hardware wallet, it's perfect. You just use that same wallet. If you're signing up for one of our premium plans, which is our three of five plans, we actually send you all the hardware wallets you need in a first package. And so we've got, we're really pairing our software with a lot of service. We have people that'll get on the phone with you and actually walk you through how to use the product. Make sure you feel comfortable with it. Be there in emergencies, all that kind of thing. So we're really focused on making self-custody easier for people because we think that's the incredibly important to Bitcoin.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  3. “So, I actually, personally, I'll admit I don't know enough about kind of internet networking security to know what it would look like if you could see whether somebody on the outside could see if you were running a full node in your house. But what I will say is that running a full node is a pretty critical part of the Bitcoin network. The more nodes that are running, the more resilient the network is as a whole and the more resilient that transaction ledger is. And so it's something that we think is really important. And I guess the trade-off is that it requires sometimes a little bit of setup, but it can be a fun hobby project for you to do on a Saturday. And then suddenly you're participating in the Bitcoin network and it's kind of fun.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  4. “Income taxes enforced is through the companies that are employing people. And so the employers are reporting how much they're paying people. And it's much easier for the government to go after an employer than the bunch of employees. And so I think it's, I think it will continue and it's basically just rather than the taxes being forced to change because it's no longer possible to enforce because I don't think that's going to happen. I think that it'll be more likely that people would move to jurisdictions that are more favorable around taxes or that and maybe actually by moving that causes the government that they're moving from to change their tax regime or how they handle it. There's a lot of questions around that. I just don't see. This becoming a question of they can no longer enforce taxes.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  5. “Yeah, I think that, I mean, I think it's possible that the way our taxes are handled could be changed to a sales tax or a flat tax or something like that. But I don't think it will be because it's forced upon the government. I think it's because the government will decide to do it because they think it's an easier way for them to make revenue. I mean, with the way that, for example,”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  6. “I agree with that. I agree with that, especially when you have things getting built that are building it in to everyday usage of Bitcoin, like I was talking about with me paying you. I think that as that stuff becomes more prevalent, it just gets so much more difficult for people to ban. What the government's really worried about is wide scale money laundering. And so probably the best way to actually manage that is to continue to monitor the entries and the exits from Bitcoin, essentially. And so Know, I think that. It's going to be relatively hard aside from going after software creators who are actually creating CoinJoin software to ban it.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  7. “Differently than that, it's less centralized, so that's why I don't think that's happened there yet. But it will be really interesting to see if it remains legal or what they do with it.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  8. “People who are privacy sensitive are going to continue to use this. I think that there are some interesting things that people are working on, like what the HRF is funding where you can actually mix a coin join into part of a transaction. So let's say I'm paying you for some good or service. We can do something where we're kind of mixing up our UTXOs in the process and spitting them back out to each other so that the amount of money is correct, but the history is obfuscated. There's like some really interesting things here that could get built into wallets. It will be interesting to see if the US government outlaws it or not. I think that there's a possibility that it becomes illegal. We've already seen some people running Bitcoin mixers get actually arrested for doing that. And CoinJoin just works slightly.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  9. “You have the ability to, if you can look at a piece of Bitcoin at any amount of Bitcoin and trace forever all the way back to when that Bitcoin was first mined where it's moved. And so for people who are privacy conscious, they may not want that and they don't like the idea of, you know, I don't want people to see where this Bitcoin came from. Maybe they bought it on an exchange and it's tied to their identity. And so they're like, I'm afraid that this could be used against me at some point. So I don't want this record of it going from the exchange to my wallet. What a coin join does is it actually allows you to mix these up with a bunch of other Bitcoin on the network, get the same amount out, but it's obfuscating where that Bitcoin came from originally. I think that this will be”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  10. “So, what a coin join is it's basically mixing your Bitcoin with other Bitcoin on the network without giving up ownership of that Bitcoin. And then you receive it back to your wallet when you're done mixing it around. So maybe you could imagine taking four people and they've each got one quarter. And this is where I think the name CoinJoin might even come from. I'm not sure. This seems like an apt metaphor. Everybody's got one quarter and they all put it on a table and you mix them all up so you don't know whose quarter was whose. And then you take your quarter back out. You still have the same amount of money, but you don't know where it came from. And so what this ties into is the transaction history on a blockchain like Bitcoin.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  11. “Game theory around getting in first. There's some interesting incentives if you're already not currently managing your own money supply. And some of these regions in Latin America, South America, Africa, these are some of the areas that actually fall under those criteria. And so we could see some of these places become the first adopters of Bitcoin. We already are seeing it with El Salvador, but I think that before anybody like the US or somebody in the EU pulls something like El Salvador does, you're going to see a couple more countries that are just smaller doing it first.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  12. “Oh no, it's okay. I think that we'll see it will be really interesting to see if other countries follow suit. And you've talked about this a lot, the game theory of country level adoption of Bitcoin. And you don't want to be the last country adopting Bitcoin. That will be very interesting to see, especially in countries that are dollarized or utilize other countries' currencies that they don't have control over as their main form of currency because they're already used to not having control of the money supply. Why have to rely on the good faith of the U.S. government who could decide to print money to benefit U.S. citizens when you know Bitcoin's not going beyond 21 million supply cap? And so I think that there's some really interesting”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  13. “I mean, you're seeing people on Twitter putting on the laser eyes and stuff when congressmen or whatever they're showing my ignorance, but the legislators in these various countries. And I think that it'll be really interesting.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  14. “And so, you know, you've got Miles Sutter from Square going down to El Salvador with Jack Mahlers and checking things out down there. You know they're thinking about how can they start expanding internationally using self-custody.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  15. “Yeah, well, so one I'm excited about it because Square is really good at hardware. And so them making a hardware wallet to help people secure Bitcoin is an excellent development for the ecosystem. One of the biggest reasons why I think he is doing this is that right now, Square with Cash App and actually being a custodian of dollars and Bitcoin and all of that is restricted to, I think, just the US, and if not the US only, it's the US plus a few other regions. Suddenly, when you offer self-custody and you're not holding those funds, And so, this allows square to take”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  16. “Actually, wanting to self custody themselves. But, you know, maybe a bank will go that way and say we want to be able to provide the possibility of self-custody for our customers. And we'll figure out how to offer the right services to continue making money off of their assets in other ways”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  17. “That's definitely what we're seeing today. These banks don't have the expertise to build up Bitcoin custodian practices. It's just completely different the way it works than securing dollars, which is what they've built in their entire business around doing. And so they're turning to other custodians that they can essentially subcontract to, like a fidelity or a NIDIG or, you know, BitGo. And so they're using these custodians and they're comfortable with that because that's the model that they actually understand. It's full custody using a custodian. I think it'll be really interesting is when we see the first banks that actually enable some form of self-custody. And maybe we'll see that. Maybe we won't. If we don't see it, I think that we'll see a lot of carnage as banks get disintermediated and people are.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  18. “Level self custodying any other form of money, it's a huge improvement. And so we're really expecting this pendulum to swing back. It swung towards the default is I have all my money in the bank and there's no other option today. I can choose whether I want to keep some of my money in my own self-custody. And then maybe I do so want to give some money to a bank like a BlockFi because I want to earn interest in a yield on it. But it's my choice. It's no longer just the default. And so it's going to be really interesting to watch that evolve in the US, but especially in countries around the world where they maybe have less trust in their banking system.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  19. “It was a great book. Super interesting. And so when people are using the coins as the main form of money, it was a real pain for them to use. It's a pain to drag around this heavy metal everywhere. So they started leaving their money with somebody like a gold minter or a bank. And then the bank would give them that IOU slip that says, hey, you have this much money here. And then they'd pass that around, but that also added some of this systemic risk to the system as the bank started lending out more than they had, you know, in deposits, the fractional reserve system, all that kind of thing. And so what's really interesting is that people gave up self-custody in the name of convenience. And now Bitcoin is bringing it back as a digital form of money. It's very convenient to self-custody your Bitcoin. If you consider the convenience level of self-custody in Bitcoin to the”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  20. “And I think it's, I mean, I think it's actually interesting here to when you're thinking about asking for permission, it's interesting to take a slight detour into going way back into the history of custody. When you think about custody and how it evolved, self-custody used to be the default for people. They were holding their own gold coins or whatever precious metal, right? And they were bringing that around as a merchant to trade with other people or to buy from stores, et cetera. And actually what really got me thinking about this was Nick Batia's layered money book.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  21. “And it's something that you can only really do with Bitcoin and with private keys because it has that just decentralized democratization aspect to everything about it.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  22. “Interestingly enough, most institutions use a multi-sig. So if you're talking about using Coinbase or Fidelity or some of these guys for securing Bitcoin, usually their setup is they've got some Bitcoin in a hot wallet where they're estimating how much will be needed on a daily basis to run their business. And then they've got the majority of the Bitcoin in a cold wallet that is usually a multi-sig, whether it's three of five or four of seven or whatever they choose. And so multi-sig is actually bringing this institutional grade security to anybody who wants to use it. And so when people are thinking, oh, Coinbase is better at this than me, no, if you're using CASA, you're using basically the same technology that Coinbase is to secure that Bitcoin, which I think is really cool.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  23. “And so, this could you could see where this could help protect against key loss because maybe you lost too many keys, but you still got two left. Well, you have to wait five years, but then you can access your Bitcoin again. However, what if somebody on the network could actually see that you had that setup? Then that gives them a lot more information if they're trying to break your security. And so Schnorr signatures comes in to actually hide that information from the broader network. And so there's some really interesting and smart things that the Bitcoin core developers have done with this update that I think will be, it'll be incredibly interesting to see how wallet developers utilize it over the next few years.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  24. “This gets really interesting is when you start to add in some of the features that taproot brings. So Taproot lets you set more advanced scripting conditions around basically smart contracting around what you want your Bitcoin to do. And so let's say you have a three of five multisig. You can actually set it using Taproot to say if I don't move Bitcoin from here for five years, this should turn into a two of five multisig. And then if I don't move Bitcoin for another five years, it should turn into”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  25. “Signatures and what schnorr signatures let you do is something called signature aggregation. So this means that instead of how it works today, where each of the signatures in a multisig is held separately in Bitcoin script, they can actually be collapsed into one signature and look like just a single signature wallet, even though it is a truly a multi-sig wallet. So this gives a little bit more privacy protection to people using multi-sig and allows that it kind of breaks the on-chain analytics aspect of it.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  26. “So it's a really interesting improvement to Bitcoin multisig. And Bitcoin in general and the scripting capabilities of Bitcoin in general, but focusing specifically on multi-sig, the way that it works today is when you are creating a multi-sig wallet, you're actually telling the network that, hey, this is a three of five multi-sig. When you're going to spend the money is when you're really telling the network. But anyway, you have to reveal that information that this has five total keys protecting the Bitcoin. You need three of them to spend. And so anybody who's watching the network can see how much Bitcoin is estimated to be held in three of five wallets today, that kind of thing. With the taproot upgrade, there's a piece of it called”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  27. “Matter if that key gets wiped because there's definitely been people over the 10 year history of Bitcoin that have done a firmware update, their device got wiped for whatever reason it needed to in that update, and then they lost all their money. And you just think you're keeping up with what you need to do, right? So it's important to keep up with firmware updates because a lot of times they have security improvements and that kind of thing. And actually for CASA clients, what we do is go through and test every firmware update and then say send out an email to everybody saying, hey, you got the green light to make this update. It's not going to wipe your device, that kind of stuff. But, you know, you want to stay up to date because there can be security updates. So make sure that you have it backed up or you're using multisig.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  28. “So, with a firmware update, you are downloading new information, new firmware that's getting installed on the device, and you want to make sure that you are downloading that from the manufacturer. And you can get it from their website just quadruple check the URL to make sure that you're getting it from the right place. If you really want to get fancy, you can actually verify it using cryptographic signatures and some of the manufacturers will actually post all of that information for you on their site. But what you need to know with when you're installing firmware is that you can sometimes wipe the device, sometimes firmware updates will wipe the hardware wallet because it's doing this big update. So if you've got some funds on there, you want to make sure that either that key is really well backed up using a seed phrase or you're using multisig, so it doesn't.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  29. “Yeah, it definitely is, and we never recommend buying your hardware wallets on Amazon unless it's coming from the verified manufacturer themselves. You should always buy it from either the manufacturer. So go to Ledger's website and buy it from them or from an authorized reseller. So for example, CASA is an authorized reseller of ledgers and treasures. And we have all these processes in place to make sure that they're not tampered with. So you can see who all of the authorized resellers are if you go to those companies' actual website. But the safest way to do it is just to make sure that you're ordering from the manufacturer or from an authorized reseller. And then you don't have to worry about somebody tampering with it in the middle.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  30. “Really important to make sure that you're using multi-sig because if they scrape that key, they still need to go around and find all your other keys in order to be able to do anything.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  31. “Well, so the hardware wallets that have secure elements are generally more secure than the ones that don't. And so the way that the secure elements work, and I'm getting a little bit out of my depth here because I'm not a hardware guy, but basically the secure elements are built to protect data and not allow it to be extracted from that chip unless the device is authorizing it, basically. And so that's why they use pins to kind of activate these secure elements and say it's okay to spend this money or use this key. Then there's some hardware wallets that if they don't have a secure element, you know, if somebody has physical access to them, they can actually be able to scrape the Bitcoin, the private key, and get the Bitcoin off of that key. And so this is why if you're using some of those wallets, it's”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  32. “You need physical access to be able to steal any data off of those. And for some of them, you can't even with physical access, you can't steal that key. So what they look like is the second.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  33. “So, a hardware wallet, some of the brands that you may have heard of are like cold card or ledger or treasure. And essentially what it is, is it's a device that has a computer chip on it, usually a secure element, which is a highly secure computer chip. And that chip holds your private key. And the hardware wallet usually has a screen as well. And so what it does is it actually acts as a private key that never touches the internet. And so this is important because let's say, you know, if you're holding your keys on your computer through some software wallet that's on your Mac, if you get malware and it is able to scrape your private key, they could steal all of your money. Whereas on one of these hardware wallets, since they are offline special purpose devices, there's really no malware for them.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  34. “In a bank, you have your checking account, your savings account, and the vault, and each of those is, you know, well, maybe the checking and savings account aren't that differentiated these days, but they used to be more differentiated. You have different levels of ease for how easy it is to spend. And then corresponding levels for how secure that money is. And when you have this all combined into one product that makes it really simple and seamless to manage all of it, that is the vision that we really see.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  35. “It's pretty easy to manage because people are would, let's say they're securing $5,000 worth of Bitcoin, they're probably already using a hardware wallet. And so using a multisig setup where a key is on your phone, which you already have and a hardware wallet, which you already have, makes a lot of sense. It's really simple. And so when people start to get to that five to ten thousand dollars worth of Bitcoin range, it really makes sense to use multisig. You don't need $500,000. But when you're starting to talk about ramping up to like having five total keys where you need three of them to spend, you're managing four of the keys yourself. This is when it's like, you know, you're kind of looking at $100,000 plus of Bitcoin that you're actually securing. And so the way that the future will work when people are being their own banks is that they will have different levels of bank security. Just like.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  36. “So it looks, you can see the foundations of it in the CASA app today. So if you're using CASA to secure your Bitcoin, you can see we have a few different levels of security within the same product. So you've got your Bitcoin hot wallet, which is just a single key on your phone. And this is what people use to send Bitcoin just like you were just saying, really simple. I'm securing $100 worth of Bitcoin. I want to send somebody 50 bucks for my buy-in for a poker game one night. I can do that really simple. All I need is my phone. And then it kind of goes up from there. And so you can have a two of three multisig where, you know, you've got three keys. One key is on your phone, one key is on a hardware wallet, one key is held by CASA. You need any two of those to spend. And so in that scenario, that is a”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  37. “Any seed storage. We think that people will be using keys in a way where they no longer need to restore a single private key because they'll be using some form of multi-sig where instead of needing to restore that key, if they lose it, they just replace it. And they still have access to their Bitcoin through the other keys in their multisig. And what that means is that since you no longer need to restore it, you can just replace it. There's no reason to keep the private or the seed phrase for that key.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  38. “Multi sig to transfer the bitcoin to a new whole key set where all of your keys are healthy again. And so this makes it way simpler for people to self-custody. And I think it's going to be the way that everything moves. I think that this is kind of controversial, honestly, Casa's stance on this, but we really think that seed phrases in 10 years will not be used by the majority of people owning Bitcoin.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  39. “Confusing to people, and they are a pain to try and back up. Nobody wants to spend an hour kind of hole punching into a metal plate in order to have a backup that they can then put somewhere and feel anxious about for the next five years, wondering if, you know, something's happened to it. It just doesn't seem sustainable from a mass adoption standpoint in my perspective. And so that's where I think it's really interesting that multisig comes in where with each key in your multisig, it's no longer a critical objective to protect and be able to restore a single key. So let's say you lose one of these keys instead of having to restore it from this seed phrase that you backed up onto this metal and buried in the woods somewhere, you can actually just replace that key and use the other keys in your”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  40. “The idea with the middle backup is that it's just much more resilient against any sort of degradation or accidents over time. And so they'll actually, there's a few different ways you can do it. There's some that where you will inscribe it into metal or hole punch it into metal. You can have little, some of them get real fancy and have little letters in metal that you put in order. Definitely don't recommend using those because those can all fall out suddenly or seed phrase is gone. But the article that Jameson wrote was basically going through all of these things and seeing what lasts the longest through all of these different types of accidents. And he was, you know, lighting them on fire, dumping them in acid, letting them sit in water for a long time. So they rusted, all that kind of stuff. And it was pretty interesting. My opinion on this is that as a whole, seed phrases are”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  41. “Yeah, so when you're writing down a seed phrase, for example, you need a safe place to put it. And what people have done in the past is put it on a piece of paper or something, but that isn't that safe. A piece of paper can very easily get destroyed by a flood or by a fire or something like that. And so what people have”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  42. “If you have multiple institutional custodians or companies that you are trusting to hold different keys in a multi-sig for you. So even more than just CASA, maybe it's Casa's holding one key, and Fidelity is holding another. It's really up to an individual person's security model at that point. So some people may say, I feel perfectly happy knowing that Casa and Fidelity are not going to work together to seize my Bitcoin. But so I want to use them both in order to make it so I have to, I don't have to manage as many keys. And then on the flip side, somebody could say, I don't trust anybody. I want to have all the keys myself. And I feel technical and competent enough to do that. So that's when he started getting into just what are the individual security models for different.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  43. “Multi say gives you a significantly higher level of protection when you're self-custody in your Bitcoin. So now, just kind of backing up to your first question, which was what about using a hybrid model where you actually have some institutions that hold keys in a multi-sig? We think that's pretty interesting and we do that today with CASA's product where out of the three or out of the five keys that you're holding, CASA actually holds one of them as an emergency. So let's say in our three of five setup, you lose two keys. You'll have three keys left and one of those keys will be held by CASA. So you can always count on us to be at least one of your three approvals. But we can't move your funds by ourselves. So CASA can't steal your Bitcoin because we only have that one signature. So we're able to help, but we aren't able to, you know, fully take over and be evil with your Bitcoin. I think that there's a really interesting idea around what happens.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  44. “So, what that means from a security protection standpoint is two things. On the loss side, you can lose a key and not lose access to all of your Bitcoin. You can actually lose in that three of five scenario. You can lose two keys and not lose access to your Bitcoin. And then from a theft perspective, a thief would need to steal more than one key from you in order to move your money. Let's say they break into your house and find your ledger hardware wallet. That's not going to be enough to allow them to actually move your Bitcoin. They're going to have to find two other keys, which for what we recommend, actually people should disperse them geographically, which would mean that a thief would have to go to find and break into multiple different locations in order to gather these keys.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  45. “Okay, so with a private key that you're holding yourself. If you lose that key, you have lost all of your Bitcoin. And this is a huge risk for people that are holding their own keys. And this is part of the reason why people say I'm going to hold my or allow Coinbase to hold my keys because I trust that they are better than me at doing this. Well, what multisig does is it gives you a significantly higher level of protection against both loss and theft. So instead of just having one key protecting your Bitcoin, you have multiple keys protecting that same pool of Bitcoin. And so let's say you have a three of five multi-sig, like you mentioned earlier. That means that you have five total keys protecting your Bitcoin and you need to approve a Bitcoin transaction with three of those keys in order for the network to accept that transaction.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  46. “It's just you, and it gives you, in our opinion, at CASA, a huge advantage over other people that are using Coinbase or any other custodian for holding their Bitcoin.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  47. “Controlling the keys that control the Bitcoin. You can either hold the keys yourself, which is called self-custody, or you can use a custodian, which is like using Coinbase to hold your keys. And so when you're using somebody like Coinbase, you're actually saying Coinbase, you hold the keys that control my Bitcoin. And when I want to, I will ask you to move it and you will move it on my behalf. So it's really like having a Bitcoin IOU and it's very similar to using our traditional banking system today. Whereas when you self-custody Bitcoin, you actually are disintermediating banks. Everybody likes to say you're being your own bank when you're self-custodying your Bitcoin. And so holding the keys yourself is a way that you don't have to trust anybody else with the security or movement of your Bitcoin asset.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  48. “Allows it to be so trustless and decentralized because since everybody agrees to use all of these equations and these equations are very foolproof because of how cryptography works, that's what allows everybody to trust how much everybody else owns of Bitcoin and where they're sending transactions, et cetera. And so that's why it's so cool because there's so much kind of cryptographic magic underpinning Bitcoin. And when it comes down to it, it's just math, but it's very simple and elegant in its simplicity. So we have all this explanation of here's what a private key is. Here's how you create it. Here's what a public key is. Why do these matter is the real question. When you have Bitcoin, all Bitcoin ownership is controlled by private keys. And you really have two options with actually.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  49. “An X Pub is basically a form of private key that allows you to public key that allows you to derive any number of Bitcoin addresses, basically an unlimited amount of Bitcoin addresses. And so the way that you create a Bitcoin address is by taking a public key or an expub is a form of a format of that public key. And you're actually running it through a calculation called a hash function and that you're doing this hashing and then encoding and that creates a Bitcoin address which can be read by all of the software on the Bitcoin network. And so this is Bitcoin is essentially a bunch of layers of cryptography built on top of each other that everybody agrees to use. And so this cryptography is what a”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT

  50. “Yeah, exactly. And so this made it easier for people to write down those 24 words on a piece of paper or put it on metal or something like that. And then what that means is that in case they ever lose a key through the, you know, they've messed up the software that they were using the key through or they lost the hardware that was holding the key. They have this 24 word seed phrase to recreate that key and actually make it usable again and access those funds. And so anytime you are self-custody in your Bitcoin, you actually are most of the time given a seed phrase to back up that key so that you have that protection against loss. And it's a whole nother story about whether that actually works. I don't think it necessarily is that great of a solution, but we can get into that later.”

    2021-06-16 · We Study Billionaires · BTC030: Bitcoin Security and Self Custody w/ Nick Neuman (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT