Cryptocurrency was invented more than a decade ago, and its popularity has only skyrocketed, especially during the pandemic. And some users are even switching to them from their traditional banks, and for a reason.
While many users become interested in crypto in the hopes of earning lots of money fast, the reality is that cryptocurrencies are a much safer alternative for storing funds. Money isn’t affected by inflation and no one has access to your money except you.
However, crypto is a valuable prey for cybercriminals, which is why certain security measures have to be implemented. This can be a password manager which will help you regularly update your passwords without forgetting them and metal bitcoin seed storage devices.
To learn more about the crypto environment and how to safely handle your funds, we reached out to Chris Gonyo, the Co-Founder of Crypto Key Stack, a company that provides stainless steel key managers.
How did Crypto Key Stack originate? What has your journey been like since?
Key Stack started by accident in late 2017. I had a flimsy plastic hardware wallet and my backup was 24 words written down on a piece of paper. From a disaster recovery standpoint, it was clear that my self custody setup was not physically robust. A simple flood or small fire could take both my plastic signing device and paper seed and render them useless.
I wanted to fix that so I set off to the hardware store to build a solution for myself. I had stainless steel and a rotary engraver in my cart when I realized my bill was already over $100. I put everything back and started walking home.
On that walk home, I decided I wasn’t going to make one steel backup. I was going to make 50, and I wanted to sell them for half of what it was going to cost me to make one for myself that day at the hardware store.
Three months later – prototype in my pocket – I brought it to a local Bitcoin meetup for feedback. The community response was incredibly supportive and by the end of the night, I had made my first sale. Less than one month later the prototype sold out online. I had found a way to add value to the Bitcoin ecosystem and Key Stack became my full-time passion.
Fast forward four years and Crypto Key Stack is the backup of choice for thousands of Bitcoiners looking to empower themselves through self custody. It’s been an incredibly humbling and eye-opening journey.
Can you introduce us to what you do? What is Bitcoin Seed Storage?
We’ve been trained to store our capital with the antique banking system. In doing so, we turn our backs on the fraudulent business practices that banks exploit and give them all of the control.
We see a bank like Wachovia get busted for laundering 380 billion dollars and escape prosecution with a $160 million slap on the wrist.
The banking business model is to break the law – generate revenue, pay bank executives bonus, offer politicians and regulators lucrative speaking engagements, pay a fine that represents a fraction of the revenue generated from the fraudulent practice, rinse, and repeat. Can you recall the last bank executive that went to jail?
Bitcoin seed storage allows you to stop supporting these corrupt institutions and take full ownership over your capital. If you have your bitcoin seed you can spend the funds associated with your key at any time, with anyone. Bitcoin doesn’t discriminate based on political views, gender, race, sexual orientation, or religion – it’s software running globally – with no central authority to kick you out.
The bitcoin seed is the key that allows an individual to dump the corrupt banks and self-host their assets in a sovereign manner. It’s true ownership.
For anyone ready to ditch the banks and transition to self custody of your assets, it’s really helpful to understand how the following pieces come together.
- Bitcoin seed: your encryption key that allows you to unlock and send a transaction tied to your ownership stake in the bitcoin database.
- Bitcoin: an entry in a database – stored redundantly across the globe by anyone who wants to run the software.
- Signing device: (hardware or software wallet) uses your Bitcoin seed to sign a transaction and broadcast it to the global bitcoin database.
Common Key Structures:
- Single Signature: One Key is created. Anyone with that key can spend bitcoin from the associate database entry.
- Single Signature with Passphrase: One Key is created and one passphrase is created. These would be stored in separate locations and both would be needed to spend bitcoin from the associate database entry.
- Multisignature: the most common form is the 2/3 setup. Three keys are created – any two of three keys sign a transaction before bitcoin can be spent from the associated database entry.
- Inheritance Planning: bitcoin is positioning itself to become the future reserve currency for our planet. If your goal is to create generational wealth then it’s critical to set up inheritance planning accordingly.
- Privacy: security and privacy are hands in hand.
What are the differences between hardware and software wallets? Which option is more secure?
A bitcoin wallet is a physical signing device or software interface. It allows you to spend your bitcoin by digitally signing a transaction and broadcasting it to the bitcoin network. Once approved by the network the global database entries are updated with the new amounts for the sending and receiving wallets.
Software-based wallets are inherently less secure than a quality hardware wallet. A software wallet will store your seed on a device that is connected to the internet for quick spending. These work great for your daily purchasing requirements but are not designed for long-term storage. I wouldn’t recommend someone storing large amounts of bitcoin on an Internet-connected device. If you are uncomfortable walking around with $500 in your pocket you shouldn’t feel comfortable walking around with $500 of bitcoin on your phone and should consider moving it to a hardware wallet.
A high-quality hardware wallet (dedicated signing device) will store your encryption keys on a secure element, on a device that never connects to the Internet. This is one of the best ways to transact on the bitcoin network.
Always remember – you must back up the seed associated with both software and hardware wallets. Your signing device is essentially a plastic USB drive that will eventually fail. You will want to back up your bitcoin seed by etching it into the metal seed storage device. This will allow you to restore your wallet to a new signing device in the event of device failure. Stainless steel bitcoin seed storage is preferred over paper backups because they are resilient and robust in the face of fires and flooding.
Do you think the pandemic influenced the way people perceive the crypto landscape?
It’s been an eye-opener for many people on how the US dollar works. Many people have been surprised to learn that the dollar value isn’t backed by anything and that the government can inject trillions of dollars out of thin air with a flick of the pen. It’s not backed by gold or the largest standing military in the world and our belief in its purchasing power. Bitcoin is the peaceful protest many have been seeking. It’s the opportunity to say, nah – keep your manipulated pieces of paper – I’m opting out of your state-controlled currency and won’t let you dilute my life savings with your money printers.
Since digital assets are a relatively new technology, there is still some confusion and myths surrounding them. What misconceptions do you notice most often?
If you're looking at Bitcoin as a get-rich-quick scheme, I strongly suggest revisiting your time preference level. Bitcoin isn’t here to make you rich – it’s here for you to opt-out of your current government and bank-controlled currency and into an open system where the rules are known and the same for everyone. This is a peaceful movement to empower the individual.
What are the biggest mistakes that new crypto owners tend to make?
Gambling addiction is a tale as old as time and a trap that many new crypto owners fall into. As you go down the rabbit hole I strongly recommend learning everything you can about bitcoin before experimenting with any cryptos or deciding to build up a leveraged position(aka gambling). If you push too hard it’s not if you will get wrecked….it’s when will you get wrecked. Slow, steady, learn, grow.
In your opinion, what are the most serious cybersecurity threats prominent nowadays?
The largest cybersecurity threat to humanity is our lack of privacy as individuals. We’ve normalized the mass collection of data while ignoring the potential repercussions. Corporations, governments, and individuals can easily collect these data points to manipulate our actions at scale in an attempt to grow their level of power. Social engineering is easier than ever.
What measures should average individuals take to protect themselves from these new threats?
Privacy is a never-ending pursuit – you can’t just flip a switch and become private one day. Start with the low-hanging fruit and keep building off of it. Use a good VPN and a hardened Firefox web browser. Switch to an encrypted email service like ProtonMail and remove services like Facebook and Google from your life. Add in a password manager, 2FA and you are already better protected than a majority of internet users. All of this could be done over the weekend with a minimal amount of effort and cost.
And finally, what’s next for Crypto Key Stack?
We reserved a booth at the biggest Bitcoin party of the year – The Bitcoin 2022 conference in Miami from April 6-9! We will have Key Stack units available to demo and purchase in the lightning Bazaar. The educational content will blow you away. Please be sure to stop by the Crypto Key Stack booth to say hello! If you aren’t going to the conference you can pick up a Key Stack online at cryptokeystack.com.