Today is Bitcoin Day, the anniversary of the Genesis block that marked the beginning of the Bitcoin blockchain in 2009. This year, with the prize for the Bitcoin shooting for the moon, bitcoiners have more reason to celebrate – and more reason to assert their sovereignty over their private keys.
Proof of Keys, an annual event first initiated by Trace Mayer, is an informal celebration designed to remind Bitcoiners that monetary sovereignty is an integral part of the Bitcoin ethos. It lies at the heart of the well-known Bitcoiner mantra: “Not your keys, not your coin.” In other words, if you don’t control the private keys for your Bitcoin, you don’t actually own the coin.
The saying is a reminder that Bitcoin was designed to give users complete control over their finances. It’s also a reminder of the possible consequences of trusting your Bitcoin keys with a third party (like losing your money in an exchange hack).
Establishing monetary sovereignty
“Anyone who doesn’t want you to have your own private keys is your money enemy. They don’t want your money to be free and independent, ”said Mayer in the run-up to the 2019 opening event.
The effects of the reliance on others processing, exchanging and holding your cryptocurrencies are not negligible. They have acute consequences and compromises for your privacy and limit interaction with your own money.
The Financial Crimes Enforcement Network (FinCEN) gathers extensive personal information about the financial transactions of millions of people made available to them by financial institutions, even if those people have not committed criminal offenses.
This year, keeping your keys in a personal wallet takes on added importance. FinCEN has proposed a plan that will force exchanges to meet the new know-your-customer (KYC) requirements when users try to transfer their money to a personal wallet. Such a requirement threatens to undermine cryptocurrencies’ early promise of privacy and self-sovereignty. (Note: FinCEN will only accept comments from the public on this topic until January 4, 2021).
Add to this the recent delisting of privacy coins by many exchanges, the above-mentioned exchange hacks that have no signs of stopping, and other snafus like missing exchange key holders accidentally freezing transactions: taking control of your own private keys and the first and will be last line of control when it comes to your crypto is more compelling.
The most basic way to exercise your currency sovereignty is to keep your private keys in your own, untrusted Bitcoin wallet. This means that you take every bitcoin you own from exchanges and purses and transfer the keys to a wallet that you control.
Proof of Keys takes the notion of self-sovereignty even further by adding the saying, “Not your knot; not your rules. “The point here is that it’s equally important to withdraw your keys on a Bitcoin node that you are running. That way, you can do your own validation yourself without having to trust other people’s nodes to prove that Your keys are your own.
Proof of Keys participants typically agree to obtain private keys on or before January 3rd. On Twitter, this promise is publicly marked by adding a series of icons to their username or profile: [Jan/3➞₿🔑∎] The date, the arrow, the bitcoin unicode and the key represent the intention to hold the keys. The block signals that the verification process has been completed.
Self-managing your keys can be tricky for the uninitiated – and even for some who have long owned Bitcoin. To help people take control of their private keys securely, Casa is hosting its first KeyFest, a three-day virtual conference, from January 5th to 7th.
A new webinar is offered every day, followed by a workshop teaching users about different ways they can keep their Bitcoin safe. Speakers include Adam Back, CEO of Blockstream, Balaji Srinivasan and Caitlin Long, co-founder of Avanti.