Eliminate SPFs, Test Redundancies

Merry Christmas everyone!

A few days ago this tragic post was made to Xwitter:

These posts come up from time to time and they're always heart breaking. Sometimes, it's a rugpull of some centralized service that gets hacked or runs away with user funds. Sometimes it's self custody gone wrong. Often, it shakes the foundations of people in the space who are new, not 100% confident in their wallet setup, or aren't comfortable with the growth in the value of their Bitcoin.

This leads to controversial responses like this:

Alex is CEO of an exchange so you could argue he is biased in this take, but he likely has insights to the capabilities of the "average person" in the space. Regardless, I think the problem is that there isn't a lot of money in promoting the responsibility that comes with self-custody. This is compounded by the fact that there are many ways to do it and there is no single right way for everyone (although this doesn't stop people from arguing for method over another).

I believe there are certain practices that should be applied to every setup, whatever the final form may be. Here are two important ones:

• Avoid single points-of-failure (SPFs). This means any single object or piece of information that would be enough for someone to move your funds. e.g. if you have a single signature wallet without a passphrase, don't keep your back ups in plain sight. Put your paper or metal seed words in a safe, or behind some other kind of protection.
• Test redundancies. If you're "pretty sure you have a backup somewhere" and you haven't practiced recovering a wallet and sending funds from it, you don't know that you actually can recover funds. I've known people to load bitcoin into a wallet for YEARS that they never withdrew from. Don't let it get to this point. Whatever backup method you have, test that you can still access them!

These two points will help you optimize two opposing goals: your ability to access your Bitcoin, and protection from others. You only have this granularity of control if you self-custody so in my opinion, it's 100% worth doing.

Stay humble and stack sats
Eliminate SPFs and test redundancies,
Corey San Diego

P.S. If you're local and want someone to walk you through more best practices, check out https://sdbitcoiners.com/about/support/