Welcome to BitBoy Crypto!
My name is Ben.
Today, we're going to be talking about a Bitcoin developer
that lost $3.5 million
because he didn't have his custody solution right.
So here we go.
This is Udi Wertheimer,
which we're going to talk about him in just a minute.
But this is Luke Dashjr.
From backers-- BitcoinHackers.org.
And this is what happened here. Okay?
It says,
"PSA: My PGP key is compromised, and at least many of my bitcoins stolen."
bitcoins
"I have no idea how."
Let me move that little hand here.
"I have no idea how. Help please. #Bitcoin"
You got a Bitcoin developer, a core developer, who's saying, "Help please."
That's not good.
Looks like some of it is conjoined to this address.
"What the heck @FBI @ic3 why can't I reach anyone???"
I don't know how much Bitcoin this guy has.
But $3.5 million worth of Bitcoin,
that's a lot of Bitcoin to have in one address.
So here was the comment here from Udi.
And I really didn't like this comment, to be honest with you, at first.
And I--
we'll talk about Udi here in just a second.
Says,
"You shouldn't manage your own keys.
If even one of Bitcoin's OG developers messes this up,
I really don't know how other people are expected to do it safely."
Well, I would say he had too much Bitcoin in one address.
And I don't think this is the right message here, okay?
Because this message is basically saying you shouldn't manage your own keys.
That's not true.
You should manage your keys smarter and more diversified.
And we're going to talk about that in just a second.
Who is Udi?
Well, I didn't know who he was either, actually, to be honest with you.
I'm having some technical difficulties here.
I don't know why this is not moving.
Okay. Here we go.
No editing in this video.
All my editors are off today, so we've got to run it.
So here we go.
Here's Udi Wertheimer.
He described himself as an independent developer and consultant,
blockchain skeptic from Israel.
He does have a personal website apparently.
We're not going to go to it.
Here's his experience.
Independent developer and consultant,
blockchain skeptic,
blockchain researcher lead,
full stack software engineer with PayPal,
full stack software engineer - eBay,
Ruby on Rails developer,
developer at EV-Plus, from PokerBuddy--
I think I used to use that actually--
communications officer--
maybe. I can't say it for sure.
I definitely want a communications officer in the Israel Defense Forces.
So there you go.
Switch for your service duty.
Now, here's what he should have added to his--
he honestly should have added this to his LinkedIn.
Clout chaser!
That's what Udi is!
He's a clout chaser! Okay?
What is a clout chaser?
Well, I'd love to tell you.
It's a noun.
It's informal.
A person who attempts to gain political or social power and influence,
especially through association or conflict with public figures.
Udi comments on all my stuff.
I don't hate the guy.
I'm not saying anything bad about him.
But he definitely is a clout chaser.
And that's what this certainly started out as as an attempt to clout chase.
And now he's turned it into an entire thread, which is really interesting.
So he was recently on a podcast with Eric Wall.
And these two guys are both reformed Bitcoin maximalists, I believe.
And they had a podcast where they talked about
why Bitcoin maximalism is just like basically an altcoin or an s-coin community,
here, you can see that.
And they talked about several different things.
And I thought it was very fascinating
coming from the inside of Bitcoin maximalism to the outside.
They talked about how was the early days,
how Bitcoin maxis appear to have a script to engage in discussions.
I mean, obviously, right?
The philosophy behind Bitcoin maximalism,
why Eric believes Bitcoin maximalism is a weird cult.
They go into a lot of interesting stuff.
So just kind of like telling you guys he's not a Bitcoin maximalist.
He's kind of anti-maximalist now, which is good.
So this is a thread we want to talk about today.
"YOUR WALLET SUCKS. YOU WILL LOSE YOUR CRYPTO
Today we learned that an OG bitcoin developer,"
that's Luke Dashjr,
"got hacked and lost all his coins."
Why did you have it in one place?
"If this can happen to the world's leading experts,
it can happen to you too.
Here are some hard truths the experts aren't telling you."
Now, I'll go ahead and say this.
I'd say, look, it's the same thing for us.
Not your keys, not your crypto.
We learned this lesson with Celsius.
We're experts.
And guess what?
We left all our money on a third party exchange like it was a bank account.
And we're idiots. We lost the money, so.
Hopefully, we'll get it back one day,
but I'm just telling you even experts,
they can make mistakes just like they are retail investor.
"The first thing to understand about crypto custody is that no single solution is "the best".
People have different needs, different skills, and different risk appetites.
There's no one way to cater to everyone.
Most "expert advice" ignores this and is therefore bad advice."
I think we do get a lot of blanket statements.
I think on this channel, we do a pretty good job of communicating to you to diversify.
This is an important point here.
"What are you trying to do? Answer this first.
Keeping an investment in bitcoin safe for 10 years isn't the same as flipping NFTs 10 times a day.
Trying to use the same solution for both is absurd.
You wouldn't use a bicycle to cross the ocean, or a plane to cross the street."
Well, what's really interesting is,
when you look at this from a maximalist perspective,
a maximalist doesn't think you should be flipping NFTs 10 times a day.
They think you should only be keeping an investment in Bitcoin safe for 10 years.
And that's why they say just know your keys--
or have your keys, have your crypto,
boom, put it in one wallet.
Just leave it there forever.
And if it turns to billions of dollars, then great.
Hope you don't get hacked.
Going on here to No. 4,
"Hardware wallets were created a decade ago to help people hold crypto for the long term,
with occasional simple send/receive. They're somewhat fine for that."
We've done many of those tutorials on this channel.
"But when you try to use them to trade on OpenSea or Uniswap,
they're not only cumbersome, they're also insecure!"
That's why we tell you, if you're a trader, you've got to keep active liquidity on an exchange.
It's too much to go back and forth from storage solutions, even a hot wallet.
"Hardware wallets are safe if you approve an action shown on the device's screen.
That's why when sending crypto you must validate the address shown on it.
But when using smart contracts, you can't tell what you're signing."
That's how I got phished back early in the day.
"A fake app might have you approve a malicious action!"
I got hit on an airdrop back in 2018.
I lost about $2,300.
It would have turned into I think $20K in the bull run.
It was a big hit because I got phished.
Udi says,
"So how do you keep your coins safe if you want to trade on-chain?
Recognize that hardware wallets can't help for that,
even if some OG holders like them.
Consider using those devices for long-term storage,
and a modern wallet app on your phone for on-chain trading."
Well, unless you're leverage trading, or you're day trading,
or you're, you know, doing even shorter timeframes,
you're going to have to have a way to do it much quicker.
That's why, unfortunately, if you're a trader,
having money on exchange-- sometimes it can be decentralized.
For the most part, people use decentralized exchanges
because they have the most liquidity and the most benefits and the most options.
It's just kind of a necessary evil at this point.
But don't keep all your money on there, only part of your trading portfolio.
"BEWARE OF SEED PHRASES 🚨
Seed phrases are an abomination.
They should never have gotten this popular.
They give you too many ways to shoot yourself in the foot.
"It's easy to write down 12 words!"
Yes, but it's hard to keep them safe for years and it's harder to learn how."
I don't know if that's true, but--
"PEOPLE SHOULDN'T HANDLE SEED PHRASES THEMSELVES"
Now, this is what I think is the bad advice.
"There are many ways to make a mistake even if you ARE an expert.
And most people aren't experts.
If your wallet gives you a seed phrase, TREAT IT AS TOXIC NUCLEAR WASTE.
IT'S DANGEROUS
BE EXTREMELY CAREFUL WHEN YOU TOUCH IT"
All you have to do is write down with a physical pen,
or with an engraving pen.
It's not hard.
It's not rocket science.
The prob--
let me tell you where the problem comes in with seed phrases.
The problem comes in when people take that seed phrase
and they keep a copy of it digitally somewhere.
Even copying,
just copying it,
like, command C on a Mac,
that opens you up to vulnerability.
You also be careful of your iCloud if you take a picture.
It's not hard.
Just write them down with a piece of paper and later engrave them on some metal.
You'll be fine.
So I think there are solutions to that.
"Ideally you'll use a crypto wallet that doesn't force you to handle toxic nuclear waste.
A wallet that doesn't give you a seed phrase.
Some options exist, like Argent, Casa, ZenGo, and others.
None of them are perfect yet. I hope they get better.
We need them to."
He goes on to say,
"As for third party crypto custody: it's not always bad.
It really depends on your needs.
It's good enough for Michael Saylor, maybe it's good enough for you"
Now, he's using actual custodian accounts,
which is a little bit different than your regular retail account.
"If you do it, probably diversify between multiple custodians to reduce your risk,"
bingo,
"and prefer regulated ones."
Or, "and prefer regulated ones,"
obviously, like Coinbase or Gemini.
"The truth is that crypto custody solutions mostly suck."
I actually tend to agree with this.
Still clunky.
That's how you know we're still early in this.
"In over a decade we didn't get very far.
We still don't have a good solution ready for the masses.
But I'm optimistic.
If we can admit there's room for improvement, we can do better.
Ignore the "experts".
Demand more."
I think, you know, beware of people that are shilling their own wallet to you.
I think that's what you've got to be careful of.
Because they're always going to present it as a one-stop-shop solution.
Diversify your holdings.
Don't keep everything in one wallet.
You're going to be much better off for doing that.
And you're not going to be a victim to losing $3.6 million
as long as you diversify across a lot of accounts.
One thing we do here at BitBoy Crypto is we have our BitLab Academy,
where you can actually get access to all kinds of tools and videos
showing you how to use these storage solutions.
So if that sounds good, make sure to check out bitlabacademy.com.
That's all I got.
Be blessed.
BitBoy out.