[AUDIENCE] I really enjoyed the testimony you gave to the Australian Senate. I thought that was excellent.
In [the testimony], you mentioned and warned against the dangers of custodial accounts.
[ANDREAS] Yes.
[AUDIENCE] At that point, I realized all of my cryptocurrency was locked up in custodial accounts.
By implication, it wasn't mine because I didn't have the private keys.
[ANDREAS] Yes.
[AUDIENCE] How do you use bitcoin both as a long-term store of value, and as something you transact with,
between all the available options: paper wallets, custodial accounts, and other kinds of online wallets?
[ANDREAS] How do I personally use that?
[AUDIENCE] Yes. And how would you recommend someone go about using it?
[ANDREAS] Okay. Since 2013, the maximum amount of time I have left currency, crypto or fiat, on an exchange...
is fifteen minutes.
I transact weekly, sometimes more often. I don't day trade, that's not my purpose.
I use it as a working currency. I get paid in bitcoin and in ether; I use [them] to pay my bills, to live.
I live in the Bitcoin community, so I have to transact. I often have to exchange because I can't always...
buy the things I want with cryptocurrencies.
How do I [use exchanges]? In and out. In, three confirmations, sell, ACH or bank transfer out.
I don't even leave fiat on exchanges. I don't trust them to hold money.
I don't trust banks to hold money, so how am I going to trust a two-year-old startup that has six employees?
[Laughter] Are you kidding me? I don't leave money on exchanges.
That's difficult to do if you're day trading.
If you day trade in this environment with these assets of great volatility, you're a brave person. [Laughter]
How do I use it? My holdings are in tiers. Think of it as: hot, warm, cold, and deep freeze.
On the cold side, I hold a (honestly) small amount, because this hasn't been a most profitable idea:
jumping into an untested technology and not getting paid for a couple of years.
But anyway, I have a small amount of bitcoin in deep freeze storage, meaning they're held on keys...
not instantiated on any electronic device.
They exist in such a way that they're encrypted with a memorized passphrase,
which I have also communicated to people who might become my heirs, so [the bitcoin won't] get lost with me.
That's cold storage. Then I have an intermediate tier, which is on several hardware wallets;
pin-protected, passphrase-protected, backed up with mnemonic phrases.
Then I [have] a warm tier [with] a small amount of operating cash that I use for my businesses,
to pay contractors and subcontractors, etc.
Those are in multi-signature [addresses], where either there are other people who are required to consent,
or multi-factor wallets in which I'm the only party, but I have several devices that need to sign...
independently in order to exercise a transaction.
Finally, I have my hot wallet, which is in my back pocket. At the moment, [a Mycelium mobile wallet].
I keep a couple hundred dollars [in there], mostly for the purpose of giving everybody a [fraction of] a bitcoin,
as if I'm the Oprah of cryptocurrencies.
'You get a bitcoin and you get a bitcoin!' [Laugther] Actually a millibit, because things are going well!
'A milibit for you and a milibit for you!'
So to answer your question: I have tiers.
I never keep on my hot wallet more than I'm comfortable keeping in cash, in my physical wallet, as fiat.
I often have to move things around in order to manage it. So far, I have only lost bitcoin through my own stupidity.
For example, misplacing a backup and then trashing my phone. I've lost small amounts, less than $100.
I've never been hacked. Fingers crossed. I don't assume I won't be hacked, I assume I might.
But as long as it's on the warm side of my wallets, I can take that risk.