The winter holiday season might have just rolled to a close, but Bitcoin supporters had another curious tradition to carry out. Tuesday they celebrated a unique, annual, grassroots holiday known as “Proof of Keys,” started in 2019 by Bitcoin entrepreneur Trace Meyer.
In an experience that roughly mirrors a bank run, the community uses this day to encourage fellow Bitcoiners to pull their Bitcoin off of exchanges and other third-party services so that they can gain full ownership of their assets. The date was specifically chosen since it’s the date of Bitcoin’s “genesis block,” the first Bitcoin block ever mined, back in 2009.
The philosophy of the day is simple: Many people leave their Bitcoin (and other cryptocurrencies) on exchanges. But by doing so, they’re not taking full control of their funds. Instead, they’re trusting the exchange.
“Not your keys, not your coins,” as the common refrain across the industry goes. (Or sometimes “not your keys, not your cheese.”)
As the recent FTX calamity showed, third parties can’t always be trusted. FTX lost billions of dollars of users’ cryptocurrency—and users of the exchange don’t know if they’ll ever get their money back.
“Everyone should take advantage of the most important Bitcoin property, the capacity of self-custody! [January] 3rd became a ‘Bitcoin holiday’ when we remember together this important effort,” said Coinkite CEO and co-founder Rodolfo Novak in an email to Decrypt.
He added that “self custody has become so easy, that no one has an excuse now,” pointing to hardware wallets (like his company’s COLDCARD), as a secure way to self-store funds without the need for an exchange or other third party.
To self-custody or not to self-custody
A “bank run” conjures up the thought of the Great Depression, where many worried people lined up at their bank to withdraw their funds, concerned that their bank wasn’t solvent.
Proof of Keys wasn’t nearly as dramatic. But it’s a similar idea. Browsing Twitter, a number of users…
