There is a phrase used in the bitcoin world, “your keys, your bitcoin, not your keys, not your bitcoin”1. This term refers to the fact that bitcoin is a bearer asset, meaning like bearer bonds or gold and silver bullion, whoever holds the asset owns the assets.
Bitcoin are secured by private keys, all bitcoin exits nowhere and everywhere by virtue of existing on the timechain in bitcoin wallet addresses. A paradigm shift encountered by new bitcoiners is the notion that one needs to take responsibility of ownership. Because bitcoin exists everywhere and nowhere, it is really the keys to your bitcoin that are your representation of ownership.
Many new bitcoiners are used to having a custodian take care of their assets, whether that is the stocks owned in a portfolio the ownership of the virtual certificates falls to the investment dealer or broker that is custodian of the account. One doesn’t actually hold share certificates anymore. Similarly with deposits on account with the bank. A bank customer doesn’t actually have cash sitting in a bank vault, what he has is an IOU from the bank that upon request you could get access to you account balances in cash currency. Say for example that you have $100,000 on deposit with your bank, the chances of dropping into the bank branch and requesting your funds and walking out with that $100,000 in cash is practically zero. What you would actually need to do would be call the bank manager, request the cash at least a week in advance, explain what you will be using your cash for and completing some arduous and ridiculous anti-money laundering paperwork so you can access your cash. The irony is that money is meant to be anonymous, without KYC requirements, the current financial system has normalized the need to know every aspect of our financial transactions.
As an alternative, and again a paradigm shifting alternative, is to acquire bitcoin, withdraw that bitcoin immediately from the exchange where it was purchased to your own wallet, for which only you hold the keys and only you decide when, how much and at frequency and amount you wish to move your
bitcoin, no permission required, no advanced notice, immediate permissionless access to your money. Period.
Bitcoin is…PERMISSIONLESS.
1 – Andreas Antonopoulos
