14 years ago today, Satoshi Nakamoto created the first block on the Bitcoin blockchain. Consciously or not, that movement starts all movement; one that continues to breathe and develop years later. The singularity of Nakamoto’s creation has been exhibited many times since the Genesis block was mined, and now, more than ever, its purpose is clearer and, fortunately or not, needed.
Engraved on the Genesis block is Bitcoin the purpose.
“Chancellor on brink of second bailout for banks.” A simple but powerful message. The engraving is an anchor to the physical world, a testament to Bitcoin’s birth date — or, at least, it couldn’t have been created before January 3, 2009, the date the cover was issued. But more importantly, and more philosophically, the message made the manifesto, right from the start. It makes it clear that the system burned by the bloc is against the central bank policy enabled by the culture of easy money. Bitcoin, instead, will seek to restore accountability and antifragility through a monetary system based on sound money; one that cannot be debased or controlled, manipulated or produced for the benefit of the lucky few. Bitcoin will strive to level the playing field, ensuring property rights for millions of people around the world, equally and regardless of status, race, religious beliefs, gender or nationality.
The fundamental nature of Bitcoin will allow these dreams to come true. Powered by a distributed network of nodes, each running protocol software and thus enforcing its rules, Bitcoin will allow individuals to take financial control — once and for all. As the days and years passed, however, more and more Bitcoin-related activities began drifting to centralized institutions, first for buying and selling, later for holding, and now for a plethora of services unimaginable in the days of Nakamoto. While the move has led to more participation by people around the world, the initial ideals of Bitcoin have begun to be ignored. After all, true peer-to-peer electronic cash cannot be actualized in a custodial model where the movement of funds is only updated in a centralized database. However, the reality is more like the old traditional financial system Nakamoto is trying to fight — one that makes people unable to be kings because they can’t be masters of finance.
While there are various requirements for Bitcoin holders to release the reality of the established system, this article focuses on the keystone aspect that shares the holiday with Bitcoin’s birthday. Proof of Keys Day, also celebrated on January 3, was started by the infamous Trace Mayer, who rallied people to withdraw bitcoin en masse from centralized exchanges and custodians. The reason? Only by canceling BTC can people ensure that emerging industrial companies do not engage in old and established evil practices like fractional reserve banking. Moreover, only with bitcoins in their possession –– held by the same wallet that controls the keys –– people are free to do what they want with BTC. There are many different ways to do self-sustain, and while it can be daunting at first, it is a necessary step to take the leap from the old to the new system.
The “keys” discussed here are private key for a given Bitcoin wallet. They can be considered the real keys of the wallet because they “open” the wallet and the bitcoins they hold for spending. Without a key, no bitcoins can be used. This is because when a Bitcoin transaction is formed, the sender “locks” the bitcoin with information about the receiver. Thanks to asymmetric cryptography, the dynamics of this transaction ensures that only the entity that receives the bitcoins can spend the next one. And this spending can be done with the recipient’s private key. So, as long as the receiver takes care of his private key, only he will be able to spend his bitcoins — no matter what any government, institution or agency thinks or does.
By holding bitcoins in the wallet you create, you ensure that only you can transfer the bitcoins held in that wallet. When a third-party custodian holds your bitcoins for you, they create a wallet for you and tell you your address so you can make deposits, but ultimately they control the private keys of the wallet and more often than not that information is inaccessible. So, permission is needed to be asked to transfer your bitcoins. While the inquiry is automated, it is still necessary for you to be able to transfer funds. Often, this takes the form of a “withdrawal request” you issue to the exchange. Proof of Keys Day aims to increase people’s awareness of this fact and persuade them to take control of their finances once and for all, making the leap from the traditional financial system to the new, decentralized, Bitcoin-based one. As they say, Not your keys, not your bitcoins!
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