Start Stacking
So you have read my blog and you decided that it's time to start stacking sats. In that case this guide should help you get started. I will cover two parts, buying your first bitcoin and how to take proper custody of your bitcoin. This is not going to be a tutorial but rather a brief overview of some of the options available.
Buying Bitcoin
There are several ways to buy Bitcoin. You can go Peer to Peer (P2P), use an exchange or use one of the Bitcoin-only Broker services. There are important differences with regards to privacy and convenience. Personally I recommend either P2P or using Bitcoin-only broker services. Which of the two is better for you depends mainly on your affinity to technical aspects and how high you value your privacy. A bit more information is needed about why I come to that conclusion.
A Peer to Peer purchase of Bitcoin means that you don't go to an exchange and buy from there but that you find a peer – somebody else in the world who wants to sell Bitcoin. Normally buying or selling happens on an exchange where many people come together and give their bids. When a bid matches the trade is facilitated. The good thing with this process is that there is a central exchange that takes all the orders and arranges them according to price. So discovery is simple and there is lots of liquidity which means you are more likely to get a good price. The major problem though is that the exchange has to collect a lot of personal data (Know-Your-Customer; KYC) before he can allow you to participate. This is the major drawback with a central entity. It has huge implications on your privacy if an entity has your financial records they can be leaked or handed over willingly. Many people don't want a central entity to have their information. That's why we have P2P transactions. There are platforms were a seller and a buyer are brought together without anybody – not even the platform – knowing the details of the transaction or the trade partners. The monetary transactions happen directly between the buyer and the seller and no middleman is involved. So for people who are focused on their privacy I would recommend that they buy via P2P platforms like Peach Bitcoin, RoboSats or Bisq (Haven't personally used Bisq but heard a lot of good things). These platforms often require a bit of prior knowledge hence I don't really recommend it to people who are not that technical and just want to buy Bitcoin to get started.
So why use a platform that does KYC and collects your information. Well it is often more convenient to use these platforms and most of these platforms allow you to do a form of automated Dollar-Cost-Averaging (DCA). DCA is if you continuously buy an asset for a fixed amount over a longer time frame. So you could decide that you want buy $100 worth of Bitcoin every month. So no matter where the price stands you will buy a $100 worth. So through the volatility of the asset you might sometimes get more and sometimes less. It's a good way to calm your nerves and to not regret buying high because you will most likely also buy low. In a direct comparison between an exchange and a bitcoin-only broker I would pick the Bitcoin-only broker. 100% of the exchanges also list a various number of shitcoins which are just distractions and newbies can easily get distracted in the mess of the crypto space so I just don't recommend platforms that list several coins. For a reference read Stay Humble and Stack Sats. For this reason I normally only recommend the Bitcoin-only brokers. Personally I use 21BitcoinApp which is based in Austria but serves people all around Europe. There are also PocketBitcoin and Relai, from what I've heard they are good services but I haven't tried them myself (For people outside of Europe I don't want to make a plain recommendation because I lack the info). All three brokers I mentioned are regulated either by the Austrian or Swiss regulators so they are also more secure than a random exchange in the Bahamas (cough FTX cough). With regards to the three mentioned services in Europe there is a small distinction between them. Whenever you buy Bitcoin from those brokers your money is sent directly to your personal wallet. In addition to that if you use 21BitcoinApp you can choose to keep your coins there. Now the attentive reader might recall my write up, Not Your Keys not Your Coins. Yes it is important to hold your own keys, no doubt. Yet, I would argue that in order to onboard somebody it does make sense to allow a brief window for a custodial setting, there is also no problem with an uncle Jim model but that's something else altogether. Moreover keeping your coins custodial and then withdrawing bigger amounts makes a lot of economic sense. UTXO management is something that I haven't talked about yet but it can make a big difference in the amount of fees that you'll have to pay down the road. So it's important to keep self custody in mind but I believe it's not a sin to keep an insignificant (significance always depends on the person) amount in custody especially in an high fee environment.
To summarise, if you want to buy bitcoin without anybody being to nosey in your business I recommend P2P platforms like Peach or Robosats. For the custodial experience I would recommend 21BitcoinApp. In order to reduce your fees on 21BitcoinApp you can use my sharing code 8B478. This would help me out maintaining this blog. You'll find my invite link below as well.
Taking Custody of your Bitcoin
You bought your first bitcoin, possibly on 21BitcoinApp, and now you are asking yourself how to do self custody. Taking self custody might be easier than you think but you have to be aware of the responsibility you now have. Nobody will be able to get your bitcoin back if you loose access. On the flip side it also means that nobody can take your Bitcoin from you unless you give them away. That's something that comes with the territory. First of all, I would recommend using open source software. Open source software has the benefit that you could technically verify what's happening in the code. You may not be a technical person but others are. You are using the benefits of the crowd to your advantage. Many people have their eyes on Bitcoin projects and if something is fishy they will speak up. For a mobile wallet I would recommend BlueWallet. It's a well known wallet in the community and supports most of the important features a wallet should have. But I would only recommend a wallet on your phone for low amounts. There is a big security risk when holding your bitcoin on a mobile wallet. Your private key is "just" secured on your phone and a phone is not really a very secure storage device. A mobile wallet should only contain amounts you're also comfortable carrying in your physical wallet while out and about. For your main stack I urgently recommend using a cold storage device. My goto device for that purpose is the BitBox02 Bitcoin-only version. It has a secure element and is open source. There are others out there but I don't feel comfortable recommending something that I haven't used myself. But let's back up. What's a cold storage device? In Bitcoin we distinguish between a hot wallet and a cold wallet. A hot wallet is when your keys are stored on a device that is directly connected to the internet. A cold wallet is a wallet that is not directly connected to the internet. But in order to broadcast a transaction to the network the cold wallet has to reach the internet somehow. We achieve this by connecting our device to a computer which then broadcasts the transaction for the cold storage device. The cold storage device has to ensure that its key is not leaked to the internet via the computer somehow. So basically any cold storage device worth its salt has a secure element where the private key is stored. The private key will never exit the cold storage device and is hence way more difficult to obtain by an attacker. So for a bigger bitcoin stack it is recommended to use a proper cold storage device. Also because cold storage devices are supposed to be simple we don't have a lot of ways to interact with them. So they we still need additional software on our computer in order to interact with our cold storage device. The BitBox has its own companion app which is very friendly for beginners and does the most important things like sending and receiving. Personally I use Sparrow Wallet to interact with my BitBox but it needs a bit of experience to operate in my opinion.
Something that I haven't mentioned yet but what is always necessary is to make a proper back up of your seed phrase. A seed phrase is what you get whenever you create a new wallet. From that seed phrase your wallet keys are derived which control your bitcoin. With your Seed phrase you can always get your Bitcoin back for that wallet so keep it safe. More importantly you should know that anybody with access to this seed phrase can "restore" your wallet and spend the bitcoin. Let me repeat this because it is very very important. Anybody who gains access to this seed phrase can spend your bitcoin so it is very important that you keep it in a secure location. Some people put the words in a safe, a safety deposit box at the bank or stamp them into metal and hide them. There are several options and you have to find a way that lets you sleep at night. Not having you seed phrase where you have your device and introducing a geographical distance might be a good idea as well. I won't get into more depth here but there is also a multi signature setup for very large amounts but this is most likely only for more advanced people and is not fitting for this write up.
As a summary use open source software. Use mobile wallets like BlueWallet for amounts you would carry in your wallet. Your main stack should be in cold storage on a secure device like the BitBox Bitcoin-only edition. Make a backup and hide it at a different location than your main devices.
On a more personal note. I know that at the beginning it may seem scary to some to have full responsibility of their own money. Most people just have their money in the bank and the government guarantees that their money will still be there even when the bank goes bankrupt. This is taking the easy way out and you will most likely be punished for it in the future. In Bitcoin nobody guarantees anything and if you do a sloppy job you will loose your coins. Keeping that in mind, those that follow this blog might have an understanding that our fiat world is not as stable as we like to believe. In my opinion, taking responsibility for your own future and gaining financial sovereignty will be the best thing you can do to brace for the coming storm. Because if you take your responsibility serious you will be a step closer to becoming a sovereign individual. So now, equipped with this knowledge, you can stay humble and stack sats properly.
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