 Hi everybody and welcome back to Bitcoin for everybody PRD. This is a recap of PRDV 151 for sailor.org's Course I'll put the link in the description below remember. This is a recap There's been recaps for the four other units of the course and we invite you to take the course We invite you to join the discourse discussion forums I'll make sure that I add all of those to the chat and also to the comments down below So without further ado, I'll hand it over to Stefan to introduce our guests and get this going Excellent. Well, thanks very much Mike. So, yeah, my guests today Well, we have Michael sailor the creator and founder of sailor academy himself And also obviously a very well known bitcoin advocate as I'm sure many of you already know And maddo del friend of mine in the space Another bitcoin podcaster. He's the co-host of rabbit hole recap and also the host of citadel dispatch And he's very well known as a bitcoin and privacy advocate and also, you know a friend of mine so very Pleased to be joined by my friends today And so today we're going to talk a little bit about some of the Basics around how to get involved and how to get started with bitcoin So we're going to talk a little bit about bitcoin in practice So I thought it might be good to start with Michael if you could give some of your tips on How to get started with purchasing some so let's say I've learned a little bit about bitcoin And now I'm thinking okay. I want to I want to buy some how do I how do I go back? Or how do I go about getting some bitcoin? Well, I mean, I think you got a lot of choices. I would probably err on the side of Picking the most convenient bitcoin Application or exchange you can find in your jurisdiction. It depends on what country you're in And if you buy if you buy one on an exchange make sure you can take the bitcoin off the exchange to your private wallet So you I mean you could buy it through fidelity and take it off the exchange or you could take it off the exchange or coin base And I kind of like square because you can buy it and also take it off the exchange. There are some bitcoin Purchase routes that I won't name Where you could buy the bitcoin, but you can't take custody of the bitcoin So you're really just buying a bitcoin derivative and you would be trapped with that custodian I think that my first advice generally is is Get yourself some bitcoin That's my first advice and my second advice is When you get the bitcoin make sure you get it from a place that will like let you switch custodians or take personal custody of it And then after you do a little bit then start to get educated and then you'll form opinions about Where you want to hold at long term and how you want to hold at long term And you'll have all your options available to you Excellent Matt. Do you have anything to add there in terms of how to acquire bitcoin? I mean, I think Michael really nailed it on the head there the the number one thing is Is is don't be afraid of it. You know, I think people tend to get overwhelmed very easily and A very good way to start is to just get a little bit of bitcoin Take custody of it yourself And play around with it get comfortable with it send it around, you know, send it back to yourself Maybe if you have a friend you can send it between Uh, and just get used to like the whole backup process that that whole the whole concepts around bitcoin Um on the surface seem very very overwhelming to people But once you start to get used to it and get comfortable with it, it's a lot more approachable Yeah, and so there's different ways to get involved another way is actually to earn bitcoin So do either of you guys have comments on how to go about doing that? I'll let Matt go I mean, I think this question is probably a little bit premature. Uh, I think uh For most people right now, it's you know, you kind of have to seek it out Uh, if you want to earn bitcoin you have to uh Maybe, you know, you find a job that that your boss loves bitcoin, right? And you ask them to pay you in it, but I think going forward When you start to look at like a five-year ten-year timeline, uh, the majority of people who The way they get bitcoin is going to be because they work And they get paid in money and that money is going to be bitcoin Yeah, that's a good way to put it and I think for many people The easy simple way is to simply buy bitcoin But there may be people who are able to charge for their services and It might be denominated in fiat. It might be like, oh, pay me a thousand dollars But pay me in a thousand us dollars to this bitcoin address and we'll get into some of that aspect of it as well And I think probably the other way is potentially mining bitcoin now. This can be A bit of a tricky rabbit hole for people and maybe it might not be the best option for people when they're just getting started But how would you Put that for people when then you should they you know, because people might have heard Oh, I should mine bitcoin. Should should they be should the average person be doing that or what are you? How do you guys think about that? I think that um The average person ought to ought to come up with a bitcoin Application or bitcoin acquisition Uh service provider that they're comfortable with And then they ought to think bitcoin is like a long-term savings account And when they get a bonus or they get some money that they can afford to put away and save For the long period they should convert it to bitcoin Just dollar cost averaging and not really getting stressed out over Timing the market if someone pays you in dollars and you don't need the money now you convert to bitcoin I think that's a good idea I think that bitcoin mining is a different business if you're a bitcoin miner or ready to be a bitcoin miner You know it but probably the the normal person isn't I think in terms of getting paid in bitcoin If you have a you know, you could ask someone to pay you in bitcoin It would be the tax efficient way for them to do it would be if you told me to pay you in bitcoin I would go on square or go on some app. I would buy the bitcoin today and then I would transfer it to you today Before the price changes, so I don't have to file it with my accountant and attribute a loss or a gain to it So generally if you're getting paid in bitcoin someone's going to be buying it and transferring to you But if you got to keep in mind that if they could do that You also have the power just to take delivery and take the pay in dollars or any currency And then you just convert the bitcoin upon receipt Probably the big takeaway here is You know bitcoin's an asset and it's treated as property for tax treatment It's not treated as currency and what that means is you generally want to buy it and hold it for long periods of time Because every time you transfer it Or you sell it you incur a capital gains tax or some kind of tax and that's very inefficient It's just a bad idea. So so the longer you can hold it the better And Anyway, you know probably the single most important thing to do is convert as much of your discretionary income as you can afford to save And the bitcoin as soon as you can Because it is an appreciating asset over long periods of time But but don't do so much that just stresses you out and can't sleep at night Yeah, I love that. That's really great. Those are some really great tips for people who are new to bitcoin And it might also be useful as well. If you guys have any tips on how to select a reputable exchange or business or broker service to To do this to purchase bitcoin with do you have any tips on that? Matt Um, I mean before we get there. I just wanted to add that I mean michael made a very good point, right? If you're going to get paid in bitcoin is probably because your boss already has a surplus of bitcoin And he wants to pay you in bitcoin Otherwise, you're just you're just creating more headache for that person and you're better off just accepting your fiat payment And then just dollar cost averaging into bitcoin yourself On the mining side It should be for some reason beginners all want to mine bitcoin Like the first thing they want to do is mine bitcoin and really it should be thought of as more of an advanced type of acquisition strategy um It is completely dominated by professionals But there is some argument to be made that if you're a hobbyist and you want to mine You do so because it's the most private way of acquiring bitcoin you plug it in you you plug this device Into into the internet you plug it into power and it's just producing a constant flow of bitcoin for you Without you having to like go to a centralized third party Which we're about to discuss to go and buy your bitcoin and and when you have to go to those centralized third parties You have to you know, give them all your identification information all this other stuff that that we've gotten used to doing with the regular Banking system same thing applies here So when it comes time to like actually finding a reputable exchange Or service to actually buy your bitcoin That isn't that easy of a question I mean Stefan, you know as well as anyone else That there's been a ton of pitfalls and and issues with service providers in the space Usually in the beginning what you know, I think a very common sense move is to go to the more reputable larger ones At least to get your feet wet in the beginning Because a general rule of thumb is the larger the services the the longer they've been going on the the better reputation they have The less likely it is that they're going to either lose your money Or lose your personal information Which are like the two most valuable things that you're trusting that that company with because I mean Most of these services if you use a service like cash app or if you use a service like river in the united states um The you you you're you're doing a bank transfer So you're trusting them with your your private bank account information You're trusting them with all this identification information. So you it's it's very important that you pick a reputable one excellent and Also, let's talk a little bit about bitcoin Wallets and ways of storing our bitcoin So, uh, maybe if michael you want to just chat a little bit about how you think about that and how how should the new Bitcoin per new bit coiner think about you know learning to do that process of storing their bitcoins And if there are any particular wallets or any particular I guess these this moves and changes over time, but at least as that you know current day What's the current situation there? I mean similarly there's a lot of choices right ranging from mobile payment applications that are that have open wallets to to wallets That come with the exchanges that may be multi-factor. I mean that could require ub keys to You know to hardware wallets that are more secure and then there's downloadable mobile wallets That some support lightning and some don't and there's like a host of them Like blue and moon and and the like and they all have various Pros and cons to them. I don't think I could give a single recommendation to anybody. I think that As people get more security conscious they they tend to move toward hardware wallets with multi-signature multi-factor authentication But all depends upon how much bitcoin you've got and also where you are and also Are you a business or are you an individual? And and maybe you have some other personal issues. What's your transaction frequency gonna be? Matt might yeah, those are all important considerations So I don't know Michael. We've only got you for a short period of time So maybe one more question just for you for new bitcoiners. How should they think about their, you know, accumulation? And why is it important that they are, you know, setting up that regular accumulation strategy? Why is that an important thing for them when they're just getting started and learning about bitcoin? Well, I think in our current monetary environment You could reasonably expect that the economic energy and any currency in the world is going to lose one percent of its value every month And in a weaker and a weaker currency, you would lose two percent of your value a month And so if you're saving your money in a currency Then the clock is ticking and you're losing your savings if you're saving your money in bonds It's no better. You're still kind of losing your savings about the same rate If you're saving your money in a stock or a stock index Generally at least half of the value of the stock if not more is is based upon the cash flows Which means that's a lot of value stocks will just look like bonds. They look like currency derivatives So a large number of things that you could hold with your life savings are exposed to currency debasement And so it's important That in a weakening currency You in a disciplined fashion be converting your economic wealth over into an inflationary asset That's not going to be debased. They won't be inflated away and the presumably will appreciate and value faster than the rate of the currency expansion so So bitcoin is kind of that engineered savings account and cyberspace If you hold 90 percent of your money In the other savings account and the currency loses lots of its value, then your life savings is just leaking away So I think discipline with regard to where you store your wealth is kind of critical and You might think you have a bit of time but But the problem is that you know the weeks fly by in the months go by and At a at a 15 percent and monetary inflation rate That means that You're going to lose half of your money within about four years and so It goes fast. So that's I think the good discipline there is helpful just Be protecting yourself financially Yeah, and I think that's the important part. It's the why it's like Yeah, you have to pull all the pieces together and pull it together into a thesis and think, okay This is the situation we're in. This is the reaction I need to save my wealth into something that is going to actually preserve it for the long term So matt, do you have anything to add on that point? No, I mean michael just nailed it there. So Yeah, I agree I guess what we can say is that If you're in the u.s. In europe and you're in a strong currency that's that's kind of pegged to the dollar We kind of think that that's weakening 15 percent a year Maybe more but like 15 percent a year a little bit more than 1 percent a month But if you're in a currency that's weaker that is weakening against the dollar Certain currencies, you know in the you know the second tier they're weakening 20 faster and the third tier currencies are weakening two to three times faster If you think that that the currency that you're working in is weakening even weakening against the dollar You can see this in turkey. You can see this in lebanon You can see this in certain other countries, you know, nigeria. You should scramble harder Right, you would probably you don't really necessarily the risk of of not doing anything Is higher than the risk of doing something And so there becomes a point where where I would say people ought to move fairly aggressively to at least get their money out of the weak currency You got to judge how much you trust that currency In your given country wherever you might be Yeah, so it's for everyone to Make their own assessment how you know how urgently do they need to be running to bitcoin? But I think for many of us in the bitcoin world We have been Quite public about our advocacy of this as this is a way to save yourself So think about it. You have to think about it from that point of view But as michael points out in the western world It might be Let's call it less urgent than if you are in the developing world So that's kind of just a few points around that. Okay. Stefan. Thanks for having me matt Mike, thank you. Thanks for joining us. I leave everybody on the cast and good hands Take care and all the best So matt let's um go back to you. I think an interesting point for people to think about also is the way They acquire bitcoin they might want to think about using about doing that in a more private way So why is that important? Why should they think about that? aspect of bitcoin I mean michael just uh His last comment made me think of something just to go back In terms of earning bitcoin today, right if you're in one of those um Economies that's that's doing worse that has a worse currency and and your job is a digital job where you have like maybe you have Clients that are located in the western world the client that's located in the united states, for instance It might be easier in that situation for you to actually get paid in bitcoin and have them convert on their side Even if they don't have bitcoin, right? So I think that's like a that that's something that we forget about A lot But but if you're if you're purely a digital contractor And not only are you dealing with These this poor currency at home you also have to deal with like all the foreign transaction fees and whatnot in terms of them transferring it to you So in that case the argument to be Paid directly in bitcoin today becomes way stronger and I could even see um And a way to encourage that basically let's say you're just a contractor, you know Your client doesn't want to pay you in bitcoin, but you tell them, you know I'll give you a 15 discount if if you go and convert it to bitcoin before you pay me Right, and it might seem like that's a big discount But the reality is For you you might be saving a lot of value in that and I know even in this case where If you are in a more developing world market There may be times where there is a premium In the local peer-to-peer bitcoin market there. So as an example Let's say maddo dell is a contractor in you know, one of these countries and he asked me for payment And I pay him in bitcoin and then he can turn around and if he needs fiat to buy You know living expenses and food and so on he can then turn around and sell some of that some of that bitcoin on the peer-to-peer markets in His local country where there may be who knows five percent? Maybe even ten percent or maybe even more of a premium So he's actually getting like sort of getting a premium back when he sells on those local exchanges That's very much a possibility. So that's another aspect Um and then yeah, so for those people who are interested to acquire bitcoin privately Why should they think about that and what are some of the ways to start going about that aspect for people interested in that? um, I mean At the end of the day it comes down to the fact that bitcoin A lot of us I think tend to agree that bitcoin is is In insurance it's it's like almost an insurance policy against poor governance You know, our governments are in charge of our money historically And if you don't trust your government with that responsibility Then it's extra important that you have a independent money That is out of their control that they can't corrupt Now there's two issues with that You know, especially if you have a particularly bad government Is they could if you don't take custody of your bitcoin yourself and you leave it with one of these centralized services The government your government can go to that centralized service and they can seize your bitcoin Um, they could freeze your bitcoin. They could say you're not allowed to withdraw it at that point Um, so that's why it's extra important to actually take custody of it yourself. Um, the second thing is Do you have transaction records with that entity? Um We could see situations. I would not be surprised if we see situations around the world Where you have authoritarian governments come in seize those records And then start targeting large holders of bitcoin They'll know you have bitcoin and they'll come looking for you now. That's obviously way more difficult They have to go, you know door to door person to person Rather than going directly to an entity, but it's it's still should be a concern third You can have you know in the in the our world is ever more digital every every day And we see larger and larger Database hacks and leaks Right where where these these large databases are compromised and they're sold on on the dark web Um, and they're they're shared and they're they're they're combined with other leaks Right, so if you have a leak from one spot and you have a leak from another spot They can be combined to have even more information on you and in that situation Especially in crime-ridden parts of the world You can have you know organized crime malicious individuals can get access to that And they can use that data to target large holders once again, right? And what a what does a large holder? It depends where you live, right in some places in the world you know People might might think it's a small amount in in america or in australia, but in that part of the world They'll they'll come after you for it. So how do you protect yourself? You protect yourself by using bitcoin more privately acquiring it more privately and actually using it more privately And that's easier said than done. I don't know if that's You know for a beginner course I think I think what people should know is That when you use bitcoin with these centralized entities and when you use bitcoin At a basic level you are leaking transaction information You're leaking private information and you need to educate yourself So I don't want people to be overwhelmed in the beginning I think you know you use one of these reputable services. You you withdraw to a mobile wallet Michael mentioned a couple. I moon wallet. I really like now m u u n wallet You play around with it. You get used to it and then start going down that rabbit hole start educating yourself on how to use it More privately how to acquire it more privately Yeah, that's a great way to balance that so moon wallet for people who are new the website for that m u u n dot com and that is an apple or android app So you can it's just an easy phone wallet now the thing is in this space things move quickly So often recommendations will change, but I think where we stand right now I think moon is a good first choice. Another one is phoenix wallet and another one is breeze b r e z breeze So those are some great easy solutions for those of you who are looking to get started with self custody and now one way to I guess there's a few different nuances here. So depending on what you are planning to use bitcoin for that will Sort of push you down different pathways in terms of what you Are gonna which wallet you are going to use, but I guess high level there's a progression step here So I would generally say first step is hard is a sorry a phone wallet like moon wallet Then probably the next level when you're ready is a hardware wallet And then think of it like this is like a more advanced level is probably multi signature But even inside the multi signature, there's different options there You can go for like a guided provider like a kasa or an unchanged capital where they help you Or you can do is as your own setup But I think that's just high level. So if you're new and you're trying to think about how do I You know think about how do I sort of go through a progression steps start with a phone wallet and then think about a hardware wallet Matt, do you have any tips to add on on that aspect the progression? Yeah, I think I that progression you pretty much nailed it I uh A hardware wallet is like a is a is a specific device. You could think of it like almost like a usb stick That is designed to hold your bitcoin. Yeah, there you go Here's one just as an example for anyone. This is called a cold card So this is a very well known hardware wallet amongst bitcoin people matt go on Yeah, so the cold card is Is arguably considered the the best the best hardware wallet in space I think me and stefan both agree that we like it the most um, there's really like don't go down like the There's only like a couple reputable ones like you don't want to use some completely unknown hardware wallet Uh, don't get like cheeky with it. It's like cold card ledger and treasure Are like basically like if you're coming in that that's what you want to do And the only reason I would say not to use the cold card as your first one is because um You want to you want to use altcoins and the other two support altcoins? But I mean, I think me and stefan think that you should just focus on bitcoin So that's not really a good argument in my opinion. The second thing is I just I don't want people I don't think you should get overwhelmed the most important part Is that is is to get comfortable you have to get comfortable with these things you can't you can't just it's Bitcoin is about personal responsibility It's it's it's money for people who want to take personal responsibility of their finances So personal responsibility will always be the more difficult option. There's no such thing as set and forget You have to you have to use these things you have to get comfortable with these things and you Literally never going to stop learning. You have to just constantly improve um in the space evolves all the time and the attackers evolve all the time And you just you just need to keep on You know, you got to you got to keep putting effort in and and improving your setup Yep, yeah, that's right And so the way to think about it is you just need to progress and I understand for people who are new You might be thinking well like there's a lot I need to learn But unfortunately, that's the that's the reality of bitcoin as it is today. You can think of it like It's very it's very highly rewarding though to learn about bitcoin And so that's what I've found from many of my friends and people who I've been teaching about bitcoin They found yeah, there's a lot to learn but hey, it was worth it So just think of it like that that I understand it can be Confronting at the start when you are new and there's all these words and technical terms and things but I think it's just The the suggestion I would have for you is to keep it basic and just take one step at a time So don't don't think of it like you have to go zero to hero straight away That's not what any of us are expecting the point is just to get started Even if it's imperfectly just get started and then learn from that I mean not only are we not expecting you to go zero to hero like you're not going to be able to And and one of the things about bitcoin is is there's there's no one-size-fits-all approach because it is an open system It's an open network. There's a lot of different ways you can use it with a lot of different tools That's what makes it You know so powerful and so robust But it's also what makes it a little bit harder to come in in the beginning and it is what it is That's just that's the reality of the situation. Yeah, okay so let's talk a little bit about the practicalities of setting up a bitcoin wallet and then withdrawing from the exchange right so Different wallets will have different setup processes. Some of them will involve you writing down a backup now In the case of moon wallet, it's a little bit of a different backup process But essentially you go through the backup and if you write that down and you keep that safe Um in other cases like a hardware wallet You will have typically a either a 12 or 24 word seed and that is very important So when you back that up you need to you need to write that down in a place that's quiet and ideally there's no, you know Microphones and other things around and it's not like you're in a cafe You do it at home in a quiet, you know room and you write down those 12 or 24 words And those that is known colloquially as your seed words or it's also called your recovery phrase And so anyone who gets that can steal your bitcoin Okay, and I know that's a little bit confronting But there are you know security techniques that we can apply on top of that But when you're getting started, uh, that's an important thing Don't and hit some tips. Don't take a photo of it. Don't tell anyone your seed words You know, you write them down and then ideally you can back them up onto a onto a metal Backup seed But think of it like this 12 or 24 words if you were to lose your hardware wallet You could recover with those 12 or 24 words and here's the interesting thing for new people That 12 or 24 words is not just your backup now It's your backup for all future transactions on that wallet and I understand that's a little bit trippy That's a little bit kind of crazy to think about but that's really the truth of it um so Yeah, so essentially when you create your wallet you can then withdraw from the exchange now matt Can you give any give us any tips? What does that look like and how should we think about that? um, I just to Just just to extend what you just said, uh You know with bitcoin there's no centralized company that runs bitcoin. It's a It's an you know, it's an open network Uh, that that is not controlled by any individual or corporation So There's no forgot password button you have to You you have to You know Take care of your own backup yourself and you have to store it securely offline and if anyone has access to that backup They're going to be able to spend your funds and as long as you have that backup You're going to always be able to recover your funds no matter what happens with your the specific wallet you showed you use So like for instance, we you know Stefan showed earlier the cold card wallet this hardware wallet Which really cool is you have that backup offline um, in this case It's you know a word phrase and you you either write that that down on a piece of paper you put it in steel But you keep it offline you never put it on on a computer The cool part is if cold card goes out of business You can still recover it you can recover it with another with another application another wallet And that's the beauty of this open standard right because You don't have to rely on an individual company To basically give you access to your funds But that comes with the negative that there is no forgot password button There's no customer support you can call to restore your funds And that just goes what it goes back to what we said earlier where you know, this is about personal responsibility And it'll always be the more difficult option um to To answer your question, which was what do we do about actually pulling it off of exchange? um An exchange is going to give you basically a field and you're going to put in your bitcoin address Which your wallet is going to provide you that bitcoin address looks like a bunch of random letters and numbers Uh, it usually will now start with bc bc one is what the address should look like If it's a new address type or it'll start with a one or a three and it just looks like a random Letters and numbers and you basically want to confirm on your wallet that it's the same exact It's that you want to make sure it's the same address you put in and it'll show up on On your side once you click Withdraw and just do that with like a small amount And get used to it see it there then transfer it around Maybe delete your wallet then restore it with your backup do all these things With a small amount so you can get comfortable with it Yeah, excellent. And so what we can do then is people can You know practice withdrawing with a small amount from their exchange Into their wallet now as we mentioned you can do that with moon wallet So let's say you're just getting started and you just have a phone wallet Well, you can copy paste that bitcoin receipt. So in your wallet you on your phone you'll go to receive It will generate a bitcoin address and then when you copy paste that into your exchange or broker or service And they will pay you out to that address So think of it like this is an address that you control if any bitcoins hit that address They're now yours if you will that's one way to think about it. And now if you are I guess some of the different questions. Oh, we've got a question here. Are bitcoin addresses case sensitive? So no, um, they So I think in the bc one so in the native seguit or the best 32 encoded addresses They are either all lowercase or all uppercase and they don't do mixed case in the bc one address type case So generally speaking, you don't have to worry about that part now for some of you if you are operating in a world where Let's say we're doing smaller transactions You might be doing what's called lightning transactions Now some exchanges are starting to support this and they're starting to support the way of doing withdrawal using lightning So a couple examples here. I know, um, bitter ru here in australia support lightning I know kraken are supporting. I know ok coin are supporting lightning And so for those of you and bitfinex is also famously another one who supports lightning So if you are on a wallet and you need to withdraw in the lightning Then you actually it's a slightly different process You would go to receive and then go to lightning and then you would have what's called a lightning invoice So it might say something like ln bc and then a whole bunch of numbers and characters And so basically same same idea you would then copy paste that lightning invoice into your exchanges withdraw Field and then withdraw into lightning. So that's a few tips around that And uh, how should we think about uh, this question? I guess depending on the different levels because if somebody is coming in and they're only buying a hundred dollars Maybe that's that should be done with lightning. Where is it? They're buying a thousand dollars? Then they're probably going to be withdrawing that on chain, right? Well, depending when they're watching this video, uh, they might be withdrawing to lightning with a higher amount So there's a question in the chat. Why are bc one address is preferred? And I think it goes hand in hand with this question bc one addresses are and and just to extend what Stefan was saying like As far as case sensitive goes you just copy and paste the address, you know, you're not typing these things in manually Okay, and and if If the the caps are not caps isn't going to change anything for you. Don't get overwhelmed by that aspect of it um So there's three address types on bitcoin and then there's lightning The three address types are start with one then three and then bc one these all came In chronological order the bc ones are the newest ones you pay the least fees with them Then with the three addresses you pay the next least and then With the one address is you're going to pay the most in fees So you want to use the bc ones because you're going to pay less in fees now lightning you'll pay even less in fees With lightning though, there's a there's a there's a second piece of nuance there that makes it different from the regular addresses those regular addresses Once you generate an address you for privacy reasons you shouldn't reuse it But you can reuse it. This is something Stefan said earlier Like if all your old addresses will always be good So if you give a friend or a client or something an address and then your wallet keeps generating new addresses You don't have to worry if they accidentally send to the old address. You still get those funds With lightning you have to copy and paste this invoice Which is even a longer string of letters and numbers in the address Every time you have to copy a new one into who's ever paying you Whether that's you're sending it to them via whatsapp or or signal or if you're just putting it in an exchange You're going to have to give it to them every time But the benefit there is you're going to end up paying significantly less fees, especially for smaller amounts on on chain So on chain the the regular bitcoin addresses one three bc one The way you pay transaction fees are actually the amount of data that's being sent not the amount of money you sent So if you send a payment, that's ten dollars or a payment. That's a million dollars. You're going to pay the same Absolute fee. So what that means is your fee as a percentage for that ten dollar payment is going to be significantly higher than if you send a million dollars But on lightning the fee scales with the payment amount, which is very which is way easier to conceptualize That's like how our modern finance system works, right? So if you send a payment, that's ten dollars or if you send a payment That's a million dollars. It's going to be one percent of both Right. So there's a there's a threshold there where the larger amount you send you'll end up paying less if you use a regular address Versus lightning, but for smaller amounts, you're going to pay significantly less if you use lightning Yeah, yeah, so I can understand if you're new there's a lot of different Kind of rabbit holes and things to understand But sometimes you just have to practice it and that's how you you get used to these things in practice But high level what I would say for you guys out there If you're doing small value commerce, you need to be using lightning because otherwise you're going to get eaten alive in fees All right bitcoin on-chain transaction fees can Can be high and they are rising so they You know, I guess earlier this year normal chain transaction fees might have been five dollars per transaction And currently we've got a bit of a a fee spike happening So there might be 20 or 30 dollars and so if you are operating in a situation where maybe your income is not that high You need to be using lightning and so in certain cases if you're if we're talking about really low values where you Where you cannot even afford the chain Fee of a bitcoin transaction to open your lightning transaction You may actually have to use a custodial lightning wallet for when you're getting started And so an example here might be like blue wallet Like if you're in a situation where you only earn 200 or 300 dollars and you can't afford to pay that you know on-chain fee Um, but I guess there's a few different kind of nuances there But just remember that we we always have this ethos in the bitcoin world of not your keys not your coins So when as soon as you're able to learn and you're practically able to use, you know, self sovereign Self-custodied bitcoin wallets. We encourage you to do that But just to recognize some of you out there might not be in a situation where you can afford that so And also We've got a question in the chat here. What are the best locations for backup words hidden or safe deposit box? So matt, do you have any tips for listeners out there? I do but before I do Yeah, uh, the one of the reasons why we mentioned moon wallet earlier m u u n wallet That's on on the phone is because it supports both the regular addresses And it supports lightning and it does so in a non-custodial way So you can experiment with both right there in the wallet on your mobile phone And then the other two we mentioned breeze and phoenix are lightning only In a non-custodial way. So so we're already we're seeing this move where the majority of transactions are going to be Happening on lightning and the easiest way for a user to interact with that is going to be through mobile wallets And that's why those are the ones that I recommend that you start off with to begin with Now, where do we where do we keep our secret? Where do we keep those secret words or backup words? Someone in the chat mentioned multiple places Multiple places is a is just a great simple rule of a rule of thumb And the reason is is because the majority of times people lose bitcoin It's because they messed it up themselves They lose their own backup and bitcoin for the first time ever provides us the ability to keep copies in different places Like you can't keep copies of your gold in different places But you can keep copies of your bitcoin keys in different places, you know, maybe you keep it in your office Maybe you keep it in your house and the house burns down you still have the copy in the office So it's nice to have redundancy The negative there is if you have redundancy You also from an attack point of view Someone might is more likely to find it if you keep six or seven copies of it And you know then it's six or seven more times that they can find it and if they find it then they can spend your bitcoin So strictly speaking, I don't like safe deposit boxes safe deposit boxes are located in banks They have long histories of Of being opened without permission Uh, contents get lost sometimes you have to go through like a bunch of different cameras and stuff just to access your own bitcoin It's kind of old world thinking and I think it's more harm than good The cool thing about Bitcoin backups in this in this method is their words. It's just a word phrase So there's a lot of ways you can be creative about where you keep it, you know, like you there there's there and Steel we talked about steel steel is fantastic because it's naturally fire and water resistant So these are things you want to think about But you know, don't tell people where you keep it There's no one size fits all approach, but I would strictly I don't like safe deposit boxes I think they're over-recommended and people should be cautious about them Yeah, I guess that's a it's a very contextual thing because it might be it might be The case that it works in a multi-signature context where you're keeping one key out of your quorum in a safety deposit box But that's a multi-signature is a bit more advanced. So I think we'll probably consider that out of scope for this beginner session But that is something that you guys out there. You can think about when you're in a multi-signature context but essentially Think about your backups and you want to test your backups as well to make sure that they actually really do work and so It's a challenging thing in the bitcoin world because there's always competing priorities as an example We also have to always think about inheritance, right? We will not live forever So we are going to have to pass our bitcoins on to our children Someday or to our ears whoever we want to pass it on to so we have to think about how are they going to be able to access the bitcoins so think about That aspect of it also that you know, maybe you keep as an example you might You know have your cold card with your 24 words and you might Put that into a steel backup product that backs up those 24 words in steel So that way it's fireproof and you might think of it if you have you know Somewhere secret that you can put that but then you might also have to make sure your family knows where to find that If something happens to you, they would know where to get it. That's probably one way to think about it Yeah, I think that's a very good point about inheritance You know, especially when you hear michael sailor talking you're talking about generational Generational money, right? You're talking about money. That's going to be around for a long time And you want to be able to pass that on and this is a world of personal responsibility So you can't just count on like You know, you're you're you're a lawyer or someone to pass it along in a will You're going to have to actually figure out a process that's safe for yourself And and one intricacy to think about with bitcoin is because this is all that's needed to spend You end up in a situation where you might be trusting your air with Information that they could either they could either take the money from you Or they become vulnerable. So if if I mean a simple thing to think is like oh like you tell your mother about it and like she puts it on a post it And like sticks it on her computer screen. She doesn't even mean to Right, but like a maid comes in or something and and sees and sees the backup because she didn't take care of it carefully enough, right? um So these these little nuances including where do you store it? Are I simply put, you know pretty much solved with multi-sig and this is why A lot of us say the end of the road ends up at multi-sig because you can devise situations Multi-sig is this idea where instead of having one secret you have a threshold of secrets Let's say you have five secrets and you need three of the five to spend So you can put them in different locations You can have it so a family member can access two of them But you have a lawyer that can only access one and like if if something happens to you They have to come together to spend the money. They can't individually spend the money The lawyer can't take your money The the heirs can't take your money, but this is more advanced stuff. So I think the key is You just want to you want to start small you want to get comfortable And then slowly start working through these scenarios as you have more and more money in bitcoin And level yourself up, but the the number one mistake people make is they rush into advanced setups too quickly And lose their own money. They shoot themselves in the foot. So I don't I don't want people to You know get too aggressive with it early on you got to just keep using it and keep learning Yeah, and that's a great point. I think it's a common A common thing is that a lot of people shoot themselves in the foot because they're using a setup That's too complex or it's not, you know an open source well tested by the community a well known setup and then Then if their heirs have trouble recovering those coins and they're in real trouble because now, you know, it's it's you know Or they've lost the coins because they've lost a way to access the private keys that are to be able to spend those coins So let's talk a little bit about Scams and pitfalls in the space. There are many of them And so I think it's just good for newcomers to get some idea And of course the scams are constantly evolving, right? So we could tell you some stuff that's a clip applicable now in april 2021 And in you know, just a few months time the scams will evolve and they'll be different But let's let's just try and give you guys a few basics to Sort of know. Oh, that's a pitfall. I need to avoid that Okay So matt do you want to start do you have any common scams or pitfalls in the space that you want to make sure People are aware of the number one thing and this is going to be a timeless scam This is something that'll be around no matter when you watch this video Is never never trust someone with those those backups, you know Like if if you're talking to a customer if someone you think is a customer support person or a friend that wants to help you You cannot give anyone those backups Then they can spend your money. It is very common. They'll say sometimes sometimes it'll be Like an active person so like they've been working you for a while and then they'll take it from you Other times which is even more common is they get your email or your phone number Or your twitter account and they they know that you are interested in bitcoin probably because of a database leak as we spoke about earlier And they'll send you a link. Oh Your wallet is compromised click this link to Fix it and then you click the link and it's like okay enter your words And then you enter your backup and then they take your money. So never do that And if you ever get freaked out just take a deep breath walk away from the computer You know sleep on it like nothing's gonna happen in the meantime. Don't Don't do that the second big thing we see Is get rich quick. So send me bitcoin and I will send you two two times that amount Or I have a great investment strategy for you that gives you guaranteed money You just have to send me some bitcoin and you'll get it in a couple months or whatever pretty much always a scam So just as michael said earlier. I I mean I'm like a broken record on this is just You just slow and steady just constantly Accumulating bitcoin stacking stats and just and just saving saving and saving in bitcoin. Don't don't Don't get cheeky with it, you know, don't think that you need to Everyone thinks they're late when they come in and they're in a rush to try and catch up And that's usually where you get burned Yeah, very good point there. And so some people get caught up in Schemes where they think oh look, I'm gonna become a trader And if you are not professionally a trader and don't forget even lots of professional traders lose money So the reality is It's probably only the top 1% of traders who actually make money, right? So unless you think you are going to be that 1% and obviously sometimes people come into this with like some irrational Confiders they come in and some person tells them. Oh look look at this trading course If you if you follow me in my recommendations, you can blah blah blah And the reality is a lot of people end up losing money because they think they're going to be that 1% But the reality is they're more like the 99% who lose money while trading So the safe strategy really is to just accumulate bitcoin just study savings every week or every day However, however much you can afford to save for the long term You just stack those sats be very wary of anyone who's promising you quick get rich get rich quick schemes Because they can often be like a and sometimes there are different it presents itself in different ways They might do like a mining scam. They might say hey send me some money and it's a mine You you're earning all this money from mining or it's um, oh, hey I've got a trading bot send me some bitcoin and I'll do the trading for you and then how they get you Is because they're pulling on that greed stream They know that people want to make money and so they'll promise this unrealistic outlandish return And as you know, this is like a time honored rule if it sounds too good to be true It probably is so just be wary of that Um, that's always a difficult one or it's bitcoin Yeah, bitcoin is is really good. It's almost too good to be true, but uh, but it's not um, and so um, a couple of a couple other tips as well so As you get more advanced on your security journey you want to start really, uh Yeah, make sure you test your backups because sometimes people Get into a situation where they Have made a backup, but it was years ago and they maybe they wrote it down wrong or they you know You just want to make sure you test that backup to give yourself that confidence So some hardware wallets offer that you but you also want to make sure you're never typing your seed words into the computer So that's also a very important point. Um, because A common hack or a scam is having some kind of key logging malicious software that is trying to Watch for your keyboard and watch what you're typing in and then boom once they get the 24 words boom It's gone. So that's another thing. Just be wary of that um Another tip is if you are using a hardware wallet Generally speaking you want to try and use that hardware wallet to make sure the address is correct That you are either receiving into or that you are paying because it's harder to trick the hardware wallet than it is to trick The computer wallet that you are using Um, as an example, you might be using a software wallet like electrum or specter or sparrow To interact with your cold card or your other hardware wallet And so you want to make sure that you're checking the address on the physical cold card or the ledger or the treza Not just trusting what's on your computer screen um Any other ones matt Yeah, I mean just to add there like uh The whole reason hardware wallets exist is because the average person is completely screwed if they they can't secure their own computer We can't secure our own computers. It's it's not an easy process So what a hardware wallet is it's a purpose built little computer That's that's designed to do one thing only and that is just secure that secret that bitcoin secret that you have your private key that is is the key to all of your funds and the the key strategy it uses is All the good ones have a little screen on it And that little screen will show you your your address information and you always want to confirm it on there because Because it's it's it's not on it's not on your computer. So you want to actually you you have two sources of truth You have you have on your computer and you have on your dedicated little hardware wallet And you want them they but they should both be the same. Otherwise, something's wrong and you should just Not proceed Take a step back. Don't proceed with it Yeah, and another tip is to try to bias towards open source well tested software and hardware within the community So why is that important? um, I mean It's important because Two reasons the software could be malicious. I guess three reasons the software could be malicious. The software could just be garbage uh, or the software might not be um Might not be up to the same standards That across the whole space. So if something happens that software and the software disappears or the wallet disappears You might not be able to restore it on another device Uh, or another wallet. So so what you really want to do is there's there's there's not that many that are very strongly peer reviewed um You know, I'm sure the sailor academy has lists of good ones I think right and and stefan has lists on his own on his own site and ministry of nodes which he runs And and so you really need to cross check that with like different reputable sources and don't trust any specific source And just don't get you know, don't get Don't get cheeky with it. You know, you just you need to pick something that's just reputable and and long long standing Yep All right. Well, look, we're coming close to the end of time. So uh, probably a good point. We have to wrap up But matt, thanks very much for joining us and of course Listeners out there if you are new to bitcoin matt is a great guy to follow in the space I highly recommend you subscribe to his podcast and listen to his shows which is the rabbit hole recap and Citadel dispatch and make sure you follow him online on twitter. So matt, where can everyone find you online? Thanks for having me stefan. It's uh, been a pleasure. Um matt odell com and on twitter. It's matt underscore odell And I will never dm you asking you for money. That's another scam that you should be aware of There's a lot of impersonators on the social media networks. Uh, and they'll they'll pretend to be me, especially since Uh The elves the elves are easy to fake with ones and I always joke around that the the the single biggest fan of my tweets Are all the stefan uh impersonators. They love my tweets. They're just constantly retweet Yeah, so uh, yeah for listeners out there basically There are a lot of scambots basically who impersonate well-known bitcoin people like matt and me and others So just be wary You might think you're talking to us, but you're really talking to a scambot impersonator. So just be wary about that Um, and uh, yeah, so listeners. Hopefully you have found some value out of this series Of course, if you are just watching this now and you haven't seen the the material go to sailor.org And search bitcoin and I think the actual course title is prdv 151 and you can find all the material there. It's free You can subscribe and just learn at your own pace and of course if you want to find me online You can find me you can find my details there stefan lavera.com or um on twitter at stefan lavera and uh Yeah, thanks for having uh, thanks for following along with us on this journey and I'll hand it back to mike from sailor academy now All right. Well, uh, again, thanks everyone, uh for joining us. Um, uh matt, thanks for uh coming on and of course Stefan, thanks for leading this whole thing the last, uh, you know several weeks and everyone All the links to everything we've talked about will be in the description below And again, thanks everyone for joining us