June 7, 2025
Today, I want to discuss a somewhat special topic, which may not be very pleasant, but I think it should be considered by many. Due to recent insurance arrangements, it triggered a thought for me: how should digital assets be properly backed up? There is a saying that goes, 'Tomorrow and accidents do not know which comes first.' Although it may not sound nice, due to the uniqueness of cryptocurrencies, backup might be even more important. Previously, Wang Chun, who went to space, said that if he doesn't return, then his Bitcoin is considered destroyed. This shows that he is the only one who holds his Bitcoin private key; if he is gone, the assets are gone too. However, Wang Chun has no descendants, so he does not care.
Digital assets generally have two storage methods. The first is to keep them on exchanges, such as Binance or OKEx. I have specifically looked into this; as long as you register with your KYC identity, you can definitely retrieve them, but you need to provide proof documents. This is actually quite similar to keeping money in a bank card, centralized custody. However, I think what’s more important is whether the people around you know which platforms you have registered with? Are they clear about the related processes? If someone knows, then the asset issue is not significant, which is equivalent to having made a backup, and you can basically retrieve it.
The second part, which is quite important, is the assets in the wallet. Due to the uniqueness of wallets, there are only two ways to recover them: one is wallet + password, and the other is the private key. But we all know that private keys should never be shared casually, as the private key is the ownership of the digital asset. So how do we back this part up? Currently, one method I know is to use a mnemonic phrase board and then put that board in a bank safe. Another method is multi-signature, but this method is not suitable for ordinary people. I wonder if everyone has done backups for this asset and how they have backed it up?
Therefore, I further thought about whether digital asset backup will upgrade to an industry in the future. Mainly due to the uniqueness of digital assets, most people cannot specifically store their assets with insurance institutions. From a market perspective, I believe this is a blue ocean. I also hope to hear everyone's opinions on this.
Alright, let's talk about the market one last time. Currently, it seems to be under some pressure in the short term. If the pullback does not recover quickly but instead moves in a fluctuating downward trend, the short-term trend will be downward. However, since the prices of Bitcoin and Ethereum are relatively not low compared to before, there is still some confidence in the upcoming market. In the short term, it might drop a bit more, and then I will invest the 10% position that I plan to reduce.
Thank you for your attention and likes.