[00:02:59] Jeff Vandrew: You know, my role here is more head of legal, so I’m in the back doing all the, the unsexy stuff, so to speak. But you know, just talking to, you know, our guys who are out there talking to people, I can tell that it’s really getting through to people Now, the message that we’ve been trying to send all these years in Unchained, you know, as to why this sort of thing is important, this became like a real life illustration of that.

[00:03:23] Jeff Vandrew: Now what’s unfortunate is there were a lot of people that had to get burned before they realized that as Phil said, you know, reating in the traditional financial system is one thing and that really only works cause nobody has any idea. How, what number of things there are, right? So dollars is easy, right?

[00:03:42] Jeff Vandrew: Cause you just print more of them. But even stuff like shares of stock, you know, the market capitalization you read for a company is like an estimate. Nobody actually knows like how many real shares of like Microsoft. There are, there’s like ballpark figures out there, but it’s not entirely clear, right?

[00:03:59] Jeff Vandrew: So that sort of stuff doesn’t fly. And I think unfortunately in this case, it did take a real life illustration for people to get the message. Now, the good news is if you believe, like Phil and I do, that Bitcoin’s really at the beginning of its arc here, and it’s not too late for you, which I definitely don’t think it is.

[00:04:16] Jeff Vandrew: If you were one of those people that did get burned by one of these collapses, actually, it’s kind of a good thing for you, right? Because the silver lining is you learned your lesson early, and now you can get your hands on real Bitcoin before things go parabolic.

[00:04:30] Preston Pysh: And, and to your point about the, oh, go ahead Phil.

[00:04:32] Phil Geiger: Yeah, I was going to say before we move on, Jeff, are you telling Preston’s audience that you don’t run a full Microsoft node ?

[00:04:39] Jeff Vandrew: No, unfortunately not.

[00:04:40] Phil Geiger: You’re not validating the number of shares of Microsoft? What’s going on ? Sorry.

[00:04:45] Preston Pysh: Well there are exchanges out there and these exchanges make a lot of money, reating stock certificates.

[00:04:52] Preston Pysh: And I don’t think a lot of people, you know, if you’re getting zero fees for trading, how is that, how is that company making money? Well, they’re making money because they’re reating stock certificates. And it’s, you often wonder now that people will have an up close and personal understanding of like FDX’s balance of negative, I think it was like 80,000 Bitcoin negative balance of 80,000 bitcoin and the ledgers that they had created with other shadow banks and shadow exchanges.

[00:05:21] Preston Pysh: Is how they do this stuff. And you have to ask yourself, and you have to wonder like how many paper stock certificates are out there between exchanges that are re hypothecating them in order to make money on the lending that the person who thinks they’re holding that share because they see it when they log into their account, it’s not there.

[00:05:40] Preston Pysh: It’s not physically there. It can’t be audited because nobody can run a note on something like that. To your point, it’s important stuff. And I think that this has just made a whole lot of people think twice about what the heck is going on. When I came into this space, Mount GOs had just happened. I wasn’t, I, I showed up in 15, beginning of 15 and that was just all everybody talked about was Mt. Gox.

[00:06:04] Preston Pysh: And so it was just always beat into my head early on, like, you take possession of your coins because if you leave ’em on the exchange, it can blow up like Mt. Gox. We hadn’t seen this. And so now this happens in like such a spectacular way, not in a good way, but like just everybody in the world can see this and we’re reliving Mount GOs, but with just, I don’t know how many more people are involved in this, but it’s insane.

[00:06:30] Jeff Vandrew: A number of people. And it’s also the sheen of respectability thing because I, I’m I date back to around the same time as you Preston. Yeah. And a lot of people probably rationalized it well by saying like, well Mt. Gox was like a trading card website. Yeah. Like in some other country and you had to do weird stuff with PayPal.

[00:06:48] Jeff Vandrew: You know these new institutions now, like FTX Oh, they’re part of the legitimate system and they’re highly regulated and they have bank accounts and they got Tom Brady . Yeah. And Tom Brady and Larry David. And they’re, you know, talking to congressmen and stuff like that. You know what I mean? So I think this really got across that it doesn’t matter whether you’re a trading card website overseas, or you’ve got a big fancy office building in Miami or whatever.

[00:07:13] Preston Pysh: It’s really the same thing at the end of the day. I think we could even make the argument that the flashier, the exchange and the more of a me meteoric rise that it has. The more concerned people should have in this particular space because you can’t do the fractional reserve games of the legacy system with these assets with Bitcoin specifically.

[00:07:41] Preston Pysh: Like you just can’t, you can’t fake it. It is crazy. I and I, I feel terrible for all these people who just got wrecked who did not understand what they were dealing with, and that were totally duped by the celebrity behind so much of the FTX stuff and a lot of the other things that blew up. But so as a person would transition from that to Unchained, I’ve had family members that have called me up and they’re just like, I, I want to take self custody.

[00:08:11] Preston Pysh: I’ve heard about it. In fact, they’ve actually. Talk to me about Unchained Capital. My uncle actually brought that up to me and he’s like, I’m just concerned that I just don’t have the technical competence to take possession of my keys. So how do you guys, how do you guys deal with that particular concern?

[00:08:28] Preston Pysh: Is this something you hear a lot? I suspect it is. But walk us through what you would say to that type

[00:08:33] Jeff Vandrew: of person. You have got the right guy for this because that is Phil’s entire, well not, I don’t want to say his entire role cause Phil does a lot of really important stuff at Unchain, but that’s Phil’s primary role, so I’m going to let him take this one.

[00:08:46] Jeff Vandrew: All right.

[00:08:46] Phil Geiger: And I’d like to think that the Unchained concierge team is designed for your uncle. Now, in my experience, really the thing that people are, are nervous about, and maybe they don’t quite know it yet, but the thing that they’re nervous about is having a single point of failure. Mm-hmm. for their Bitcoin.

[00:09:05] Phil Geiger: And they feel like if they’re, if they’re, you know, holding the keys, they’re going to make a mistake. They’re going to lose all their Bitcoin. and there’s been a lot of, there, there have been a ton of news articles of people who, you know, have lost their Bitcoin. They’ve, you know, the famous news articles of the hard drive in a dump somewhere in England or whatever with like 200 million of Bitcoin, the New York Times article about the guy who forgot the pin to his ledger, whatever.

[00:09:29] Phil Geiger: There’s a lot of those articles and the consistent trait among all of them is that there was a single point of failure. Now at Unchained and the concierge team, what we do is we walk clients through setting up Bitcoin addresses where there are no single points of failure. And when I say no single points of failure, I can just list them all.

[00:09:49] Phil Geiger: Unchained Capital is not a single point of failure for your Bitcoin. You as a client are not a single point of failure for your Bitcoin. You have total control of the Bitcoin. You have enough keys to move Bitcoin on your own, but you have a lot of redundancy. So if you make a critical mistake, you don’t lose your Bitcoin.

[00:10:06] Phil Geiger: And I think that’s really what has been resonating with people and that’s why we’re seeing adoption tick up. It’s this idea of collaborative custody, which is what we do at Unchain, where we have a minority of keys and clients have a majority of keys, means that you can make one of those mistakes without losing Bitcoin.

[00:10:24] Phil Geiger: And that, I think is the biggest pain point that people have with self custody or even just taking that step of self custody. The other thing that we do is, so my team will literally ship you hardware, wallets a little. Devices will help you set them up. We’ll walk you through creating them, building a vault, and what we always say is, Hey, now that you have your Bitcoin address that you control, it doesn’t mean that you need to move, you know all.

[00:10:45] Phil Geiger: Hundred whatever thousand Bitcoin that you have, or you know, if you’re just getting started, it doesn’t mean you have to buy all of your Bitcoin and hold it directly there. You can start with just a little bit, start with 10 bucks, try it out, get a feel for it, learn the tools, we’re there for you. You can call us up and we will hop on another call to walk you through these, these processes.

[00:11:03] Phil Geiger: And I think, yeah, it’s, it’s really designed for folks that are nervous about holding keys. And what’s nice about it is I actually believe it is the most secure way to store Bitcoin because there are no single points of failure. There’s a lot of really hardcore site for punk ways to set up your Bitcoin vault.

[00:11:23] Phil Geiger: But a lot of those end up creating yourself as a single point of failure. If you get hit in the head, what’s going to happen to your Bitcoin? Are people going to be able to recover it?

[00:11:31] Jeff Vandrew: Yeah. And I want to just tell a real life story related to Phil’s point. I know a decent amount about. I knew Multisig was important before, you know, Unchained really hit the scene.

[00:11:41] Jeff Vandrew: I used to have my own Multisignature set up for my Bitcoin that I structured myself with Electrum. But when Bitcoin really came, I mean, excuse me, when Unchained came on my radar, which was before I was working for the company, I still moved my coins to Unchained it to Multisig for Unchained. The reason why I did that is because, just because I could do all those things in a very complicated, and to most people intimidating way, I knew that my family members couldn’t, if I wasn’t around, they were going to have a lot of trouble.

[00:12:08] Jeff Vandrew: So, I mean, at that time, I mean, Phil was with the company at that time, so it was basically a matter of me being able to tell my family members like, Hey, if something goes wrong, you can call Phil and his team. You know what I mean? And they’re, they’ll walk you through what you need to do to be, make sure these coins don’t get lost.

[00:12:24] Preston Pysh: Yeah, I think that’s an important point for a lot of people, especially for all the tech savvy, you know, people that are out there that that set it all up. It’s just like, You know, I know my wife and yeah, she’s not going to be doing the, that type of stuff. So she needs somebody that she can access. You know, I, we have a protocol set up and, but it’s an important thing for people to think about.

[00:12:47] Preston Pysh: Talk to us about. So it’s, speaking of protocol, so you guys, only this past week, I have a thing called the inheritance protocol. Walk us through what you guys are trying to do with this and why you guys think it’s important. And then talk to us about two terms. I know this is kind of a multi-part question here, but you got two terms, title and possession.

[00:13:09] Preston Pysh: Talk us through all these ideas.

[00:13:12] Jeff Vandrew: Yeah, sure. I’ll start and then I’ll pass it over to Phil because a lot, I would say the bigger part of this protocol really has been Phil’s brainchild. He’s been amazing in getting this thing rolled out. So, you know what I found, what’s a little bit unusual about my background for a guy that’s, you know, head of legal for a company is when I was in practice in my own firm, I actually specialized in estate planning.

[00:13:34] Jeff Vandrew: So this was actually my real wheelhouse and area of the law when I was in practice. So when I came to Unchained, you know, I would get a lot of questions from our, you know, client solutions people and client services people who are talking to our customers every day and they would say, Hey, we get these people that are just very, very concerned.

[00:13:52] Jeff Vandrew: About how their loved ones are going to get ahold of their Bitcoin, you know, when they pass away. And, you know, at the time I was kind of like, well, I mean there’s really not, there’s not a lot to this, right? It’s an asset. It passes like anything else, et cetera. But what I realized when I really took a step back and thought about that question harder is Bitcoiners tend to have this idea where they only think about the possession side of the equation and not the title side of the equation.

[00:14:19] Jeff Vandrew: And to illustrate what those words mean, I’m, I’m going to give you like a really, really simple example that doesn’t even involve Bitcoin. because this applies to pretty much any kind of property. Preston, if you had, let’s say, a big bar gold sitting on your desk there, right? If while you, after tonight, after we finish recording, if you were to go to bed and I snuck into your house and I grabbed that bar of gold and I ran out the door, I mean, I have possession of that bar of gold, right?

[00:14:46] Jeff Vandrew: But I don’t have title to it. I don’t have any sort of valid title to it. And as a result, if you looked at your security camera and you saw me walk into your house and grab that bar of gold, in addition, I mean, just even forget about all the criminal stuff for a second, you could sue me, right? To get that bar gold back.

[00:15:01] Jeff Vandrew: It’s yours. It belongs to you. The fact that I possess it doesn’t mean a whole lot, right? In that, in that instance, per se, you know, the flip side works too. If you had that bar gold and you just lost it, like, you know, you accidentally threw it in the trash and it ended up at the bottom of the dump. You still have title to it, but it’s, you know, in the bottom of the landfill somewhere, that doesn’t do you too much.

[00:15:22] Jeff Vandrew: Too much good either. So, you know, the deficiency in a lot of the existing solutions for Bitcoin passing it on to someone in the event of your demise is they don’t consider both parts of the picture. Because people are either going to a lawyer and that’s where they’re ending it, and they’re not thinking about how that loved one is going to get their keys, right?

[00:15:43] Jeff Vandrew: So in other words, Your will or your trust or whatever your estate plan is that you have set up that’s going to make sure that the person that you want to get title to your Bitcoin gets title, which is critically important, but if there’s not a protocol in place where they’re able to get ahold of the keys, it’s not going to do them a ton of good.

[00:16:01] Jeff Vandrew: The flip side is the one that Bitcoiners really struggle with. You know, you’ll sometimes hear a lot the idea like, well, I don’t need any of this fancy stuff. My wife and my kids know where my keys are, so when I’m gone, they’ll get my Bitcoin. Yeah, I mean, that sounds great, but except for the fact that they, you know, you haven’t gone through the appropriate legal process for them to have clear title.

[00:16:22] Jeff Vandrew: And if you don’t do that, first of all, they could end up suing each other to try to record, you know, your loved ones could end up suing each other to try to recover Bitcoin from each other, saying that they were really the ones that had the entitlement to it. Even if it doesn’t happen at the first generation, it could happen multiple generations down the line because you don’t have that.

[00:16:42] Jeff Vandrew: Paper trail of valid title passing down. So, I mean, even, and I don’t say this in any sort of a negative way, I say this with all respect, but even if you fancy yourself like a, a cipher punk that doesn’t, you know, believe in these systems, you don’t have to believe in them. You don’t have to be interested in them cause they’re interested in you.

[00:17:00] Jeff Vandrew: Right? That’s like the o the old fashioned way of phrasing it. So if you want to take care of the people that you really care about and love, you really gotta handle both sides of this. So, what we did as part of the inheritance protocol, you know, the, the inside baseball of how this all started is actually at least mildly interesting.

[00:17:17] Jeff Vandrew: My first started thinking about this, I was like, you know, my side of this, the legal side as a lawyer is not, I mean, it’s very, very important that you get it done. And we can provide some basic advice on this for people, how to seek out an attorney and how to get these documents drawn up. But it’s actually in certain ways, the easy part, the hard part is making, coming up with a protocol.

[00:17:37] Jeff Vandrew: That is both secure while you’re still alive with respect to your keys, while still making it seamless for the people that need to get them after your demise to get those keys. And that’s when I, you know, Unchained, we have this great concierge team led by Phil that, you know, even before they got into the inheritance game, their whole deal is helping people deal with their keys.

[00:17:57] Jeff Vandrew: I mean, that’s one of the most important things concierge does. So it just struck me immediately it was like, this seems to me to be predominantly a concierge issue. And I talked to Phil about it and like he just did an amazing job picking up the ball, really ramming home, this protocol, the drafting, all the hard work of really getting this together as a product.

[00:18:15] Jeff Vandrew: And it’s something that we could get out in a valuable way to our clients, was very much on his side of the ledger. And with that, you know, I’d love to just pass it over to Phil for a second to talk more about the, you know, the keys aspect to it, the, the actual possession and how that works.

[00:18:32] Phil Geiger: Well, thanks, Jeff.

[00:18:33] Phil Geiger: That’s, that’s super kind of you. On our concierge calls, I would say the number one question we receive is, how do I ensure that my loved ones have access to my Bitcoin? If something happens to me, and in particular my non-technical, non Bitcoin or loved ones, like we might be hardcore Bitcoiners, but maybe our spouses or family members, they support us, but don’t necessarily understand, you know, multisig.

[00:18:58] Phil Geiger: That’s the primary point that we really tried to solve. Secondarily, it’s how do I do this today without divulging my Bitcoin balances or creating single points of failure in either like an executor or trustee or a loved one? Again, we kind of go back to this idea of single points of failure. If somebody has the keys, all of the keys to your Bitcoin, they’re holding your Bitcoin, they can see how much it is.

[00:19:24] Phil Geiger: And then the third point is really, how do I do this? So it’s not like a really technical Rube Goldberg machine. Affordably simply. And that’s really the, the three questions or the three problems that we tried to solve with this first edition of our inheritance protocol. And most of the magic comes from using multisignature.

[00:19:47] Phil Geiger: So a Multisignature address is a type of Bitcoin address constructed by multiple keys. Keys are required to build it, required to spend it. In our situation, we use a two out of three Multisignature Bitcoin address. What’s really nice about Multisignature is when done correctly, again, it eliminates all single points of failure.

[00:20:08] Phil Geiger: But what that means in practice is that a single seed phrase no longer can cause somebody who has that seed phrase to find or spend your Bitcoin by itself. So, you know, we’ve seen a lot of, over the past few years, a lot of like. You know, hacks where Phish emails will go out to people and it’ll say, Hey, enter your seed phrase here.

[00:20:31] Phil Geiger: And it’s somebody who ends up stealing their Bitcoin. Now the reason that that works is because it’s a single signature Bitcoin wallet and single signature. If you have the seed phrase, you have the Bitcoin multisignature just like really separates that idea of a key from the directions to your Bitcoin.

[00:20:50] Phil Geiger: I like to call it the treasure map. So in Multisig, you need to have keys plus year map in order to find the Bitcoin, but as a result, you can safely give one of the keys to an executor or trustee today and with one key. Again, they can’t see how much Bitcoin you have, they can’t spend the Bitcoin. They’re just holding one piece of the puzzle.

[00:21:14] Phil Geiger: And that’s, that’s really the foundation now. The protocol itself is really just a series of letters. So we have a letter that you can give to an executor or trustee today. It says, Hey, I’d like you to help me out holding a key to my Bitcoin. It’s not a single point of failure. You know, if you lose it, just let me know.

[00:21:33] Phil Geiger: We’ll rotate it out, but please protect it. You will need it in the event that something happens to me. The other thing that we give folks is an actual seed phrase in a tamper evident bag with another letter only to be opened in the event that something happens to you. Now, the second letter has a few more pieces of information.

[00:21:51] Phil Geiger: Hey, I was working with a company called Unchained. This is a key to my Bitcoin wallet. Please get in contact with them as soon as you are legally able, so they, you still might have to go through, you know, probate court and wait for, wait for all that legal stuff to be cleared out before you can actually get on a phone call with us.

[00:22:07] Phil Geiger: But as soon as you’re legally able to, legally able to, you can hop on a call with Unchain. We’ll help you walk through the recovery process. So, yeah. The first edition of the Inheritance Protocol really is focusing on solving that possession issue. And now what we also do provide is a series of questions, an estate planner questionnaire that you can use when you’re evaluating estate planners and figuring out whether you want to have a will or whether you want to have a trust, whether you like that person that you’re actually interacting with.

[00:22:35] Phil Geiger: So we do have some resources there as well. But primarily this edition is helping solve what Jeff mentioned, which was the possession side of the equation.

[00:22:43] Preston Pysh: Talk to us about that term, probate versus non probate assets so that people understand what that means.

[00:22:51] Jeff Vandrew: Yeah, so you know, the, the typo probate is the traditionally court supervised process of transferring title from the a deceased person to their ultimate beneficiaries.

[00:23:04] Jeff Vandrew: That’s sort of the best way to put it. It actually set up primarily to, to protect creditors, , because you the credit, they get paid before all your beneficiaries, of course, and any and everything else. But that’s traditionally how it works. But because it is set up primarily to protect creditors, it is very public in the majority of states.

[00:23:26] Jeff Vandrew: And for Bitcoiners with substantial Bitcoin holdings, they may not want the fact that they have substantial Bitcoin holdings to end up in the public record. Cause probate records, they’re not a public record as in the type that gets published in the, you know, the legal notice as part of the newspaper or everything’s in the tiny print.

[00:23:45] Jeff Vandrew: Typically it’s not going to end up in there, but it is in a government office that if someone wanted to, they could walk in and ask for a copy of it and pay a $15 photocopy fee or something and get a copy and find out what assets you had. Right. So because of that, a lot of people choose to, as part of their estate plan, use something like a revocable living trust or other similar mechanism that removes the assets out of the probate system and then causes them to be passed down, you know, to the next generation through a private process.

[00:24:18] Jeff Vandrew: It’s still a legal process. It’s just typically what I would call a non court supervised process. It only ends up in court in the event someone files a lawsuit. Whereas, you know, with probate, even if you’re in a state with a streamlined probate process where you don’t have to go to a court in a traditional sense, there are still public filings involved.

[00:24:38] Preston Pysh: Got it. Talk to us. Oh, go ahead Phil. Did you have something else?

[00:24:42] Phil Geiger: Just to reiterate this point, like there’s, there’s two points that Jeff has made that really, like, I, I myself am I would call myself a, a bitcoin first and foremost, and very, you know, just learning about the, the legal side of the equation here.

[00:24:53] Phil Geiger: But the two points that Jeff brought up that really stood out for me in this entire process were, was this one that, Hey, if you don’t do anything then and you die, like your entire Bitcoin balance is going to be public record for all of your descendants, right? So whoever ends up getting the Bitcoin, you’ve now doxed their entire stash.

[00:25:15] Phil Geiger: And then on top of that, if you haven’t done a will or set up a trust correctly, like. Those descendants could be suing each other. So it’s like all of their Bitcoin could be public record and they could be going through a, you know, arduous legal battle. And so it, for me, it just was like a wake up call.

[00:25:34] Phil Geiger: Like, I need to get on this immediately, figure out the title and yeah, it, it doesn’t matter really how cipher punk your setup is, how technological it is. Like if you still live in the US you know, or while you die or your family lives in the us like it’s going to happen.

[00:25:50] Jeff Vandrew: All this court process is going to happen.

[00:25:53] Jeff Vandrew: Yeah. And what’s really wild too, to the doxing point Phil brought up in most states, so not only will your Bitcoin balance be in the, or at least a rough approximation in the public record, but your beneficiaries names and their home addresses are in there. So that is not the, the best opsec obviously.

[00:26:13] Jeff Vandrew: Hmm. Fascinating

[00:26:15] Preston Pysh: points there guys. Talk to us a little bit about IRAs. Break it down for us. I think most people are tr you know, they’re used to the traditional versus Roth discussion, but talk to us a little bit about checkbook IRAs. I know that’s something that you talk about Jeff. Mm-hmm. , explain what that term means and just kind of give us a one over the world on, on your just opinions of IRAs.

[00:26:39] Jeff Vandrew: Yeah, sure. So, I mean, that was a big part of what I did before I actually came to Unchained was, you know, I was an attorney specializing in, in a lot of ways in alternative IRAs. And Unchained actually purchased my IRA product back then, and that’s how I ended up here at Unchained. So this is an issue, you know, sort of near and dear to my heart.

[00:26:59] Jeff Vandrew: You know, in those days you mentioned the term checkbook IRA. If someone wanted to hold Bitcoin in an IRA and for all the reasons we talked about at the opening of the show, they didn’t want, you know, those keys to be held on an exchange or some sort of other, you know, Bitcoin custodian or whatever the case might be.

[00:27:18] Jeff Vandrew: The only way to do it back then was through a checkbook IRA, which was a type of IRA where you put in, basically you slapped an L L C in between the IRA custodian and the underlying investment, which was this, in this case, Bitcoin, to shield the underlying investment from the custodian. So instead of the I RRA custodian CU in Bitcoin, the IRA custodian just CU Custodied and L L C, and it was the L L C that actually owned the Bitcoin, but typically what the way you would do it is you would name the IRA account holder as manager of the L L C and as a manager of the L L C, they were the person that was entitled to actually have control over the keys to the underlying bitcoin.

[00:28:00] Jeff Vandrew: I have probably it’s have set up over a thousand of those over the years as an attorney. Eventually though, what happened was just a little bit over a year ago, November of 2021, a tax court decision came down called McNulty. It was McNulty versus Commissioner of Internal Revenue. And the ruling in that, in that case, without getting too far into the weeds, threw a lot of cold water on the checkbook IRA structure.

[00:28:28] Jeff Vandrew: The court, you know, IRAs are required to have a custodian under the statute that enables IRAs section 4 0 8 of the Internal Revenue Code. And the court basically came up with this idea that if the custodian didn’t have involvement in the underlying investment that was underneath that l l. That it wasn’t real custody.

[00:28:50] Jeff Vandrew: The whole thing was effectively a sham and it wasn’t an effective IRA structure. I’m paraphrasing to make good radio here But I wrote an art, if you really want to read the nerd explanation about it, we have an article that I wrote on the Unchained blog that you can go check out. What’s it called? So what’s it called,

[00:29:07] Preston Pysh: Jeff, just so I can have a link in there.

[00:29:08] Jeff Vandrew: If you put, it’s the only one with McNulty in the title. It’s something like what Bitcoiners should know about the McNulty case. We have no other McNulty related blog posts, thankfully. Jeff also has, Jeff also

[00:29:20] Phil Geiger: has an hour long webinar where he goes into agonizing details of McNulty case. I’ll, I’ll have a watch for, for people who are into the retirement inheritance side of Bitcoin.

[00:29:31] Phil Geiger: I think it’s an excellent watch.

[00:29:34] Preston Pysh: I’ll have a link to that too. I’m, I’ll go find the video and we’ll have that in the show notes as

[00:29:37] Jeff Vandrew: well. I believe it’s linked in the blog post. Oh, it is? Okay. You should be able, yeah, perfect. You should be able to grab it pretty easily there. But anyway, yeah, so that threw a lot of cold water on this structure.

[00:29:46] Jeff Vandrew: Now admittedly, the McNulty case is like really poorly reasoned. The judge in the case clearly didn’t really have a strong understanding in IRAs cause they are a very highly specialized area of the law. I’m an attorney and a C P A, so I am what you would probably call a tax lawyer. Right? But my, you know, I sort of like, what, what’s the, the banin quote?

[00:30:08] Jeff Vandrew: Like, I was born in IRAs, you merely adopted them. Right? So a lot of, you know, tax lawyers, if you don’t have a lot of experience in IRAs, it can be very opaque to you. Just like, if you were to ask me, you know, you know, very arcane questions about international taxation, that’s not my wheelhouse. That’s not really what I do, you know, international stuff.

[00:30:28] Jeff Vandrew: So I wouldn’t have a good answer. So it’s not a reflection on how smart somebody is, it’s just like what their particular wheelhouse. So as a result, because it was only a trial court opinion, and like I said, it wasn’t honestly all that well reasoned. There are certain providers that have just chosen to ignore the case and keep offering their continuing checkbook IRA structures to Bitcoiners.

[00:30:49] Jeff Vandrew: That’s definitely a thing that’s still out there. I don’t advise it only because I’m a conservative guy. I don’t want to be the test case for the next guy that the i s comes after. You know, the mc Noey case was not specifically about Bitcoin. It was actually about gold. Oh, interesting. But, but I don’t want to be the guy that the I R S decides to flow to trial balloon on.

[00:31:10] Jeff Vandrew: Right. To see if we can extend this holding over and make it work for Bitcoin as well. So what we did here at Unchained is we tried to design our IRA product in such a way that our customers could get the key control that they want and that also provides them that security that their Bitcoin is actually there.

[00:31:28] Jeff Vandrew: Right. Because that’s what you need to know more than anything else. Your Bitcoin’s really there. While at the same time, you know, meeting this sort of enhanced definition of custody that the McNulty court sort of whipped up, you know, for the first time, it was the first time most of us had ever heard about it and was sort of a departure from earlier checkbook i r a cases in the late nineties and early two thousands that had, you know, been in the tax port.

[00:31:53] Jeff Vandrew: So the way we did that is our IRAs are not checkbook IRAs, there is no L L C in the middle between the IRA custodian and the underlying investment. You know, that that L L C prevents the IRA custodian from actually seeing what’s going on, which is what I think distressed the court a lot in McNulty, understandably, because the IRA custodian has no way in that case of reporting, you know, tax abuse to the I R S.

[00:32:18] Jeff Vandrew: If I were the I R S, I suppose that I would not like that either. So what our structure does instead is we title an I RRA vault. In exactly the same way than an IRA at the most plain, boring vanilla Legacy financial institution brokerage would be titled, for those of you who have IRAs that you know, Ameritrade or Fidelity or Schwab, go pull up your statement.

[00:32:43] Jeff Vandrew: You’ll say it doesn’t, you’ll see it doesn’t have your name on it. It’ll actually say, if it’s TD Ameritrade, for instance, it’ll say, TD Ameritrade clearing for the benefit of Jeff Van IRA. That’s the way IRAs are titled, and what that means is that TD Ameritrade has legal title. It’s the actual coins, and the IRA count holder has what’s called equitable title.

[00:33:06] Jeff Vandrew: What that, and what that in layman’s terms means is TD Ameritrade has to have vision and some level of understanding of what’s going on with the asset. But the ultimate owner, the person who for whom everything’s benefit, has to be, is that account holder. The guy whose name comes after the, for the benefit of.

[00:33:26] Jeff Vandrew: So if you open an IRA with us at Unchained, we are going to title it exactly the same way as a legacy financial institution to try and stay as conservative as possible. But the secret sauce where we’re able to give you key control so that you know no one can take your Bitcoin away from you, is we ev every one of our clients enters into it what’s called a tri-party delegation agreement with the IRA custodian.

[00:33:52] Jeff Vandrew: The IRA custodian agrees like, Hey, I’m the custodian over these coins, but I delegate the keys to you and Unchained. And our IRA custodian and Unchained is Solar National Bank. Cause IRA, custodians by law have to be effectively either a bank or a trust company. So they act as custodian, but they, they’re legally delegating key control both to, you know, just like any other Unchained.

[00:34:18] Jeff Vandrew: Two keys to the account holder to, you know, obviously secure appropriately, and then one key to Unchained to sort of act as a backup key. The second thing that’s really important to the structure, besides just the titling, and the fact that there’s no L L C involved is based on the way that it’s structured.

[00:34:35] Jeff Vandrew: Unchained and the IRA custodian have eyes on that vault. And if you’re a hardcore Bitcoin, that might sound scary, but in the context of an IRA, that’s exactly what you want. Because the Mrs. McNulty lost her tax benefits due to the fact that her custodian had no way, no vision on those assets, didn’t know what the investments were.

[00:34:57] Jeff Vandrew: That was the whole turning point in that case. So by giving us that, we’re a, we know, hey, you moved coins out of your IRA. You have the entitlement to do that cause they’re your keys. It’s just going to get reported as a taxable IRA distribution just like it’s supposed to be. So really the goal here is to sort of thread that needle, do everything in a tax compliant way while still giving you control over your keys.

[00:35:21] Preston Pysh: All I heard was Bitcoin’s better than gold

[00:35:27] Phil Geiger: Yeah. I’d like to just add on a, a few things that Jeff said. So, Unchained IRA, not a self-directed IRA. So I, I actually worked with Jeff before Unchained purchased Kiki for IRA and I, I set up a self-directed IRA for myself to hold the keys to. I had an old four oh that I wanted to roll into Bitcoin and the process of setting up the L LC was very difficult and arduous.

[00:35:51] Phil Geiger: And then on top of that, every year you have to like fill out these documents that you then have to like physically mail. It was just kind of a headache. There was a lot of like reporting requirements. What’s nice about this structure is you’re, you’re not dealing with legal entities that you are responsible for reporting for unchanged, just kind of takes care of that side of the equation.

[00:36:12] Phil Geiger: And then, yeah, like threading the needle through the ulti stuff is really nice because legally this IRA looks very plain. It’s just like any other IRA.

[00:36:23] Preston Pysh: Jeff, I’m glad at the end of the day you have the keys. Jeff, I’m really glad that you told me it was a gold case because a lot of that wasn’t making sense to me until they’re at the end and you’re like, yeah, they could, they can’t audit the vault.

[00:36:35] Preston Pysh: They can’t prove how much gold is sitting in that vault. Where with Bitcoin, they can literally just look at the public address and they can see that every, everything that’s been deposited into that address is still.

[00:36:46] Jeff Vandrew: Exactly, and that was a big part of like the court’s rationale was like she, so what Mrs.

[00:36:51] Jeff Vandrew: McNulty did is she put the gold in her safe with a, I believe it was a post-it note on it that said like, this belongs to X, Y, Z L L C. And one of the, one of the factors the court brought up among many was the fact that, well, I mean anything, that goal could have gone anywhere and the custodian would’ve had no idea.

[00:37:12] Jeff Vandrew: They were just relying on the fact. , you know, she was saying it was still there. Whereas with Bitcoin it’s a very different situation, right? There’s a publicly auditable blockchain. Part of your IRA account agreement with your Unchained IRA is you agree that you know you’re going to keep your IRA Bitcoin in this vault, right?

[00:37:30] Jeff Vandrew: Yeah. And if it leaves that vault, that’s a distribution. So everything is very above board, which in the context of an IRA is exactly what you want, right? You don’t want no K Y C bitcoin in an IRA. The whole point of an IRA is you’re getting tax benefits in exchange for following a set of rules that you have to be able to prove, you know, to the government.

[00:37:52] Jeff Vandrew: So you said you

[00:37:52] Preston Pysh: didn’t want to talk about international tax law, so my next question takes us now.

[00:37:58] Jeff Vandrew: I’m just kidding. I know a little, just enough to be dangerous. Talk to us

[00:38:01] Preston Pysh: about Bitcoin. Legal Tender International. So we have El Salvador. Have you guys heard of legal tender laws kind of popping up or other countries around the world kind of looking to adopt similar Tender laws?

[00:38:16] Jeff Vandrew: I have heard about them in the United States, actually at the state level. So states, individual states have the ability to do that. I don’t know if it’ll pass in Florida here. Our next legislative session is in March, and there’s a proposal to make Bitcoin legal tender here. It’s nice. I mean, how much, you know, what is, what difference does it make on a day-to-day basis?

[00:38:37] Jeff Vandrew: I’m not exactly sure, but, well, from a tax

[00:38:40] Preston Pysh: standpoint, wouldn’t that be a huge deal down there?

[00:38:44] Jeff Vandrew: Not really. It just means you’d be able to like pay your taxes and your, you know, DMV registration, I guess in Bitcoin if you wanted to, but it wouldn’t change the tax effects of it. The fact that it’s like, let’s say it’s legal tender in Florida.

[00:38:57] Jeff Vandrew: It doesn’t change the current IRS interpretation of the law that Bitcoin’s property and not currency. So that wouldn’t make too much of a difference there. The fact that it is legal tender in El Salvador, not everyone agrees with me on this, but I think it actually does make a difference Under the Uniform Commercial Code, it moves Bitcoin from being what, what’s called a general intangible to being money.

[00:39:22] Jeff Vandrew: Doesn’t matter to you at all if you’re listening to this podcast, unless you’re, you know, in the world of finance and you care, care about things like. Lending and perfecting security interests. But I don’t think that’s going to matter very much soon anyway, because the newest version of the Uniform commercial Code that states are starting to adopt, hopefully rapidly, has an, an entire, I wish it had an entire new section on Bitcoin, but unfortunately, you know, they have to be neutral, so to speak.

[00:39:49] Jeff Vandrew: So it has a section on virtual currency, which is a slightly less odious term than cryptocurrency. That’s the one I really hate using guys.

[00:39:59] Preston Pysh: So we talked a little bit about FTX at the beginning of the show. From a legal policy standpoint, W how, how do you see things progressing? I know there was some big news recently that I know Ethereum was almost going to be bucketed with Bitcoin as far as being a commodity or being viewed optically as a commodity.

[00:40:18] Preston Pysh: And it looks like that has been reversed and now it’s just Bitcoin that’s going to be viewed as a commodity and everything else is going to be a security. What else are you hearing and what do you think is important to filter out a lot of the noise where, what is the signal that’s that’s happening since FTX, you know, from a legal perspective in terms of what your listeners would really be caring about?

[00:40:41] Jeff Vandrew: Probably not too much. I mean, it’s the bigger thing I think is just that, what we talked about at the top of the show, and that’s just realizing the importance of not your keys, not your Bitcoin and that Bitcoin’s just not a Rey asset the way other assets are. Not that they should really beated either on the legal side.

[00:40:59] Jeff Vandrew: I mean, if you’re a nerd like me, you’re, you know, following the bankruptcy proceedings in Delaware is probably going to be fairly interesting. Cause we’ve never had anything quite like this before. They had all kinds of like, goofy salacious details are going to come out in the bankruptcy if you’re interested in that stuff.

[00:41:14] Jeff Vandrew: Like, I, I don’t know, I think we found out a couple weeks ago that FTX owed like some obscene amount of money to Margaritaville. Casino, you know, just like goof goofy stuff like that. But I think that’s most of what you’re going to see. And then the big fallout’s going to going to see, going to be like, who gets dragged in down by this?

[00:41:33] Jeff Vandrew: You know, we’ve obviously already seen that this hasn’t been limited to FTX, right? They’ve brought unfortunately other companies down with them. And I say unfortunately, cause I don’t want to ever see anybody lose their job, but, you know, we may not be done, there may still be more to come here. Companies that are sort of still hanging on by a thread but won’t be able to do that much longer.

[00:41:56] Jeff Vandrew: That’ll probably be the thing to keep an eye out for and for, for God’s sake. If you have your Bitcoin still on an exchange, get it off. Shit it off to do.

[00:42:06] Preston Pysh: So , get it off, put a squeeze on these exchanges, get it off.

[00:42:12] Phil Geiger: Funny, another thing, another thing that we were talking about a little bit earlier in the episode is just the scale of FTX.

[00:42:17] Preston Pysh: So, I, I actually got into Bitcoin around the same time as you guys after the Mo GOs collapsed. And I just remember, you know, any news article would cause the price of Bitcoin to spike by tens of dollars, which we’re big moves, which were really big

[00:42:33] Phil Geiger: moves.

[00:42:34] Jeff Vandrew: Huge. Yeah, yeah, yeah. We’re celebrating.

[00:42:36] Phil Geiger: But now we have, you know, f FTX, we have Tom Brady, we have Matt Damon.

[00:42:41] Phil Geiger: You know, it’s, it’s at, it’s at like the celebrity kind of pop culture level. What I could foresee happening is certain, you know, legislation or government’s encouraging, okay, well now we need, like, we need our banking sector to hold Bitcoin because they’re the responsible ones. They’re going to be able to, to custody client funds.

[00:43:00] Phil Geiger: But I think the problem with Bitcoin is that the model of a centralized, like third party custodian just doesn’t work. Like no company ever has to be a single point of failure for Bitcoin because we have tools like Multisig, which are just built into the network. So I think we’re going to see a lot of the same things just at an increasingly large scale.

[00:43:20] Phil Geiger: The other thing I think about is like the central bank digital currencies that these foreign countries are starting to think about and the Federal Reserves starting to think about. It’s like, guys, we’ve, we’ve already seen what happens when you airdrop stellar. Like, we’re go . We’re going to see the same thing with the digital x, y, or Z currency.

[00:43:36] Phil Geiger: I think. So I just think it’s kind of, I interesting to see the scale at which all these things are a occurring at this point.

[00:43:44] Jeff Vandrew: I re to, to Phil’s point there too, I recently spoke on a panel at the Florida Bankers Association, and because of the way those guys think, one of the questions that, one of the first questions they asked me is like, well, what about CBDs?

[00:43:56] Jeff Vandrew: Aren’t CBDs going to like kill Bitcoin? And what I told them was like, CBDC is like, it’s not even competitive with Bitcoin. That’s just, it’s like, that’s like saying PayPal would kill Bitcoin. You know what I mean? Cbd. The CBDs aren’t even really interesting, frankly because like we have digital dollars now people, for the most part aren’t walking around.

[00:44:17] Jeff Vandrew: Some people still do, but aren’t walking around with huge amounts of cash. Your average person is spending digital dollars on their credit card and then paying that credit card bill over the internet with digital dollars from their bank account that they never physically see in their entire life. And the C B D C, if anything, just like cuts out visa.

[00:44:37] Jeff Vandrew: So who cares? Like I, you know, that that has nothing to do with Bitcoin. That’s, I view that as a, an interbank flight or squabble that, you know, I have no stake or interest in. Yeah,

[00:44:48] Phil Geiger: I feel like the ironic thing about CBDC is if they, if, if a central bank actually releases one, all of the private banks are going to have to compete with that.

[00:44:57] Phil Geiger: because like now people can just get an account with the Federal Reserve or whomever. . And how do the private banks compete with that service? Well, there’s this thing called Bitcoin out here that works totally differently. So I, I view CBCs as like kind of an admission of defeat, and it will accelerate Bitcoin adoption because in order to stay competitive and relevant, these larger banks are going to have to start offering Bitcoin to their clients.

[00:45:20] Preston Pysh: Yeah. If anything, I think you can make the argument that the banks are going to help us prevent CBDs from happening, which, you know, is not a bad thing.

[00:45:28] Phil Geiger: Right? Yeah. It’s a direct attack on their business model, right?

[00:45:31] Jeff Vandrew: Yeah. Yeah. The, the thing that CBD CS are most comparable to is postal banking. Are you guys familiar with that?

[00:45:38] Jeff Vandrew: No. Talk to us about it. So, in some countries, I believe Japan is one of, I’ve never been to Japan, so I’m just going by things I’ve read here. I believe Japan is one of them, but there are. You can just get like what we would consider basic retail banking services, like your checking account and your debit card, right?

[00:45:54] Jeff Vandrew: You can just get that at the post office for free. So like you could get like a post office checking account and a post office debit card. So banks basically lose that business unless they’re providing some sort of enhanced or premium service above that very basic level of service. So that’s a, you know, this is the first thing I thought of when Phil was talking about how it hurts a portion of their business model and they’d have to start trying to offer other things to compete with the C B D C.

[00:46:21] Jeff Vandrew: That’s what I think it’s, I think it’s just like basically postal banking for the 21st century. Yeah.

[00:46:27] Preston Pysh: And when we talk about like, so what does the stablecoin bring? It brings immediate clearance for a lot of these exchanges that are doing these derivative products and all that kind of stuff. Like they need to have immediate settlement.

[00:46:39] Preston Pysh: You can’t do that with the legacy rails. That’s the whole reason the, the stablecoin, you know, market has just exploded. And when we look at a central bank digital currency, I think they’re from a Federal Reserve or any other central bank, they’re going to try to make the argument that, well, we’re just going to do what all these stablecoin are doing and then we’re still going to have control and we’re not outsourcing this to some private company to, to potentially have the funds or not have the funds in their treasury that are backing each one of these units that they’re issuing.

[00:47:09] Jeff Vandrew: And the surveillance aspect, right? That’s the thing. Then they’ll have perfect surveillance without having to rely on subpoenaing somebody else, which is the scary part.

[00:47:19] Preston Pysh: And that’s why we , you can’t find a single Bitcoin or that’s ever going to want a central bank digital currency for the surveillance aspect that comes with that immediately clearing token.

[00:47:30] Preston Pysh: But you know, like we said earlier, the banks might help prevent that from happening. And maybe the stable coins that are being issued or. I don’t know,

[00:47:38] Phil Geiger: but my, you know, Preston, you, you just touched on something like as soon as you start learning about Bitcoin and you understand, you know how Bitcoin isn’t controlled by anyone.

[00:47:46] Phil Geiger: There’s a fixed supply of 21 million. Here’s how the blockchain work. Here are your keys, like nothing that a central bank digital currency can offer you is going to be something that you’re interested in . Yeah. So as these banks are, you know, going to have to offer Bitcoin services alongside maybe their C B D C, people are getting educated and then they’re realizing, oh wait a minute.

[00:48:06] Phil Geiger: Like actually I don’t want the Central Bank digital currency. I just want to hold the keys to my Bitcoin. So yeah, it’s, I don’t know, I think it’s like a, the game theory of it I think is pretty funny and interesting.

[00:48:17] Preston Pysh: The thing that I think about, you know, and I know when you say the term hyper Bitcoin ization, it gets very theoretical.

[00:48:25] Preston Pysh: The thing that I think about with the stablecoin piece is, you know, you go back to like 1920s Germany and the prices were moving so quickly. That the physical paper just couldn’t even possibly keep up. And when I think about a, a potential scenario where, call it credit markets start melting down and you’re seeing prices constantly changing in stores and people were trying to pay with digital funds, like there needs to be some type of immediately clearing fiat currency to bridge that transition to a Bitcoin iced world where we have these 21 million units that are out there that are bringing calm instability to a, to a global economy that’s being totally wrecked by these policies.

[00:49:08] Preston Pysh: So like there needs to be something that allows that immediate settlement because as, as we trend more towards this, like the, the velocity of changing from the old system to the new system, I think is going to pick up pace. It’s not going to slow down. And I, I don’t know what the right solution is, but it’s, it’s very fascinating to see like all these like.

[00:49:31] Preston Pysh: Solutions for fiat to meet the speed of Bitcoin or to come try to step up to the same pace that bitcoin, the frequency that Bitcoin’s moving at. It’s just kind of fascinating. Sit here right at the, the tip of the edge of this thing and, and seeing everything materialized. I don’t know if you guys have any thoughts on any of that.

[00:49:49] Preston Pysh: I have a thought.

[00:49:50] Phil Geiger: Just this idea of stablecoin, I think is a really, it it’s a, it’s a misnomer in a lot of ways. There’s a lot of misnomers in Bitcoin and general crypto, but stablecoin for me is a really bad one because it’s like, we know as bitcoins, we know that the dollar is not stable. I mean, look at inflation this year.

[00:50:09] Phil Geiger: It’s double digits on a good month and. . And so the, the, the dollar itself is not stable. And then on top of that, these stable coins are issued by centralized parties, so you have to trust them and they’re the ones managing the issuance and they’re managing the actual dollars. So you’re actually adding a ton of counterparty risk on top of something that isn’t stable to begin with.

[00:50:32] Phil Geiger: Yeah. And then, and then you have these, these like defi crypto bros trying to do algorithmic stablecoin, . It might as well just be called a Turkey coin, right? Like at some point they just all are going to explode. And I think we can expect that honestly from all of the quote unquote stablecoin that exist today.

[00:50:50] Phil Geiger: I don’t think there’s a, a single stablecoin model that will survive indefinitely. So I just really caution people Yeah. To, to be careful with these stable coins. Like even the ones that look buttoned up today.

[00:51:05] Jeff Vandrew: Yeah. I dunno.

[00:51:06] Preston Pysh: Anybody who’s sitting on that. Yeah. You know, like what, what kind of risk that’s involved in that.

[00:51:12] Jeff Vandrew: I mean, FTX looked buttoned up like a month ago, right? , like the, the, the Miami Heat Basketball Arena had their logo on the roof.

[00:51:21] Preston Pysh: Right. It’s, it’s crazy. It’s crazy. Yeah. But I think the, the message for people listening to this is you’ve got a fractional reserve system that’s just, nobody has any clue how many units are there, and they’re constantly manipulating how many units are there.

[00:51:36] Preston Pysh: And you’re putting it against a system that is fully auditable at any moment in time. And it’s very easy to know whether somebody has, has what they say they have or that they don’t. It’s very, you can verify it very easily. These systems are very incompatible with each. and almost like you’re watching a race where you got two runners and they’ve gotta pass the baton, like we’re going from this old legacy system and the baton has to be passed over to this system that is just in stark contrast to the way that things have operated.

[00:52:09] Preston Pysh: And I just don’t know how that handoff is going to really necessarily materialize itself. But I do real, I, I, I fully believe that the handoff has to happen and it has to happen in some kind of way that, and I just hope that it’s, that it’s being constructed in a way that that minimizes the risk and the damage to the most amount of people limits the, the, the damage to the most amount of people as possible.

[00:52:32] Phil Geiger: Yeah. I think the first decade or the really the first kind of few havening cycles of Bitcoin, we saw a lot of financial companies founded that are essentially like copying and pasting the legacy financial system onto this new model, into this new paradigm now. You know, in the last few years, what we’re starting to see is more and more companies starting to understand Bitcoin and the protocol itself, and starting to use the tools that are baked into the money in order to create new types of service services that wouldn’t be possible with the dollar or with, you know, any other fiat currency.

[00:53:13] Phil Geiger: So when I s, when I hear of something like FTX or these crypto lenders that are going under, it’s like, well, they really just tried to copy and paste the legacy financial system onto something that they didn’t understand. There are companies out there that I think do understand the critical differences between Bitcoin and really any other currency, and that’s, that’s where the signal is amidst the noise.

[00:53:37] Preston Pysh: Guys, let’s go back to kind of close this out to the inheritance planning and retirement planning. What are the biggest mistakes that people make? In this, like if you could really kind of lay out, like you guys deal with people all day long, what are the biggest mistakes that you see?

[00:53:54] Jeff Vandrew: The most classic, and this is the this mistake.

[00:53:57] Jeff Vandrew: Like you could talk to a guy who’s been practicing in this area for 80 years and doesn’t know what Bitcoin is, and he would actually tell you, give you the same answer I’m about to give you right now, is people just assume they’re not going to die tomorrow. And as a result, like estate planning, getting your will, your trust, everything else, all those important documents squared away with your lawyer, it’s the easiest thing in the world to procrastinate, right?

[00:54:22] Jeff Vandrew: Yeah. Because it’s just not human nature to believe that we could die tomorrow, even if we all think that we’re going to die. Yeah, I’m going to die eventually, but not tomorrow. So I can put this off for an extra week. And unfortunately you don’t know when that day’s going to come, so it’s not at all a good idea to procrastinate on this stuff.

[00:54:41] Jeff Vandrew: Phil, I’m going to, yeah, I’m going to talk about private keys.

[00:54:45] Phil Geiger: So taking this a different direction, I’ve seen pretty much everything there is to see when it comes to people making mistakes with private keys. The first mistake is not writing down your seed phrase. You should always, always, always physically secure your seed phrase, the hardware wallet that is holding the seed phrase, it’s like a 50 to $150 device.

[00:55:11] Phil Geiger: It’s not a perfect device. The devices out there that are on the market right now are very good and they are secure, but we shouldn’t assume that they will last forever. Having a physical seed phrase gives you a lot of optionality. Now, if you’re just holding one seed phrase, and it’s a single signature wallet, don’t put that seed phrase on any sort of internet connected device.

[00:55:33] Phil Geiger: Don’t take a photo of it. Don’t save it in your cloud storage, keep it physical. A lot of people will maybe even stamp it into steel. There’s some trade-offs there. Steel is a very kind of conspicuous item compared to maybe a piece of paper that you can hide a little bit better with multi signature, which I think is really the best way to secure Bitcoin because it eliminates all single points of failure.

[00:55:55] Phil Geiger: The biggest mistake I see with Multisignature is using a passphrase with each key. So you, you have the ability to add your own word to your seed phrase, and that’s called a passphrase. The passphrase becomes a single point of failure. If you didn’t write your passphrase down correctly, you capitalized a letter wrong, you added, you know, a period or a space somewhere that you maybe forgot.

[00:56:20] Phil Geiger: You’re now holding a different key. So really we’re we’re, I would say, our own worst enemies when it comes to self custodys. I think multisignature with keys distributed isn’t very technical, isn’t very challenging. but it, and it has the most redundancy. So yeah, I think the, the biggest issues I see with, with self custody is just like people going crazy with passphrases and then either not writing their seed phrase down correctly or not understanding the importance of the seed phrase.

[00:56:50] Jeff Vandrew: The seed phrase is your key. The key lives on a device. The device helps you use the key to Phil’s point. Seed phrases have a fault tolerance because there’s a limited dictionary of words. So if you mis write the word a little bit on one of the words, you’re going to be okay. Like you’ll eventually figure out which one that was supposed to be.

[00:57:11] Jeff Vandrew: That’s not the case with a pass phrases that is not from a limited, that is a very low fault tolerance. You basically can’t mess that up at all. One of Phil’s guys, if I’m telling this story wrong, Phil, let me know. On the concierge team earlier this year, dealt with a client that I think with a passphrase couldn’t raise handwriting.

[00:57:30] Jeff Vandrew: Was that it? And luck. He really lucked out because I think one, one of the guys on the concierge team just happened to be able to read it or figure out what he meant. But, you know, that was very, very lucky. This guy would’ve lost a lot of Bitcoin had, had he not lucked out that way.

[00:57:47] Phil Geiger: I, I’ve seen one capital letter capitalization be the difference between zero Bitcoin and three digits worth of Bitcoin , like passphrase.

[00:57:58] Phil Geiger: I think Passphrases are nuclear technology. I, I personally wouldn’t recommend them. I would recommend Multisig, which does a better job of what we want our passphrase to do, which is eliminate the seed phrases, A single point of failure.

[00:58:13] Preston Pysh: Guys, this was awesome and this is, this is stuff that’s really, really important for people to go back and review and think about because everybody has their own setup, has their own solution in place, and just hearing about how.

[00:58:27] Preston Pysh: I don’t want to call anything foolproof, but this, this is an amazing way to go about this and to think about it and at a time like what we just saw in the amount of people’s lives that just got wrecked because of the trust in exchanges and just really not understanding what it is that they, they actually possess and handle.

[00:58:47] Preston Pysh: It’s a good time to recage and reset. So I thank you guys for making the time to come on and talk about this really important stuff. Any, anything you guys want to highlight or point people towards?

[00:58:58] Jeff Vandrew: Thanks for having us on. I will let Phil do the shilling part of the evening because he’s the best. Phil is the best guy at Shilling Bitcoin.

[00:59:05] Jeff Vandrew: I think I know . Go ahead. Take it away.

[00:59:07] Phil Geiger: Phil, you’re referring to Shill Geiger, I assume? Yeah, so I’m Phil Geiger. Phil unchain.com is my email. Phil Geiger on Twitter. Yeah, come. Come reach out. Reach out to Unchained We, we can help you really across the board with your Bitcoin financial services. So starting from this foundation of Multisignature collaborative custody, you have as many keys as possible for the service you’re taking.

[00:59:31] Phil Geiger: We help you in these different contacts, personal retirement, business. You can use your Bitcoin as collateral for a loan. You can buy Bitcoin from us. You can set up your Bitcoin in an IRA. Remember that old 401k you forgot about. You can turn that all into Bitcoin, and that’s what we’re here for. We have this new inheritance protocol that we just released because while maybe our competitors are in bankruptcy, unfortunately, or are adding support for other cryptos, we’re thinking about how to secure your Bitcoin dynasty for generations.

[01:00:01] Preston Pysh: Gents, thanks for the awesome interview,

[01:00:04] Jeff Vandrew: Reston, thanks for having us. Have a good night everyone.

[01:00:07] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for, we study billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular listener if you enjoyed the show or you learned something new or you found it valuable.

[01:00:24] Preston Pysh: If you can leave a review, we would really appreciate that and it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening and I’ll catch you again next week.

[01:00:40] Outro: Thank you for listening to TIP.

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