Building my own HODL service for lazy friends/family

Zoomic

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Quote from: HighHash on September 21, 2023, 08:33:22 AM

Over the past few years I've slowly "orange-pilled" a number of family/friends.
I've tried my hardest to get them to purchase hardware wallets to securely store their BTC.
For some, this is far too complicated/they are too lazy to do it themselves.
So, I took it upon myself to secure it for them.

This makes me wonder how many people are out there that would pay for a service like this.
Does anyone have experience with creating a business around this idea?

This is a very good project and it is solving a problem which is why I like it. But there is an issue with this, the main issue is that we are in a trustless industry and no one will be able to trust you with their private keys to buy and hold BTC on their behalf.
As hugeblack has said, Mixin is already in the forum with a similar idea but recently they have been hacked which I didn't expect will happen to them because of the alleged security of the mixin safe.
Op, if you are still interested in your project, you may want to refine the idea to escape competition.

hugeblack

legendary

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Quote from: HighHash on September 21, 2023, 08:33:22 AM

A custodial service is one thing but could this evolve into more of a hedge fund structure where management fees/performance fees are generated?
Any advice or ideas are appreciated, especially with this being my first post Grin

One example of why such ideas are bad is ----> Mixin Network hacked - $200 Million lost

Mixin is Convenient and Decentralized Multisig + MPC + Timelock^[1] produces a 2-of-3 multisig, with a 90 days timelock for the RECOVERY key
However, they were hacked and stated that Mixin Network's cloud database has been attacked^[2] resulting in the loss of several mainnet assets.

any solutions you provide that are not based on the Bitcoin layer 1 network, will be centralized and capable of being hacked and unlocked at some point.

[1] https://bitcointalksearch.org/topic/mixin-safe-a-convenient-and-decentralized-multisig-mpc-timelock-solution-5459401
[2] https://bitcointalksearch.org/topic/mixin-network-hacked-200-million-lost-5467994

Yamane_Keto

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Quote from: avp2306 on September 24, 2023, 09:44:09 AM

I remember what yogg do on this community and we don't want another incident like that will happen again.

Not only that, but it is blind trust, if you are scammed, then trying to recover the money will be a headache, not to mention that there is no escrow for the money like banks doing, and there are other better decentralized and reduce risks options, there is no need to trust a third party.

If you get your money back, you have missed a missed opportunity, as you will mostly get your money back in dollars instead of investing it now in Bitcoin, and its value will be less.

avp2306

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Not a good idea and who would trust your service? Even reputable people can scam people when dealing huge amount of money, so chances that this incident will happen is so high especially that you don't have reputation or credibility for offering such service.

I remember what yogg do on this community and we don't want another incident like that will happen again.

Pmalek

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We can't say that custodial services don't work because there are still many people that rely on exchanges and custodial wallets since they don't want the responsibility of holding their own keys. That's their decision, and they will have to face the consequences if/when something goes wrong.

If I were interested in having a custodian for my bitcoins, I don't know why I would pick you and not any of the other big brands out there. Nothing personal against you, it's just that you are competing against other market giants and you are one individual. Nothing makes you better than the competition.

You might be honest and not have any ulterior motives, like wanting to exit scam or steal the coins, but things could still go wrong. Your keys could be hacked, which effectively means you lost the crypto of everyone that trusted you. What are you going to do then? I see it as a dangerous business I wouldn't personally want to run nor would I participate in it by giving anyone my coins.

pinggoki

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Quote from: Kakmakr on September 22, 2023, 01:40:13 PM

I have seen people who sold "metal" engraved paper wallets and/or Casascius coins, which is physical bitcoins with a stored private key that are generated by a computer...seemingly without the creator knowing what the Private key is that are generated. Roll Eyes

I prefer to do everything myself and not to trust anyone else with my Private key.... but I will help family members if they want me to help them. I will not sell my services, because people will blame me if something goes wrong and the private key are hacked. Wink

Me too and with the Yogg incident, I think that it's time to rethink on how we approach our way of storing bitcoins because if I am being honest, we've been far too complacent about how we store our bitcoins that we forgot that we should be involved in every step of the way. With this service, even if they're a family member, I don't think that I would trust them with these service because when greed comes in the way, family or blood relations don't matter much.

Kakmakr

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I have seen people who sold "metal" engraved paper wallets and/or Casascius coins, which is physical bitcoins with a stored private key that are generated by a computer...seemingly without the creator knowing what the Private key is that are generated. Roll Eyes

I prefer to do everything myself and not to trust anyone else with my Private key.... but I will help family members if they want me to help them. I will not sell my services, because people will blame me if something goes wrong and the private key are hacked. Wink

ABCbits

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Crypto Swap Exchange

I'm not interested with your idea. But even i were a lazy person, i would expect custodial service at least properly registered on correct category and have insurance (in case your went bankrupt or your service got hacked). Could you fulfill that?

Quote from: HighHash on September 21, 2023, 09:12:48 AM

I just don't know the legalities of building a business around that.

That would be difficult since you need to check laws on country where your service is available. At very least, i know custodial cryptocurrency service usually can categorized as money transmitter.

BitcoinGirl.Club

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Quote from: HighHash on September 21, 2023, 08:33:22 AM

Over the past few years I've slowly "orange-pilled" a number of family/friends.
I've tried my hardest to get them to purchase hardware wallets to securely store their BTC.
For some, this is far too complicated/they are too lazy to do it themselves.
So, I took it upon myself to secure it for them.

This makes me wonder how many people are out there that would pay for a service like this.
Does anyone have experience with creating a business around this idea?
A custodial service is one thing but could this evolve into more of a hedge fund structure where management fees/performance fees are generated?
Any advice or ideas are appreciated, especially with this being my first post Grin

I think we already have a service the way you are thinking. They had a review campaign not very long ago and they had over 100 members in the review campaign. Next time when I will see the service I will try to update the post.

Quote from: Yamane_Keto on September 21, 2023, 09:53:32 PM

The idea is contradictory to Bitcoin and be your own bank, as they trust you as if they were the bank's customers.

A n-of-m multi-Sig wallet where one key to a business or service providers and all other keys are between the family members may give a solution. The members can sign their own keys to move the fund but if one member does not agree or anything happen to them then the rest of the members can reach out to the service provider and show their reasons to get the transaction singed by the service.

Yamane_Keto

hero member

Activity: 406

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The idea is contradictory to Bitcoin and be your own bank, as they trust you as if they were the bank's customers. The only difference is that the bank guarantees the money if it is stolen, and there are institutions that compensate customers' deposits up to a certain amount. Are you ready to guarantee their currencies and how will you do that if you make a mistake and it is stolen?
If they are not prepared to keep their private keys, Bitcoin may not be an ideal idea for them, or if they want to think of Bitcoin as an investment, they should wait until banks in your country offer deposits in Bitcoin.

There are services that provide encryption for wallet seed (Ledger Recover) so that the encryption is split between several trusted people, and it may be an option for those who do not have a safe place to store seeds, but again, do not trust anyone to store your coins.

suzanne5223

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Quote from: HighHash on September 21, 2023, 08:33:22 AM

Over the past few years I've slowly "orange-pilled" a number of family/friends.
I've tried my hardest to get them to purchase hardware wallets to securely store their BTC.
For some, this is far too complicated/they are too lazy to do it themselves.
So, I took it upon myself to secure it for them.

You do the right thing by putting your friends and family through Bitcoin investment and acquiring of hardware wallet in order for them to follow the "Not your keys, not your coin" advice.
To avoid future complications which could also lead to misconception, no matter how knowledgeable you are in crypto never hold or take custody of another person's BTC investment if it's not about escrow service.

Quote from: HighHash on September 21, 2023, 08:33:22 AM

This makes me wonder how many people are out there that would pay for a service like this.
Does anyone have experience with creating a business around this idea?

I don't have the experience of creating a business around the idea but that's the exact service offered by GrayScale.

Faisal2202

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Quote from: HighHash on September 21, 2023, 09:12:48 AM

Appreciate the responses above!
I think I would be able to compete with bigger companies (at least compete for the few folks I initially sell to) in this area because I provide the trust of a friend and the presence of an actual person doing the work.
My friends have already openly said they would pay me for securing it for them.
But you are right, the ultimate goal is to teach individuals to hold their own keys. For those that won't right now though, I want to provide that service for them.
I just don't know the legalities of building a business around that.
Maybe the end goal is an educational service that charges a fee, then this fee is used to buy Bitcoin for that individual.

You definitely have some problem-solving mind, and I really liked the idea and your spirit too. But don't you think it will hurt the purpose of what BTC is promoting? Which is to make them responsible for their money. By making them secure their funds on their own. Because who will have the key will have access to the funds. Simple as that, but still they have to follow some norms if they want to stay safe from hacks and scams.

And what if you lost keys to the funds of your family or friends funds, then you have to return their funds from your own pocket? I hope you have some good experience in holding funds. And not holding them in some hot wallet. Just like the CoinEX exchange or any other exchange or platform that just lost their funds due to the vulnerability in their systems.

But still, you are doing expensive and risky work, so you should charge them as well.

HighHash

newbie

Activity: 3

Merit: 1

Appreciate the responses above!
I think I would be able to compete with bigger companies (at least compete for the few folks I initially sell to) in this area because I provide the trust of a friend and the presence of an actual person doing the work.
My friends have already openly said they would pay me for securing it for them.
But you are right, the ultimate goal is to teach individuals to hold their own keys. For those that won't right now though, I want to provide that service for them.
I just don't know the legalities of building a business around that.
Maybe the end goal is an educational service that charges a fee, then this fee is used to buy Bitcoin for that individual.

Eternad

hero member

Activity: 1400

Merit: 623

Quote from: HighHash on September 21, 2023, 08:33:22 AM

Does anyone have experience with creating a business around this idea?
A custodial service is one thing but could this evolve into more of a hedge fund structure where management fees/performance fees are generated?
Any advice or ideas are appreciated, especially with this being my first post Grin

You are competing with banks and other giant financial services with this kind of idea. Trust is your number 1 enemy here so you will find a hard time to strive on this business.

Smart contract or timelock service will help you to clear doubts on your service since this is automated holding process but still your problem will be the point I mention above which is the competition and anyone can literally hold their asset on a hardware or software wallet without availing this kind of service.

apogio

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Activity: 560

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Hi.

As far as the service is concerned:

I don't really think a lot of people would pay for that. There are multiple reasons behind this. But let's start with the basic question: Why pay for a custodial service when they can have the BTC on exchanges for free? I don't say it's good, but it's a rational question.

As bitcoiners, we don't like custodial services. Instead people should be advised to own their keys.

As far as your family is concerned:

Quote

they are too lazy to do it themselves.

Do it for them.
You can make use of BIP85 (https://bip85.com/). You can have the super high custody of the main seed phrase and allow your relatives to own their own seed phrases that derive from yours. So, they can feel comfortable since you can be their backup, provided of course that you are responsible and capable of following the necessary security standars. But again, doing it as a service for other people seems like a bad idea to me.

HighHash

newbie

Activity: 3

Merit: 1

Over the past few years I've slowly "orange-pilled" a number of family/friends.
I've tried my hardest to get them to purchase hardware wallets to securely store their BTC.
For some, this is far too complicated/they are too lazy to do it themselves.
So, I took it upon myself to secure it for them.

This makes me wonder how many people are out there that would pay for a service like this.
Does anyone have experience with creating a business around this idea?
A custodial service is one thing but could this evolve into more of a hedge fund structure where management fees/performance fees are generated?
Any advice or ideas are appreciated, especially with this being my first post Grin

Topic: Building my own HODL service for lazy friends/family (Read 228 times)