As the Roman Empire continued into its demise and inevtible collapse, so the currency was continually debased with ever more quanties of nickel. The chart below shows the silver content of the Denarious coins all the way up to the end of the Roman Empire in 268 AD. The result of the debasement resulted in a larger money supply, but the money was worth less. This results in higher inflation as time goes on. This can be seen that a typical soldier was paid 300% more in the latter years of the Roman Empire compared to the earlier years.

It look 204 years for the silver content to be completely eradicated from the Denarious.

As the coins were debased so the colouration of the coins also changed. This result in the populous hoarding the coins with a higher silver content and spending the coins with the lower silver content. This is known as Gresham's law, where with a simplistic explanation, explains that bad money drives out good money. Good money is hoarded and bad money is spent.

The same thing is happening with the U.S. dollar at the moment, as the U.S. Government has printed trillions of dollars in recent years. This increase in money supply means that there is more money chasing the same amount of goods and services which causes prices to rise, commonly known as inflation. The U.S. Government is borroring roughly $1trn a year in order to fund their bloated government, this increased debt is also increasing the money supply, which flows into the rest of the economy as the money is spent, also contributing to inflation.

The monetary unit of the Roman Empire empire took over 200 years to completely collapse. How long this takes for the U.S. Dollar to follow the path of the Denarious is anyone's guess? Given the speed of technology today, and the extremely free flowing ability of capital, it seems like this will be a lot sooner than expected.

This is why Bitcoin has every chance of becoming the world's next global reserve currency. It's supply is limited to 21m units (each unit divisble by 100m times). Sound money, means a sound economy, and bitcoin promises all of these characteristics.

Then there are those who have fallen for phishing scams or lost coins to exchange hacks.

“Exchanges are not a safe place to store your bitcoin,” says Andrew Field, co-founder of BitDirect, which has developed a pioneering method of securely storing BTC.

“There are way too many examples of exchanges being compromised, going back to the infamous 2014 hack of Mt Gox, which at one time accounted for 70% of all BTC transactions in the world. But there have been dozens of similar security breaches since then.”

BitDirect is a South African solution to a global problem. It allows investors to manage their cryptocurrency investments in some familiar and not-so-familiar ways. One of the innovations is ‘shared custody’, where the owner and an advisor (or nominated person) can share custody over the digital keys needed to transact or transfer BTC. This does not mean that the advisor can run off with the BTC, as multiple signatures (known as a 2-of-3 multi-sig) are needed before any movement can occur.

Another innovation is the ability for advisors to customise BTC management fees for each client, which are charged at an annual percentage rate, paid in BTC, and accrued daily. This potentially opens a huge market for advisors to earn recurring income through shared custody services. It’s not only advisors who can earn these fees.

“Anyone who wants to act as an advisor and manage an additional backup private key on behalf of friends and family [can do so],” says Field.

To onboard, you need to register first as an advisor at BitDirect, where you will be asked for your name, email, and phone number. You will need to buy a hardware wallet such as Trezor or Ledger and then register that device with BitDirect and enable two-factor authentication (requiring you to enter a time-sensitive code delivered to your cellphone) before gaining access to your wallet. A BitDirect wallet is automatically created once the registration link has been sent to the customer and they have registered their hardware device.

BitDirect is the product of two years of research and development by Field and co-founder Oliver Shepherd.

Field is a former investment banker with HSBC in London, where he was involved in converting European clients from manual to electronic trading systems. He first bought BTC in 2013 when it was priced at around $400, and that’s when the lights went on.

“I started to study BTC, and it dawned on me that this was the future of money. But I also realised there were serious security concerns around the custody and movement of BTC, and that was when we decided to come up with a solution that would solve these issues in a way that we believe is a world first.”

One benefit of BitDirect is the ability to move BTC via a third-party wallet provider, such as Electrum, without any direct involvement from BitDirect.

If something were to happen to BitDirect, the advisor and the client hold two of three keys and so have access to the funds via Electrum. BitDirect only holds a single key, so it never has direct access to client funds.

“One of the most remarkable aspects of the platform is that investors can log in to BitDirect and restore a new hardware device if they lose their hardware wallet and seed phrase (a 12- or 24-word phrase required to access a digital wallet). BitDirect and the investor’s advisor will co-sign a transaction to move the funds to a new hardware device, ensuring that investors never lose their BTC,” adds Field.

“We recognised a global problem and need for a secure and reliable storage solution that could protect investors’ funds from the countless scams, exchange hacks, confiscation and freezing of funds that are taking place more and more frequently in the cryptocurrency industry.

“We launched this product at a time when the need for secure BTC storage is more critical than ever. With the collapse of crypto exchanges like FTX, where many investors lost their money as their cryptocurrency could not be attributed to them, we see BitDirect as a game-changer for the South African financial and tech markets.”

Unlike other storage solutions, advisors can’t enter a third-party address to send clients’ funds elsewhere. The advisor can only approve or deny transactions, process fees, and help restore a new hardware device with BitDirect in the event of a loss, explains Shepherd.

Additionally, investors can move their funds through the BitDirect platform, and their nominated person will co-sign the transaction. BitDirect will co-sign the transaction to transfer the funds to either an external wallet or a new advisor if the nominated person loses access to the hardware device and recovery seed.

Many people are reluctant to invest in cryptocurrencies because they do not understand the technology or fear the security aspects of ownership.

“That’s why we’ve created a platform that is easy to use and easily accessible to everyone. We want to empower South Africans to take advantage of this technology and all the advantages that come with it,” adds Field.

The benefits for the client are as follows:

Losing hardware device and recovery seed:

If the client loses their hardware device, BitDirect and the trusted third party can restore a new device for them.

An additional layer of security applied to the recovery seed:

In the event that someone finds the recovery seed, the funds are still secure because an additional key is needed to sign the transaction. This additional key is provided by either BitDirect or the trusted third party.

Dual signing of the transaction provides an extra layer of security:

There is a second set of eyes on each transaction, preventing the client from potentially making a mistake. This also prevents a $5 wrench attack where someone is trying to force the client to give up their bitcoin.

All funds are stored on-chain that can be verified:

With exchanges, clients cannot view their bitcoin on the blockchain. Bitcoin on exchanges is all stored in a bucket account and not directly attributed to each user on the blockchain.

Distributed security:

As each entity holds a single key, there is no method for a single party to move or misappropriate the funds.

Inheritance planning:

BitDirect will work with the trusted third party in an inheritance planning scenario to get the bitcoin to the rightful beneficiaries.

The “City Owners” could set themselves up as advisors on the BitDirect platform and add any new potential inhabitants as clients. They could then require each inhabitant to deposit a specified amount of bitcoin into the multisignature wallet to live in the town or city. The “City Owners” could add a requirement that a certain percentage of the bitcoin in the multisignature wallet be deducted for expenses related to living in the city.

The City Owners would then offer various traditional city services funded by the levy charged to each inhabitant. This could allow for a multitude of these types of cities to be built, all with the most innovative infrastructure available. Competition would result between these cities, where certain cities might offer free healthcare, and others might offer free transportation.

Inhabitants would be able to evaluate each city on its own merits and be free to move between each city with the best offering. There could be a scenario where cities are tailored to each demographic, depending on what stage of life they are at. As your circumstances change, like having children compared to a fresh graduate or an elderly person, you could change cities to fit your changing requirements.

Cities for the Elderly might have free healthcare, while younger cities might have more of a focus on restaurants, bars, and coffee shops.

People could open a “menu” of potentially thousands of cities worldwide and decide where they want to live based on the deposit, annual levy, and services on offer. There might be quite a transient existence where younger people could choose to live in 2 or 3 cities in one year, while the older population might be more sedentary.

The advantage of this model is that the principal amount deposited to live in the city is transparent to all parties, and the inhabitant remains in control of their funds should they decide to move. It is assumed that bitcoin will increase in value over time, and in response, the City Owners might decide to reduce the deposit amount or the annual levy. Inhabitants would still get the value of the price appreciation of their bitcoin deposit.

Globally, there is an overwhelming feeling that taxpayers are not receiving nearly enough benefit from government for the tax they pay. Bitcoin’s main characteristic is decentralization, and it is felt that how tax revenue is spent should also be attributed to the localities where the tax is paid. People want to see more value in their neighborhoods and their own lives, rather than costly bureaucratic government programs that are hugely wasteful.

The profit-driven nature of the city will result in cities becoming far more efficient. Monopolistic tendencies where City Owners hike prices and exploit inhabitants won’t exist due to competition from neighboring cities. People have the freedom to move if they do not like the pricing or services on offer.

The past decades have resulted in mass-migration of people from rural areas into cities. Cities and their surrounding areas need to evolve to consider the quasi-remote working culture, where people might need to visit major hubs on a far more sporadic basis.

A bitcoin multisignature wallet, also known as a multi-sig wallet, is a type of bitcoin wallet that requires the approval of multiple parties before any transactions can be made. A multi-signature wallet is a type of wallet that is built into the Bitcoin protocol. In a multisignature setup, multiple private keys are required to move funds, instead of just one as in a standard bitcoin wallet. With BitDirect the private keys are stored on a hardware device (either a Trezor or a Ledger).

The multisignature setup provides an additional layer of security for the bitcoin wallet, as it reduces the risk of theft or fraud. A multisig wallet also provides an additional layer of security to the recovery seed of the hardware device. If the seed is found by a nefarious actor, an additional signatory is required to move the funds, so the funds remain secure. It also reduces the risk of a single point of failure, as multiple parties must approve any transactions. In addition, multisignature wallets can provide increased privacy for clients, as the approval of multiple parties is required to move funds.

Multisignature wallets can be set up with various combinations of keys, depending on the level of security and flexibility desired. For example, the BitDirect 2-of-3 multisignature wallet requires the approval of two out of three parties before any funds can be moved. This is set up with the client holding one key, a financial advisor or trusted third party holding another key, and BitDirect holding the third key.

One of the main benefits of using a multisignature wallet is increased security. With a traditional single-signature wallet, the private key is stored on the client's device or on a third-party server, and anyone with access to that key can move the funds. This makes it easier for hackers or thieves to steal the funds, as they only need to gain access to a single key.

In contrast, with a multisignature wallet, multiple private keys are required to move funds, making it much more difficult for any one party to access the funds without authorization. This reduces the risk of theft or fraud, and provides greater peace of mind for the client.

Another benefit of multisignature wallets is increased privacy. With a single-signature wallet, all transactions are associated with a single key, making it easier to track the movement of funds. With a multisignature wallet, however, transactions require the approval of multiple parties, making it more difficult to track the movement of funds and providing greater privacy for the client.

In addition to increased security and privacy, multisignature wallets also offer greater flexibility. For example, with the BitDirect 2-of-3 multisignature wallet, the client can retain control of one key, while entrusting another key to a trusted financial advisor or third party. This provides an additional layer of security, while also allowing for more convenient and flexible management of the funds.

Multisignature wallets are a more secure and reliable option for storing bitcoin, especially for high-value holdings. They can help protect against theft, fraud, and government seizure, and offer increased peace of mind for clients. By requiring the approval of multiple parties, multisignature wallets provide an additional layer of security and privacy, while also offering greater flexibility and convenience for managing the funds.

Check their credentials

Before entrusting a financial advisor with your bitcoin key, it is important to check their credentials. Look for an advisor who is registered with a reputable regulatory organization. You can also check the advisor's credentials with professional organizations within your country. Check the advisor's track record and experience with managing Bitcoin investments.

Consider their expertise in cryptocurrency

Bitcoin is a relatively new investment area, and not all financial advisors are knowledgeable about it. Look for an advisor who has experience in managing Bitcoin investments, and who can demonstrate a good understanding of the technology behind it. This will ensure that your advisor is well-equipped to help manage your bitcoin holdings.

Research the financial advisor's reputation before entrusting them with your bitcoin key. Check online reviews and ratings, and look for any red flags or negative comments. You can also check with the regulatory organization to ensure that there are no disciplinary actions against the advisor.

Ask for references

This can be a difficult task to undertake as people are generally very private about their financial affairs and who looks after their investments. If they are happy with it, ask the financial advisor for references from other clients who have entrusted them with managing their bitcoin investments. Contact these references and ask about their experience with the advisor. This will give you a better sense of the advisor's track record and reputation.

Discuss their security measures

When entrusting a financial advisor with one of the keys to your bitcoin multisignature wallet, it is important to ensure that they have adequate security measures in place. Discuss their security protocols, including how they store and access the key, and how they protect against cyber attacks and theft.

Understand their fees

Financial advisors typically charge a fee for their services, and it is important to understand these fees before entrusting them with your bitcoin key. Look for an advisor who is transparent about their fees, and who charges a reasonable rate for their services.

Consider their communication style

Communication is key when working with a financial advisor. Look for an advisor who is responsive and easy to communicate with, and who is willing to provide regular updates on your bitcoin holdings. Additionally, consider their communication style, and whether it aligns with your own preferences. Discuss the protocol for approving transactions, is this done via Voice, Instant Messenger or Email? Our preference is that every transaction is verified via telephone before the advisor approves the transaction.

Evaluate their overall fit

Ultimately, choosing the right financial advisor to hold your bitcoin key comes down to finding someone who is a good fit for your individual needs and preferences. Consider factors such as their location, availability, and level of service, and choose an advisor who you feel comfortable working with. In conclusion, entrusting a financial advisor with one of the keys to your bitcoin multisignature wallet can provide an additional layer of security for your bitcoin holdings. However, it is important to choose the right advisor for the job. By following these tips, you can ensure that you find a qualified and trustworthy financial advisor who is well-equipped to help manage your bitcoin investment.

The risks associated with storing your Bitcoin on an exchange are as follows:

Hacking of exchanges

There have been countless exchange hacks since Bitcoin's inception. Despite exchanges operating best practices in storing client's Bitcoin, these exchange hacks continue on a monthly basis. There seems to be no end in sight for the continued threat that hackers pose to client funds. At the time of writing, there have been 57 known exchange hacks, with the most recent being last month.

Phishing attacks

This is one of the most relevant attacks that we have encountered in Bitcoin, and we hear of people on a weekly basis who have had their accounts cleaned out due to a phishing attack. The most common form of this attack is that people receive a spam email that looks like it comes from the exchange where the user stores their Bitcoin. The link within this email takes the user to a fictitious site, usually a URL that looks very similar to the exchange URL, but this site is controlled by the fraudsters. After entering their login details and two-factor information to the fictitious site, the fraudsters' application uses that information to enter directly into the exchange and drain the user's account. A big misconception is that two-factor authentication prevents this, but that is not the case. The attackers' application takes the user's 2FA information and immediately inserts it into the exchange application before the code expires.

Exchange insolvency

There is a very big misconception that people have that if an exchange goes into liquidation, their Bitcoin is segregated from other creditors of the exchange. This is not the case. As a client of the exchange, the user is merely an unsecured creditor of the exchange. It is effectively an IOU from the exchange to the user. In the case of insolvency, all users' deposits would be grouped with the other creditors, and it is unlikely that the user will get all of their Bitcoin back. There are many exchanges that could be in financial difficulty, and due to the fact that they may not need to publish their financial information as they are private companies, there could be shortfalls on those companies' balance sheets.

Exchange fraud

Exchanges can be very opaque on how they handle customers' funds. The most notable example of this was the recent bankruptcy of FTX, which was using customer funds to make loans to other crypto businesses. In this instance, when the fraud is unveiled, the exchange goes into insolvency, and the abovementioned process is followed.

Regulatory risks

As users are not in control of their own keys, the exchange can freeze the user's account for any reason. Many of the exchanges take the viewpoint of the user being guilty until proven innocent. One of the most notable instances of this was due to the rising conflict between Russia and Ukraine, where Coinbase instantly froze the accounts of 25,000 Russian clients.

When a user relies on an exchange to store their bitcoins, they are not in control of the private keys associated with their bitcoins. In the bitcoin world, there is a saying that goes, “Not your keys, not your bitcoin.” Exchanges operate a bucket account policy where everyone's bitcoins are lumped into a single bucket, and the user only sees a representation of their bitcoins on their mobile device or laptop.

To check if you are in control of your keys, you can enter your bitcoin address into a block explorer. If you do not see your Bitcoin balance there, it means you are not in control of your keys. With BitDirect, you can enter any of your bitcoin addresses into a block explorer, and you will see your bitcoins directly attributed to your own unique address on the blockchain.

Many people know very little about how Bitcoin actually works. While most people understand the principle of the “old school” dongle that traditional banks have used, they do not know how this applies to Bitcoin. The advisor can talk them through the process, as well as explain what their recovery seed is, how it works, and how they can keep it safe.

Co-signing of Transactions for Approval

This involves your time, and depending on the frequency with which each customer wishes to withdraw Bitcoin, the rate at which you charge the customer will vary. Certain advisors might wish to offer exceptional customer service, or have clients that demand their Bitcoin in minutes rather than hours, so they may charge higher fees for this service. Some clients could be deemed as hodlers (they are holders for the long term) and if they decide to sell, they’d be happy for the Bitcoin to be transferred within 24 hours.

Buy and Sell Bitcoin on Behalf of the Customer

This is an additional service that can be offered by the advisor outside of the Bitcoin platform. Exchanges offer corporate accounts, and this facility could be used to buy or sell Bitcoin on behalf of the client if the client finds the concept of an exchange all too daunting or they do not have the time or inclination to do it themselves. This is the time that an advisor will be a custodian of the client’s Bitcoin as well as trading on behalf of the customer, so regulations might exist in the advisor’s jurisdiction, and this is up to each advisor to resolve. A way around the custodial issues mentioned above is if an advisor assists a client with setting up their own account on the local exchange, and they are responsible for transferring the Bitcoin to their wallet. In this instance, the advisor is not in control of the client’s Bitcoin at any time.

Estate Planning

In the event of the client’s death, their Bitcoin will need to be distributed to the heirs. If the client has given access to their account and hardware device to any third party that can act on their behalf with their advisor, the advisor and BitDirect will need to execute a transaction to transfer the Bitcoin to the heirs. The approval for this process will only be executed once BitDirect has been serviced with all the required legal documentation from the executor of the estate, as well as confirmation from the advisor that the client is deceased. There are further confidential internal security checks that will be conducted by BitDirect. This process will involve the advisor’s time, which justifies fees being charged.

Restoring Lost Device and Recovery Seed

The advisor should institute multiple layers of verification that ensure they are dealing with the customer when a request for a new hardware device has been received. This may constitute a face-to-face meeting, video chat, verification through secure messaging apps like Telegram & Signal. The advisor might want to institute various technical security improvements on their systems to verify your identity. All of these are a cost to the advisor.

Education

The advisor could be extremely knowledgeable about the Bitcoin space and provide a service to customers about market trends, regulation changes, and all things technical that the customer might want to discuss with the advisor. This could be done through email newsletters, blog posts, face-to-face or over the phone. People like a trusted source of information and not just generic information from the internet. This is a value-added service that the customer will be prepared to pay for.

Portfolio management

The advisor could be in a position to understand the complete composition of a client’s financial portfolio, which involves a lot of analysis to determine the client’s ideal exposure to bitcoin. Time is spent analyzing the holistic makeup of each customer’s affairs. The advisor might want to decide to start taking their fees from the bitcoin portion of the portfolio rather than the fiat portion of the portfolio.

Regulation

There could be various regulatory requirements that the advisor might be required to abide by, depending on the laws of the local jurisdiction. This often involves licenses, compliance staff, and reporting requirements, which all add to the cost of the overall service.

Future services

BitDirect has a roadmap of future services that advisors can perform to support their clients. These could include things like tax preparation and planning, succession planning, and insurance services. As the Bitcoin and cryptocurrency landscape continues to evolve, there will be new opportunities for advisors to provide value to their clients and justify their fees.