The Week Before FTX

James had been in Bitcoin since 2019. He’d kept most of his holdings on FTX because the interface was clean, the fees were low, and the platform felt institutional and trustworthy.

In October 2022, he’d been reading about self-custody. Not because he suspected anything — FTX seemed as solid as any platform in the space. He’d just reached the part of his Bitcoin education where the argument for hardware wallets made obvious sense. He ordered a Trezor, set it up over a weekend, and moved his Bitcoin off FTX.

On November 8, 2022, FTX paused withdrawals.

James watched the news with a feeling he struggled to describe. Not relief exactly. Something closer to a quiet, unsettling recognition that the thing everyone said couldn’t happen had happened — again — and that the week of friction involved in setting up a hardware wallet was the only thing standing between him and years of legal proceedings to recover funds that might never fully come back.

He hadn’t predicted FTX’s collapse. Nobody he knew had. He’d just read the arguments for self-custody, found them convincing, and acted on them before he needed to.

That’s how Bitcoin security works at its best. Not because disaster is imminent — most of the time it isn’t. But because the cost of protection is small and the cost of not being protected, in the scenarios where it matters, is total.

The people who lost funds in FTX weren’t careless. They were unlucky. The people who didn’t lose funds weren’t psychic. They’d just done the reading.

Tomorrow: the week in review — why self-custody and what it takes.

— The Daily Bit