The Taihuttu family of five from the Netherlands can be said to be the strongest believers in Bitcoin (BTC). In 2017, they reached a consensus and decided to sell all their belongings to buy Bitcoin, including a 2,500-square-foot property and a profitable company. Since then, they have lived a nomadic life and are also known as the "Bitcoin family."
Due to the recent significant increase in kidnapping and ransom cases targeting cryptocurrency executives and wealthy holders, they recently shared in an exclusive interview with CNBC that their family has completely reorganized its asset security strategy and stored encrypted private keys in four continents around the world.
Seed phrase decentralized global physical storage
A number of recent incidents in France, including the kidnapping and injury of the father of a senior executive of a cryptocurrency company, and the violent robbery and ransom demand at home of the co-founders of the cryptocurrency hardware wallet company Ledger, have brought the security of crypto assets into the spotlight.
In the face of this wave of attacks, Didi Taihuttu made it clear in an interview:
We changed everything. Even if someone pointed a gun at me, they couldn't give me more than what was in my wallet on my phone. That wasn't much.
Their core security upgrade strategy is to physically segment and disperse the seed seed phrase of their encrypted wallets. (The seed phrase is usually composed of 24 words, allowing users to regain control of their cryptocurrency wallets when they lose their devices or forget their passwords.)
Didi Taihuttu said they split the 24 words into four groups, each containing six words, and then hid the phrases in secret physical locations in different places on four continents around the world.
Even if you find most of the words, you won't be able to access our complete assets without all of them.
To ensure the durability and security of these seed phrase, some phrases are hand-engraved on special fire-resistant steel plates. Taihuttu himself uses a hammer and metal punch tool to knock the letters one by one onto these steel plates, which are then carefully hidden. In addition to the physical steel plates, another part of the seed words are digitally stored through a dedicated blockchain encryption service, adding another layer of protection.
To further increase the difficulty of cracking, the Taihuttu family also performs additional encryption on some stored words, such as replacing some words or using codes, which makes it difficult for attackers to piece together the original seed words even if they obtain part of the phrase.
He believes that over-reliance on a single hardware device may become a source of risk, especially in the face of physical coercion. Therefore, they chose a more thorough decentralized storage solution, transferring trust from a single device to a carefully designed, multi-layered geographically decentralized system.
Digital defense upgrade: from multi-signature to multi-party computing
In addition to reforms at the physical storage level, the "Bitcoin family" has also strengthened the protection of its digital assets.
For the "hot wallets" that are connected to the Internet and required for daily transactions, they use a multi-signature protocol for protection. (Multi-signature technology requires that a transaction must be approved and signed by at least two or more of the preset authorized persons before it can take effect.) This mechanism, similar to the dual or multiple authorization mechanism of traditional banks, can effectively prevent the loss of funds due to the leakage of a single private key or personal coercion.
Taihuttu revealed that about 65% of the family's crypto assets are locked in "cold storage" across four continents. At the same time, the storage devices they use do not rely on any commercially available wallets. Taihuttu firmly believes that this highly decentralized, private setting controlled by the family itself is far more secure than any centralized third-party vault service or standard cold wallet on the market.
Safety considerations reshape life patterns
On the other hand, this growing security threat has had a significant impact on the lifestyle of the "Bitcoin Family," who used to promote Bitcoin and cryptocurrency lifestyles by sharing their global travels and family videos through YouTube and other social media.
However, due to safety concerns, they have recently stopped posting any content that could reveal their current location. The family members even decided to cancel their original trip to France due to the recent kidnapping incidents in France.
Taihuttu expressed his concerns:
I think we're going to see more and more robberies. So, we're definitely going to avoid certain areas where there's a higher risk. It's a strange world out there and we have to be vigilant at all times.
The market has also begun to respond to this wave of security crises targeting cryptocurrency holders. It is understood that some insurance companies have begun to launch Kidnap and Ransom (K&R) insurance services specifically for cryptocurrency holders.
As the value of cryptocurrencies continues to rise and more and more wealth is stored in digital form, the issue of physical security is likely to become a key issue that all cryptocurrency holders, especially high net worth individuals, must seriously address.
Further reading: Several insurance companies plan to launch "crypto-rich kidnapping ransom insurance", which will be launched as early as this fall
