Why should you be your own bank?

Bitcoin is a revolutionising technology that enables individuals across the world, regardless of their background, to be in control of their money. This possibility removes the trust we are forced to give to banks, governmental institutions, or those managing our funds. Bitcoin is real freedom money.

How does the current banking system work?

When we first hear Bitcoiners saying, “I am in control of my money”, it is likely to sound ridiculous since most people in Western countries have direct access to their bank accounts. However, with the recent events of 2023, we realise that money sitting in our accounts could disappear or be taken away very quickly.

We must ask ourselves the simple yet essential question, why would our money disappear if we can see the right balance on our bank account? The money must be there, right? In reality, only a fraction of bank deposits must be available for withdrawal. Banks only need to keep a specific amount of cash on hand and can create loans from our deposit money. This is Fractional Reserve Banking.

The fractional reserve banking process creates money inserted into the economy. When you deposit $2,000, your bank might lend 90% of it to other customers and 90% from five other customers’ accounts. Your balance still reflects $2,000, and the customers that the bank borrowed from also see their balances remain unchanged. However, if most people were to show up in the same week at their bank’s ATM and withdraw their money, it would cause a financial catastrophe because banks do not have all of their depositors money on hand. Otherwise known as a bank run.

Fractional reserve banking has high risks and high rewards; however, when banks fail, they drag with them the entire economy and honest people are hurt. In other words, they privatise the profits but socialise the losses.


“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” ― Henry Ford


Banks rely on people’s trust, and most of us have been clueless about how the banking and monetary system operate. Banks are incentivised to insert more money into the economy to profit from loans, but by creating money out of nothing, they increase the money supply, resulting in inflation.

Banks steal the wealth of their depositors without them realising it, but what if there was a way to opt out of this vicious cycle?

Why would you become your bank?

Across history, too many people have been hurt by the greediness of governments and banks. The scenario has permanently been the same from the Roman Empire to current times. Institutions control the money supply or the issuance of money. They become greedy and increase the money supply by counterfeiting the medium of exchange. In turn, it devalues the currency, resulting in infaltion across the economy.

Thankfully for us, in 2008 Satoshi Nakamoto gifted the world with a revolutionising way out: Bitcoin.

Bitcoin has a finite supply of 21,000,000, meaning no one can print or issue more. If you have self-custody of 1 BTC, you will have 0.000005% of the total money supply. Forever. (unless you spend it, of course).

By creating your own bank, you become the only person to trust. Instead of relying on a monetary policy that is in the hand of corrupted governments or institutions, you opt out to a leaderless, censorship resistant, trustless and permissionless monetary system.

What are the risks of being your bank?

Before becoming your bank, you must realise the risks involved. You are responsible for your money and no one else. If you lose access to your seed phrase (more on that later), there won’t be customer service to call. There will be no refunds. If you are careless with your backup and someone finds it, you will likely lose your savings. The consequences of your irresponsibility immediately impact you.

Repeat: You are responsible, no one else.

How do you create your bank?

If you want to create your bank, you need to have self-custody of your Bitcoin. Self-custody means you do not trust someone else to hold your freedom money for you. If you leave your money on exchanges like Coinbase (please do not buy on centralised exchanges) or in custodial wallets like Wallet of Satoshi, you trust someone else with your money.

Bitcoin is open-source software, which means everyone can see how it works, and anyone is free to copy and modify it. Following this ethos, Bitcoin-centric companies are open source, and I would encourage everyone to find free and open-source software (FOSS) to self-custody their Bitcoin.

Below are some of the privacy focused wallets available. I put an emphasis on privacy because it is a non negotiable requirement if you want to safely transact with Bitcoin. Remember that the blockchain is open to anyone. It means that centralised exchanges can follow your fingerprints if you are careless.

Hot Wallet:

Cold Wallet: