The intended audience of this article is for Amber users who are wanting to know more about how to take control of their bitcoin(s). It will also cover Amber’s security set up, how it is different from other exchanges and what are some important aspects to consider when taking ownership.
Security has a cost
The difference between Amber and most exchanges is that we are Bitcoin only, you can read more about why we are here. One of the benefits of being Bitcoin only, other than a better user experience and commitment to Bitcoin, is that the product’s “attack surface” is smaller. Because we don’t list hundreds of coins, and keep funds “hot” so they’re available for trading, our Bitcoin-only product is naturally a more secure environment.
Amber stores nearly all of your Bitcoin(s) in cold stored collaborative custody wallets, with the help of the team at Unchained Capital. Cold storage involves keeping the keys associated with the Bitcoin(s) offline, collaborative custody (also known as multi-signature) requires multiple parties to be able to sign a transaction to move funds from a Bitcoin address. Together, cold-stored collaborative custody is the safest way in the world to hold bitcoin(s). Because Amber is a buy-side dominant product, it means we can maintain the vast majority of our bitcoins in cold storage.
Security has a price, some exchanges charge less to withdraw because they have hot wallets (funds online) and different security setups, usually thousands of alt coins too. This is why leaving bitcoin(s) on these exchanges has a much higher risk as these exchanges tend to have a much bigger attack surface from nefarious actors. For our users though, our security model gives them peace of mind as we have minimised our attack vector as much as possible. This gives our users time to do their own research about key management at a pace that suits them while safely stacking sats and getting exposure to Bitcoin in the meantime.
I hope this clears up why our withdrawal fees are slightly higher than what the average “exchange” might offer. If you’re interested in a free monthly withdrawal and stacking more, you might be interested to read more about Amber Black here
Self custody components
When it comes to your own key management and hardware, we provide beginner guides, see here, but we do not tell you absolutes about what you need to do. This is because each person has their own subjective perceived risks and technical competency. A lot of people have lost their Bitcoin/s because they were careless in their setup. Generally speaking, you should learn how the network works and take custody of your Bitcoin but DO NOT RUSH THIS. We think security is of the utmost importance and hope you do as well!
Written by Ben Jarvie.