September 1, 2019
Cryptocurrency restores the control of monetary control back to the individual user. We can now create and most importantly program the only thing that's tangibly cooperative in a civilization. This cooperation cannot be done without a medium of exchange. Money has been estimated to exist for over 3,000 years and before that, it is believed that bartering was the method of transacting. Now, we can send value across the globe from person to person with just an app. In addition to global transactions, a growing decentralized financial system where you earn interest on the cryptocurrency you own is revolutionary. The same technology that allows you to earn interest, transmit globally, and program currency, allows you to create unique gaming experience where the player is the owner of digital assets.
All of this functionality exists, but is it ready for mainstream adoption? For this exercise, lets define what mainstream might mean. Ease of use, secure, intuitive are the surface level ingredients. The deeper level definition would have to include end user control of private keys, immutability, censorship resistance.
One of the most important aspects of cryptocurrencies is the ability to own the asset by owning the private key. At the moment, the on-ramp to the crypto-verse happens through centralized exchanges where they control your private keys. Companies that control your private keys are known as custodial services. A traditional bank is a custodial service. The problem with centralized services is it creates a honeypot for hackers to concentrate their efforts. There have been a large number of hacks that have compromised several billions all together. Once the cryptocurrency has moved to the hacker's wallet, there isn't a way to get that currency back. The only method to mitigate this disaster is to work with many of the cryptocurrency exchanges to prevent the hackers from actually selling the stolen cryptocurrencies, which is sometimes effective. However, hacker shave tools such as tumblers that allow them evade tracking where the cryptocurrency actually ends up.
"Not your keys, not your money" says Andreas Antonopoulos. I've spent the last few days performing a sweep of my cryptocurrencies. A sweep is when you take your existing wallets and send all cryptocurrencies into a new wallet. In this case, the new wallet is a Ledger Nano X. This is a straight forward activity, withdrawal from your old address and deposit in your new one. Ledger has made it easy to transfer over some of the major cryptocurrencies, but I stumbled upon something that was completely obvious.
Cryptocurrencies are programmable, as I mentioned earlier. With this functionality, some crypto have special functionalities. Some are used for access to a network, others are used as a staking mechanism for voting, or earning interest on crypto. While others allow access to a decentralized app ecosystem where access is governed by how many crypto you hold. This fascinating aspect of programmable money is what makes storing them a little more complicated than just sending them to a hardware wallet.
To store these cryptocurrencies into your hardware wallet, you must download their respective wallet. In some cases you have to create an account, and in other cases all you need is to connect your hardware wallet to begin using. All of these scenariosI ran across were not intuitive to operate. In some cases, downloading from Github was a normal action, and on top of that, I had to whitelist these application on my Mac to make them run. This was required for many of the crypto I was trying to protect, a process that required a lot of research to make sure I was performing all the required tasks safely and correctly.
After several hours of making sure the process was correct, the realization set in. An interface that showed me my entire portfolio did not exist. The only way to check my balance was to open up the individual wallets associated with the cryptocurrency with special functionality, connect my hardware wallet, and finally manually calculate the value of that particular cryptocurrency. I recognize the difficulty in having a single location to offer such a diverse set of functionality. However, if this doesn't change the true value of cryptocurrencies will not reach the mainstream market and the industry will move at the pace of only the biggest cryptocurrencies. The alternative isn't really an option. Storing your cryptocurrency at an exchange does offer the most convenience, but those exchanges rarely give you the ability to leverage the special functionalities that some of the cryptocurrency offers you.
"Crypto is at the 1994 era of the internet" says Antonopoulos, he's never been more right after this experience.
