Trezor Hardware Wallet to Support Bitcoin Cash

A maker of hardware wallets for cryptocurrency has recently confirmed they will add support for Bitcoin Cash.  I’ve also been an advocate of not using these even before the Ledger Nano hack came out.

I suspect that some will lose their currency or at least have to try to recover it based on confusion over the two.  I really think it’s a bad idea since most currencies have no built-in protection to sending into the abyss to a non-existent address of another blockchain.

 

We Need A Better Coin Now!

Cryptocurrency today as of the time of this writing is in a bit of a flux and identity crisis.  Part of this is due to a well directed campaign in the news via government and banking entities.  However, I will always give credit where it is due and many of the flaws that have been pointed out by these entities are completely true.  In fact, from a business, security and IT standpoint I find that most cryptocurrencies are almost impossible to use.  There are coins that individually address “some of the issues” but I have never seen a coin or team that “just seems to get it”.

Whether it’s how an ICO is run, basic functionality, security, privacy, getting out information it seems apparent to me that the vast majority of teams and coins do not sufficient combined IT and Business Knowledge to make things work.

There are just so many issues with a lot of the top coins that could kill them, let me name a few in no particular order.

Speed – 99% of cryptocurrencies are extremely slow taking minutes, hours or several days to complete a transaction!

Expensive – A lot of times you can spend a small fortune just sending a small amount of coin to someone (you could spend $100 to send $5 of coins with some Ethereum tokens for example)!

Security – Most coins are by default completely insecure.  Any coin that has a public ledger is insecure and has 0 privacy.  This allows for replay attacks and all kinds of nasty things.  It also means your activities are easily tracked and traced.  Imagine if your competitors can see exactly who is paying and who you are paying including the full amounts?  It would put your business at a huge disadvantage.  Having “public, permissionless blockchain” such as Bitcoin, Ethereum, Litecoin etc..  will mean the coins can never be secure when the whole public is involved.

Hardforks – Most coins are easily counterfeited, hard or softforked where basically anyone can copy an entire coin and just rename it and call it their own, while confusing and devaluing the original coin holders.  This should never be able to happen just for the reason of sanity, continuity and integrity.  There have already been scams like the BTG Scam and replay attacks.

PoW/Mining – It is absolutely crazy that mining still exists, as cool as it originally was, mining is now a hindrance in many ways to the cryptocurrency community.  Not only is it wasteful in terms of energy resources, it is unsustainable in both environmental, monetary and functional terms.  Returns are so slow with most major coins that it is almost not worth it unless your power is cheap or free.

To top it off why on earth should we let transactions be controlled by “miners finding the next block”.  It doesn’t secure the network anymore and that is because coins like Bitcoin were created before ASICs and assumed “no one would party would hold more than 10% hashing power”.  Of course single pools in China have way more than 10% power and so do some mining farms possibly.  This means that pools and large farms could work together to defraud people by sending false transactions and confirming it among themselves.  By the time the scam is realized the parties who initiated the scam would already have escaped with the money.

Mining also leads to centralization, the very thing that cryptocurrency was meant to avoid.  This inevitable because as difficulty increases, only large corporate or government players with deep pockets can continue.

The same applies with running full nodes, large organizations will be the one running them.

Usability – Most coins are unusable because they are slow and insecure but to make it worse there’s more.  The current coins are not easily integrated in a secure way.  You shouldn’t have to run a full Litecoin, Bitcoin or Ethereum node on a huge mega server with tons of RAM and HDD just to create receiving addresses and receive payments.  This not only inefficient, it is insecure because the same computer that generates the receiving addresses is usually the one that holds the wallet/funds.

To top it off you can send to a wrong or non-existent address and lose your money forever with virtually all currencies.  Blockchain is just a big database, couldn’t some query be done to make sure the address actually exists?!  On top of that there is no feedback, send by e-mail or notifications by e-mail you always need to keep your wallet open to notice.  It would be much easier if these different functions are kept separate.  However this is a problem too because most cryptocurrencies are admittedly not secure if you don’t sync the entire chain.  And that’s another issue, syncing is a huge issue with coins like Ethereum it is extremely slow and takes a ridiculous amount of CPU cycles.  Imagine paying someone from Craigslist in person  and one of you says “hold on mate sorry I have to wait for my wallet to sync for hours or days!”.

 

Edward Snowden Says Bitcoin’s Downfall Is Public Ledger

I couldn’t have said it better myself although I have said as much about all cryptocurrencies which have a public ledger.   Edward Snowden made the comment at the Blockstack event in Berlin, Germany.   They are completely insecure and unsuitable for personal or business use in the long-term due to a lack of privacy.   There are other issues that Edward touched on such as extremely slow transaction times and many more I’ve talked about in other posts.

Snowden also predicted that a coin which fixes these various issues could be the one to replace Bitcoin.  While I fully agree privacy and security in Bitcoin and most other coins are an issue, aside from that most currencies are slow, inefficient, difficult to use and simply don’t work properly to send or receive payments.  This will all eventually be fixed but so far what I find is that some currencies fix one problem while ignoring the rest.

2018 Year of the Dogecoin Prediction as it crosses the 1 cent mark!

I’ve held Dogecoin for some time and never really considered it the “internet meme joke based currency” that some consider it and recently bought more as  I saw it approaching the 1 cent mark.  Those days are gone with a Christmas Present of Dogecoin crossing the 1 cent mark!  In fact it is been surging lately despite naysayers predicting its demise for various reasons.  One huge thing Dogecoin has always had is a loyal and large community who uses the currency.

dogecoin-2017-2018-47percent-surge

Now that Litecoin has hit the $300 USD territory and many other altcoins are very expensive clearly others have seen the value and potential in Dogecoin.   In fact I believe it is undervalued and in the past 7 days Doge has nearly doubled to reach the 1 cent mark and market cap of 1.2 billion!  It’s a huge milestone and for those who remember way long ago, there was a point where Doge was equivalent in value to Bitcoin!

I believe 2018 is Doge’s time to shine and it is definitely going to head into Litecoin territory (possibly the tens of dollar range in 2o18).  Essentially the Dogecoin client looks the same as Bitcoin’s and Litecoin’s.  In terms of technology though Dogecoin is more like a derivative or little cousin of Litecoin in the sense they both use Scrypt technology.

This is a good thing because I’ve never had delays or issues with sending or receiving Litecoin or Dogecoin, whereas Bitcoin can be slow and Ethereum is a nightmare to use (it is the worst wallet/client/network I have ever used and I absolutely dread Ethereum).

I think amazing things are going to go down for Dogecoin holders, likely not as big as long-time Bitcoin holders but I think in the coming years, Dogecoin users will be handsomely rewarded as the value skyrockets.

Another reason Dogecoin is rising is because of research, awareness and it is also a plain good buy compared to a lot of other much more expensive altcoins I firmly believe Dogecoin is largely undervalued.  Dogecoin is a long-time crypto whose stability has been tested and proven for years.

I’m bullish on Dogecoin so long as the developers keep working on and marketing this currency and if they cap the supply.  I don’t think it will take much for Dogecoin to see meteoric rise so long as those conditions are met.

 

 

Ethereum’s Issues Stem From the Basics

Ethereum is certainly #2 in the market capitalization only second to Bitcoin but it doesn’t mean it’s as easy to use.  In fact I suspect my recent experience is what is keeping it from rising, Ethereum makes me nervous and reluctant to use it everyday. As someone who has used the client’s/wallets for both I find Ethereum’s is cumbersome and at times impossible to use, thus preventing the user from using it to do any transactions at all.

Imagine if a simple eTransfer or Wire from your bank took over a week to initiate?  That’s way too long and beyond the purpose of the infamous but in practice non-realtime transactions in the cryptoworld.

I spent nearly a week syncing 4 months of blocks!

I needed to do a transaction in Ethereum and opened up my Ethereum Client which slowed my whole computer down and ultimately wouldn’t update past a certain point.

I consider myself an above average user who is good at troubleshooting issues.

I updated to the latest Ethereum client and that still didn’t fix it.

Some users suggest deleting the “chaindata” folder and that didn’t fix it.

Eventually I decided to do delete the whole “Ethereum Wallet” folder (never do this without backing up your keystore files safely).  Also be aware that this folder “Ethereum Wallet” is not where your keys/wallet data are stored.  In Linux they are stored in “~/.ethereum/keystore”which is very misleading when you have a “~/.config/Ethereum\ Wallet” (which is not where your wallet data or keys are stored).  I stress this because I came across many who had sworn off the Ethereum Coin and team because of this confusion where they lost their keys and ultimately their investment and coins.

The solution was to delete “~/.config/Ethereum\ Wallet” but the fun didn’t stop there.  It was updating so slow through the missing blocks that it felt like I was mining the entire blockchaining (you could literally count 1 by 1 as it was processing or sometimes it would take minutes on a single block).  I’ve been able to sync the whole Bitcoin or Litecoin Blockchain more quickly and without or much impact on my computer.

I decided to switch the chaindata for Ethereum to SSD it did speed things up but not significantly and still took about a day to catch up and my computer still did slow down.

What I Learned About Ethereum

For all of its features I think the team is out of touch with getting the basics right first, as evidenced by the “Parity” fiasco where through no fault of the users people have essentially lost or have 160M worth of Ethereum coins frozen and lost presumably forever.  I have never seen this with another major coin.

Nor have I seen or experienced the confusion on basics of why their client is so complex.  Why does it use another program geth to sync the data?  Why are there so many different choices, fast sync (which didn’t help speed things up for me), a MIST client and so many different confusing and unnecessary choices and complexity?

I like how I can just download the Bitcoin client or Litecoin client and it works simply, there’s no guessing or confusion.

When it comes down to it, if someone with my background is having to troubleshoot and it slows me down from doing transactions, or I fear my coins could randomly be lost it doesn’t bold well for Ethereum’s future.  I don’t mind leaving other wallets running but Ethereum just takes too much computing with SSH so it’s not practical.  I will consider Ethereum a wise investment with some risks I’ve highlighted above but for any cryptocurrency to truly be accepted and successful it must be secure, fast, reliable and easy to use (something which most cryptocurrencies still fail at if not for the reason that you require the whole blockchain to keep your money in your own possession or have to rely on dangerous uninsured third party exchanges or services that are often hacked).

As we can see below this is not a sustainable practice for cryptocurrency going forward and I will be posting more about how I think the future of crypto will be significantly different than we currently see.

Screenshot-Ethereum Wallet-19

Bitcoin – I Don’t “Get It”

This may sound strange coming from a CEO who owns and uses Bitcoin and other cryptocurrency through multiple businesses that accept Bitcoin each day.   But I still really don’t understand Bitcoin on a practical level, the technical part is understandable but for how long will the current model of currencies like Bitcoin and Litecoin work?  Do not get me wrong, I am long on crypto still but what that means in the coming years and decades is probably going to be vastly different than the current model of today.

What Is A Confirmation And Why Does It Take So Long?

What I’m referring to is when you send or receive currency there are varying opinions of what it means to actually “confirm” you have it.  But even before that people who have sent and received cryptocurrency know it is actually quite slow.  It can easily take a number of minutes and even after that point it is recommended you wait for a certain amount of confirmations.

It’s quite simple, these crypto networks with multiple nodes have to talk to each other, this takes time for them to all be in sync or agreeance with the blockchain.  Once that happens you get your first confirmation, however this can be a number of minutes and still doesn’t absolutely guarantee you have the money in your wallet.

The current system is nearly impossible to use as a daily transaction/banking experience.

I’m used to using cash, debit, credit or even services like PayPal.  It is all fairly instant (although sometimes it can take several seconds for debit or credit) but once the payment is approved and the merchant is notified instantly, they knew they have their money.  Imagine waiting for even a single confirmation for cryptocurrency while in line at a supermarket?

Why does the problem exist?

It’s quite simple, ironically it’s the one huge negative side effect of distributed, decentralized cryptocurrencies.   There are other drawbacks too such as what happens to banks if they are DOS’d but this hasn’t been a huge factor so far in crypto’s history.

What other risks exist?

My biggest fear is that in the future a powerful organization or entity may eventually be able to reverse engineer or find another way to attack the blockchain and algorithm of some cryptocurrencies.  This would essentially spell disaster, chaos and the end of that currency.  It would be the equivalent of the destruction or infiltration of a fiat currency’s central banking and distribution system.

One other issue with the blockchain

Everyone knows the safest way to hold crypto is with your own wallet because exchanges are routinely hacked and coins are stolen, it is more risky to keep your coins with a third party wallet (essentially the equivalent of an online crypto bank).  The problem lays with the issue at this moment that those deposits are not insured (although I believe Coinbase and a few others may have some insurance).  This may change in the future and exchanges and currencies that are insured will definitely rise above the rest.

What is the solution?

This may draw the ire of a lot of hardcore crypto users but there has got to be some sort of central authority, body or “top-tier” network similar to root DNS servers on the internet that can serve and validate transactions on the blockchain.  There must be some sort of physical organization between the nodes on the blockchain.

Is there a current solution to this problem?

Ripple/XRP solves this problem by essentially verifying transactions instantly and keeping all the currency in essentially an online global wallet (there is no such thing as paper wallet or traditional on your computer/device wallet).  The advantage is that you don’t have to store hundreds of gigabytes of blockchain data (and growing) like Bitcoin and other currencies.  Ripple has the benefit of also being endorsed by major financial institutions which is a first for digital crypto that I’m aware of.

I haven’t done further research but currencies like XRP I believe are the future, things can be done anyway technically and Bitcoin, Litecoin and similar blockchained coins can do this if they change some of their decentralized model.  I expect there will be more infighting and similar splits as the Bitcoin Cash that emerged from the Segwit update as the industry matures and expands.

Disclaimer

I hold positions in multiple cryptocurrencies including Bitcoin and Ripple and have given my true opinion of both in this article.