Month: June 2021

Is crypto finished?

| roger nunn

Whenever Bitcoin changes value the rest of the crypto market reacts, usually mimicking Bitcoin’s moves. There are many opportunities to make money buy strategically buying and selling other coins, provided that you time their changes against the value of Bitcoin.

Bitcoin’s value dropped by half in the last couple of weeks, which brought out the doomsayers, with endless reports about the end of Bitcoin.

In reality it is a bit more complicated. Bitcoin was the first cryptocurrency and because of its inherent limitations in terms of speed, has morphed into a store of value rather than a useful tool.

The rest of the crypto world is developing quickly with new coins and tokens coming online all the time, most of which have specific use cases. The development of the crypto world is very competitive with their relative values changing constantly, as was the case for web based businesses in the early days of the internet.

So I believe that as the crypto market matures, there will be many opportunities to make money. However there will be many opportunities to lose money as well, which is why I have only invested money that I can afford to risk.

Now each Bitcoin is worth close to US$ 40k, taken by many to be a disaster. Many panicked and sold their holdings at a loss, a stupid thing to do and one that only exacerbated the situation.

At $40k, each bitcoin is worth about 4 times what it was a year ago, so profit is still the order of the day.

Anyway, I don’t like the current sideways movement of Bitcoin’s value as big fluctuations provide a better opportunity for me to buy and sell at a profit.

What’s in a hardware wallet?

| roger nunn

When I started looking at crypto there were lots of comments online of what a disaster Mt Gox was for Bitcoin owners. Mt Gox was an exchange that was hacked and many people lost Bitcoin.

So it is clear that if exchanges can be hacked you can lose your crypto.

The answer is to to keep some of your crypto on exchanges for trading purposes and to store the rest “somewhere safe”, in a hardware wallet. Given that all crypto movements are stored online, in a publicly readable format, it is hard to see what you can store in a “hardware wallet”. I find the name slightly misleading as I feel that my Bitcoins should be in the wallet, perhaps in a form that I can get out.

In fact, the hardware wallet is just a password protected memory stick that stores your private keys, each private key being just a string of numbers and letters. Now I can imagine that, a wallet that has keys in it, keys that serve to open up access to value stored on the blockchain.

So far, no one has managed to take a Bitcoin address (public key) and find the private key through running computer programs. This means that without the private key, no one (not even you) can recover the money from the blockchain.

Interestingly, when I first started with crypto, there we no hardware wallets and I just printed out the private key and hid it away where no one would find it.

So, after looking and looking, all I found in the hardware wallet was a series of numbers and letters.

I have simplified it but feel that this covers the essential points, or “Not your numbers, not your crypto”.