As I take the Ledger out of its exceptionally sleek packaging, the silver card with the inscription “TRUST YOURSELF” immediately catches my eye. And as it is often the case with things that seem trivial at first glance but contain a wealth of philosophy at their core, the phrase catches me with a slight delay. “Trust yourself,” is the slogan that has accompanied me since my irreversible foray into the world of crypto a year ago; whether subconsciously due to the many small steps I have taken during this period, or due to the decisions that have increasingly led me down this path. One of the many “teachers” I encountered along the way began one of his lectures with the sentence: “Acting in the crypto economy requires personal responsibility”; and that already contains more than one might assume.
“Not your keys, not your coins,” this phrase is almost like a mantra, repeatedly chanted by the community through various forums. In the end, it expresses that a decentralized network gives you a level of personal freedom, possibly long forgotten, that should not be carelessly placed back into the hands of centralized entities. Custodial wallets, such as those offered by cryptocurrency exchanges as central custodians, can harbor all those potential dangers that “consumers” have often painfully experienced when trusting an intermediary – single point of failure, censorship, expropriation. The colossal crash of the FTX crypto exchange painfully reminded the world that “Ponzi schemes”[1] à la Bernie Madoff are still en vogue; including their fiduciary figureheads with a trusting puppy-dog look. Therefore, it is considered an unshakable virtue in the crypto world to remain master/mistress of your wallet and thus your own destiny.
My first steps in Web 3.0[2] quickly led me to desktop and mobile wallets like MetaMask, whose low-threshold offerings and application comfort helped me overcome my initial shyness and discomfort. The problem with these type of wallets, however, is that the device on which the all-important seed phrase (essentially the PIN code to my crypto assets) is generated or transactions are signed, is my laptop. This laptop is online 99% of the time and thus, depending on security precautions, a potential victim of all kinds of cyber misdeeds – or to put it in the words of Mr. Andreas Antonopoulos during one of his lectures: “My laptop is like the seat of a public toilet.”[3]
After a certain period, when one has “leveled up” their wallet(s) from the initial excitement and mild despair and later through increasingly professional dealings with various treasures in the form of NFTs and/or various coins, the feeling of being “unprotected” in cyberspace becomes increasingly uncomfortable. Too often, you hear stories of drained wallets, and that a desperate user comments about a stolen Ape from BAYC (usually followed by the biting remark that while it’s unfortunate, the user should please not use that image as a profile picture anymore since they no longer own it). It is fair to mention that the fault often, but not always, doesn’t lie with the user.
The crypto space, despite the incoming wave of regulation, is still the Wild West in certain areas, and in the Wild West, you don’t want to show up with a knife at a gunfight. So choose your weapon wisely, and the consensus is in favor of opting for a hardware wallet—the most well-known devices are named Trezor, Ledger, and BitBox.[4] The key advantage of hardware wallets is the offline storage of private keys, separating them from laptops and smartphones that are vulnerable to hacking attacks—additionally protected by a user-chosen PIN code. Therefore, it is crucial to purchase these devices from official retailers; otherwise, you might end up with a Ledger bought cheaply from Vitalik3000 on a shady eBay shop. Sadly, one copy of the seed phrase should remain with Vitalik. We already know how the game ends—5 Ether and 15 NFTs to 0 for V.
So, as I take the brand-new, factory-sealed, and officially ordered “Ledger Nano S Plus” from the Ledger shop into my hands and plug it into my laptop, I can feel the vibration! Not because the device itself is vibrating, but because I’m getting into the groove—I’m experiencing what “Trust Yourself” feels like in Web 3.0. I had already gotten a taste of this when I moved my first crypto amounts between my wallets, knowing that only my copy & paste or QR code scanning skills and the triple-checking of the receiving wallet address kept my hard-earned coins from the blockchain abyss. But now it was the real deal; transferring beloved and hard-earned NFTs to my secure Ledger address. Pure terror mixed with exhilarating euphoria—like a bungee jump; with a rope, of course. But will it hold? Or has it been too long?!
It worked. With each transaction, one builds trust—self-trust. And it also feels better knowing your hard-earned treasures are in safe hands. By the power of the Ledger, I have the… but wait! Don’t get arrogant. The Ledger does not protect against punishment. Even though transaction confirmations occur offline, you can still sign “wrong” (compromised) transactions here.
Another milestone has been achieved. You mature through your tasks. It was a small step to order the Ledger and connect it to the laptop, yet it had significant effects. “Not your keys, not your coins,” a mantra. “Trust Yourself,” another.
In Web 3.0, we quickly reach a point where we cannot—and should not—simply delegate responsibility to a third party. When the trust machine performs its duties conscientiously, it is also up to us to take back personal responsibility. By taking control of our economic interactions in the form of transactions, we are expressing our economic literacy—our economic maturity—in the most significant way.
“A truth can only have an impact when the recipient is ready for it.” (Christian Morgenstern)
[1] A “Ponzi scheme” refers to an investment fraud that operates similarly to a pyramid scheme, where the funds of new investors are misappropriated to pay the apparent “profits” of the existing investors. At FTX, customer funds were misappropriated to finance highly speculative investments through a secondary company owned by CEO Sam Bankman-Fried.
[2] On Wikipedia, Web 3.0 is described as another iteration of the internet, in which decentralized blockchain technology and the token-based economy play a crucial role.
[3] The University of Nicosia has its own chair for Crypto Economics and offers free MOOCs alongside its regular study program, providing an excellent introduction (and advancement) into the subject.
[4] Another method of cold storage—i.e., storing the private key offline to prevent it from being compromised—includes paper or card wallets. In Austria, for example, the national printing office offers Bitcoin and Ethereum card wallets, which are produced with the quality expected from a national printing facility. As always, for all the advantages and disadvantages of this form of crypto storage, DYOR (Do Your Own Research) is recommended.
