The Crypto Insider Report #11: Keep it simple.
Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.
First of all, please go here and UPVOTE. It's important for the Stakeborg DAO story to be listed on Zapper. I wish there were a few hundred of us so that everybody can see the army we have behind.
We're approaching the end of the year, and that's pushing most of us to look back and take stock. We're all waiting for the moment when the market revs the engines again and bitcoin fulfills its on-chain prophecies and breaks 53k and then the ATH, but I think it's useful to rewind a little bit.
On Dec. 13th, 2020, in a pandemic year that we'll probably only have a few times in our lives (or never), BTC was $18,975 and ETH $567. Now they are $49k and $4k, respectively, but most people are hopeless and look from the sidelines. If you want a benchmark, EGLD was $17 and had a market cap of under $250 million. Figure that!
Every time we go through longer periods of correction or the price action is choppy (as it is now), many new investors in crypto come out more prepared to be profitable, while a good part invariably leaves the ship. Through the nature of my activity, I get in touch with a wide range of people who have put money in crypto, from Ultra-high-net-worth Individuals to people with $100 recently invested via Binance. Talking with each one of them helps me a lot. You realize that it's a young industry from the fact that even the most experienced still don’t have the patience they manifest in the traditional area... but sometimes you also come across someone like Daniel, who's the coach at the gym where I go.
About a month ago, he stopped me to ask me about what he should invest in, and I started my screed about risk management, DCA, all the boring stuff. He listened to me and said, "ok, that's what I’ll do." Recently, when we crossed paths again, I was expecting him to ask me "wen moon," but instead of that, the following dialogue took place:
"I read the other day that the market correction will end soon.”
"Really? Where?" I asked.
"Some specialists on Coindesk and Cointelegraph. Ok, I bought some anyway to have them there in the future, and I'm going to buy some more as they sit on eToro and they’re not asking for food. Isn’t that the right thing to do: invest a bit each time and do so in the long run? And at some point, it's going to grow a lot, once the industry grows and the products on the blockchain start to be used." Simple thinking.
Among liquidations and pumps, hype and FUD, greed, fear, scams, and rug pulls, a number (not insignificant, in my opinion) of people are getting their lives together, perfectly conscious or not, through crypto. The future will reward them.
Take care,
Vlad
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The first steps in crypto: What Are Multisignature Wallets?
The idea of Multisignature wallets appeared in 2012, the first ones being created and implemented a year later for the Bitcoin Blockchain. To define a Multisig wallet simply, we could see it as a bank vault. From a technical point of view, to unlock such a vault, more than one key is required.
Therefore, a Multisig crypto wallet will allow you to choose the number of keys needed to unlock it and set a minimum number of keys that can perform that procedure together. For example, a wallet can be assigned 5 private keys to open it, with the minimum required key number being 4.
This kind of wallet includes additional features, besides the classic ones of a crypto wallet, allowing, for example, access to funds and transaction history for all those who own an assigned private key.
For advanced security, each user who owns a private key also receives a unique recovery phrase which they must keep safely to guarantee that the wallet can be accessed if necessary by the minimum number of private keys required.
Advantages and Disadvantages of Multisignature Wallets
The advantages of a Multisignature Wallet include the following:
Multisig wallets make cyberattacks more difficult by increasing the number of potential failure points that hackers encounter throughout this process.
A Multisignature Wallet helps eliminate the security issues that occur with a single-private key mechanism.
In addition, it eliminates the dependency on a single device. For example, one of the private keys can be saved on a smartphone, while another can be stored on a desktop, laptop, and so on.
Last but not least, using a Multisig Wallet will reduce the dependency on a single user.
As in any other situation, there are also disadvantages that come with such a wallet:
When there are several private keys, there is no legal custodian of the funds deposited in such a wallet, which is actually shared with several owners of private keys. In the case of an event with a negative impact, it is very difficult to get legal help.
The speed of processing transactions suffers because, in order to sign them, it is usually necessary to access a device from a third-party source.
If it is necessary to recover a multisig wallet, this is a rather complicated process because it will be done by importing the recovery phrases on different devices.
Multisignature Wallets - Use Cases
Enhanced Security
A Multisig Wallet provides users with the benefit of a higher and extra level of security for their funds. If one of the private keys is compromised, the user or users of the wallet can be assured that the funds remain safe.
Although cybercriminals are constantly developing new methods to steal crypto funds, the built-in technology will easily deter malware or phishing attacks. A hacker will not be able to hijack multiple associated devices at once and, therefore, multiple private keys.
Decision Making
If a business partnership between several people invests in crypto, such a Multisig Wallet will be very useful to control the access to the company’s common funds.
This way, each member of the partnership will hold a private key, but none will be able to misuse the fund or have full access to the holdings.
Escrow Transactions
The Escrow Transaction is a legal agreement, in which a third party controls money or assets until two other parties involved in the transaction meet certain conditions. Therefore, an Escrow contract constitutes a mediator that reduces the risk for both of the main participants in a transaction.
A 2-of-3 multisig wallet can facilitate these Escrow transactions between two parties, and the process will thus include a third party as an arbiter if something doesn’t go as planned.
Two-Factor Authentication
Since private keys can be stored on different devices, Multisignature Wallets can be used as a form of two-factor authentication.
However, there are also risks in this context, which will increase if the Multisig address is set to 2-of-2 private keys. If one of the keys is lost, access to funds will also be automatically lost.
Conclusions
Multisig Wallets use multiple private keys, and therefore multiple signatures, to validate transactions and transfer funds, allowing for unanimous decision-making and thus providing increased security.
If used properly, they allow for many useful applications, which make crypto assets more attractive to investors, and therefore, they are a much safer and more credible alternative to crypto fund management.
Animation of the day: Bitcoin from 2009 to the present day:
For more animations: Cryptomatics
Tania
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The Altcoin Pulse
1. Polygon raises the stakes for the bet on ZK-rollups and continues the M&A series with the acquisition of Mir Protocol at a valuation of $400m ($100m USDC and 190m of MATIC tokens).
https://www.theblockcrypto.com/post/126991/polygon-acquires-mir-protocol-400-million-zk-rollups
2. Eric Schmidt, ex-CEO of Google, will join Chainlink Labs’ team of strategic advisers.
https://cointelegraph.com/news/former-google-ceo-is-now-a-strategic-advisor-for-chainlink-labs
3. Ava Labs joins the Mastercard Start Path Crypto program.
4. Several future token releases and listings, and other events.
5. As you can see in the table above, Humans.io was launched on Kucoin today after the highly successful IDO on Polkastarter.
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Interesting Headlines
1. WhatsApp and Novi are launching a pilot program through which a limited number of users in the US will be able to transfer USDP (Paxos stablecoin) between them.
2. Coinbase introduces the opportunity to get DeFi yields through Compound Finance. The service will be available to customers in over 70 countries.
https://decrypt.co/87924/coinbase-launches-high-interest-defi-yields-70-countries
3. Ledger announces the launch of a debit card and integrations with Coinbase, FTX, and Rarible.
4. A summary of the summit crypto executives had with the U.S. Congress last week.
5. Bill Gates predicts that most work meetings will be held in the Metaverse within 3 years.
https://blockworks.co/bill-gates-meetings-will-be-in-the-metaverse-within-three-years/
6. Palm NFT Studio, a company that provides services to artists or copyright holders to open their own NFT marketplaces, has raised $27m in a Series B funding led by Microsoft. Among the co-founders of the company is Joseph Lubin, co-founder of Ethereum.
7. Binance is preparing the launch of a trading platform in Indonesia in partnership with the richest local family.
https://blockworks.co/binance-considering-institutional-partnership-with-indonesias-pt-bank/
8. Chainalysis will launch an integration with Lightning Network for some of its customers.
9. A hack of about $80m in the hot wallets of AscendEx.
https://cointelegraph.com/news/ascendex-loses-80m-following-erc-20-bsc-polygon-hot-wallet-compromise
10. The largest inflows since the launch of the Canadian ETF, Purpose Bitcoin ETF, took place recently on December 6th, 8th, and 9th.
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Article of the week:
About trust and belonging to a group, a cool article written by Marius95 on stakeborgdao.xyz, a platform from the community for the community:
https://stakeborgdao.xyz/despre-incredere-si-apartenenta-la-grup/
Business book of the week: Extreme Ownership: How U.S. Navy SEALs Lead and Win. A book about self-responsibility and self-accountability and their role in the risky missions we all have through life. I read it 4-5 years ago, but I have recently gone through the notes I took then as I was trying to understand where the challenges of a DAO can come from.
Youtube clip of the week: GaryVee at Ryan Holiday. It's not about crypto, but it's a foray into the mindset of a man who knows what community means in web 3.0 through a stoic viaduct.