Why do I need a Ledger Device?
We all have that friend who loves us and thinks we’re smart, but doesn’t own any crypto and also thinks we’re a little weird and crazy. After the Ledger Stax video yesterday, mine asked me, “Why do I need this again?” I wrote him this response. I hope it’s useful for you, too.
We live digital lives. We have digital ownership and will have more with each passing year. This is akin to me telling you, “you will use the Internet daily fifteen years from now,” in 1998.
Beyond digital ownership, Bitcoin is something very special, existing in a very narrow design space within which most ways you try to improve Bitcoin somehow makes it worse. If you hold pesos, you want to hold dollars instead. If you hold dollars, you want to hold Bitcoin instead. Please read Lyn Alden’s “Broken Money” and let’s discuss together over a meal and bottle of wine.
I’m a collector. I love culture. I love stories. I love the stories of the artists and the art I have collected. Here is one such story, written by me about Mpkoz and published on Rick Rubin’s Tetragrammaton. And here is Hedvig and my digital gallery.
Now, what are your options for storing your digital value, including Bitcoin?
Ledger is in fact the best option. Everything else is a compromise.
Why?
Your private key is the secret that proves you are the owner of your digital value. Your digital value is not stored inside your digital wallet. It is stored on the Blockchain. You use your private key to prove you are the owner of, and that you approve of any transaction related to that value.
Unless you have:
- A Secure Chip to generate and store your keys,
- A Secure OS to execute operations on this chip,
- A Secure Screen to approve transactions,
You do not have security!
You could keep your assets on an exchange or custodian. This is like keeping them at the bank, or keeping your photos in your iCloud account. “Not your keys, not your coins,” meaning, in this case you don’t have your private key, you have only a login and your trust in the custodian that they will be there tomorrow. As someone who has seen MySpace, Flickr, etc come and go, I will not keep my value with a custodian. Ponder: if not self custody, why crypto? Self custody is not only for owning digital value but also allows the use of your assets, credentials, and attributes or preferences…that you own. It’s not only digital private property, it’s also freedom of usage of that property. Let’s discuss! With the aforementioned bottle of wine!
For self custody, meaning you hold your own private key, you have many choices.
You could use a software wallet, but that misses all three of the above security requirements. Your phone was designed for performance, not security, and that is what you get from it.
You could use a hardware wallet without a secure chip. This is not worth any trade-off. If you do, let’s trade for 24 hours. I give you my Ledger, you give me your less secure hardware wallet. Then we trade back 24 hours later. No?
You could use a hardware wallet without a secure screen or input. But then the device is merely a “signing oracle” and you are relying on an application on your phone to tell you about the transaction you are signing. This is like signing a blank check. What if that application is a rogue one or your OS is compromised in some way?
Ledger has been designed to meet all three of the above requirements, and our daily mission is to make digital ownership and security simple without ever compromising on security or self custody. During every crypto cycle very smart entrepreneurs rationalize the need to compromise on security and self custody, usually including the phrase, “onboarding the masses.” Every cycle we see where this leads, people losing their value. Our daily work at Ledger is to try to bring better experiences with digital ownership to more people through simple-to-use devices and integrated user experiences, without ever compromising on security or self custody.
Additionally, you need security broadly in your digital life. What are you using for password security? In how many places do you use the same password for multiple sites, have no two-factor authentication, or use your phone number for two-factor authentication? What happens if your recycled password is compromised, you are sim-swapped, or your phone is stolen and you lose control of your iCloud account?
Ledger Stax has a new application called Security Key which I use for my 2FA and Passkey whenever possible, adding a hardware layer of security on top of my password management in my daily life. More on this coming as 2024 progresses.
In the future, instead of your preferences being stored across thousands of sites across the internet, and using your password manager 10x per day to fill in your passwords and credit card info, YOU will be the custodian of that data, and securely federate exactly the data or value needed when it’s necessary to share it.
Also, in a world of digital abundance via AI, proof of humanity and identity will become increasingly important. Signing in with a Ledger is not at all efficient to do with bots, and holding a digital version of an identity card can allow you to federate unique identification to applications with your permission.
For me, Ledger Stax is to digital ownership and security as the iPod was to digital music. There were digital music players before the iPod, but only early adopters remember them and invariably those adopters had MP3s THEN had a digital music player. The same is true of hardware wallets before Ledger Stax, early adopters own them and their path to Ledger was ownership, education, then Ledger. I believe in the future easy-to-use E Ink touchscreen wallets like Ledger Stax can be an on-ramp for new crypto users. They can simply pick up a Ledger device at Best Buy and get started on their crypto journey.
