A product launch gone wrong
Welcome back. Bitcoin Miami, the world’s largest crypto event, returned to the Sunshine State this past weekend—but eve Florida hasn’t been spared from crypto winter. 12,000 people attended the event, down significantly from last year’s 25,000. Did you go? I’d love to hear what you thought—hit that reply button.
Today: Ledger takes a beating, GREED teaches a lesson, and Bitcoin hits a milestone. Let’s dive in.
Can Ledger Recover from Ledger Recover?
Last week, Ledger released its brand new “Ledger Recover” feature—quickly prompting significant criticism of crypto’s most popular hardware wallet manufacturer from many in the space. Let’s unpack.
What is Ledger Recover? It’s an optional subscription service designed to remove individual responsibility from crypto self-custody.
For $9.99/month, users can recover their funds in case they lose their wallet’s seed phrase or their actual hardware device.
It works by encrypting a given seed phrase, sharding it into three pieces, and safely storing the encrypted fragments with three different parties.
On its own, a fragment is useless—but users can retrieve the entire seed phrase by confirming their identity with a government-issued ID.
The backlash: The new feature sounded the crypto community’s alarm bells. Two reasons why?
The news that this recovery functionality is at all possible for Ledger devices left users enraged. Ledger had previously promised that it couldn’t extract anyone’s private keys—but Ledger Recover suggests that it was always possible for Ledger to create firmware to do just that.
Ledger has a history of security breaches that exposed personal customer information. Given that Ledger Recover requires users to share their private keys and identity, the worry is that hackers will exploit this data goldmine.
Nov 2022: A firmware update cannot extract the private keys from the Secure Element — Ledger
May 2023: Technically speaking it is and always has been possible to write firmware that facilitates key extraction — Ledger
@Ledger, do you now understand the problem?
— olimpio (@OlimpioCrypto)
May 17, 2023
Zoom out: Ledger Recover highlights the tradeoff between self-sovereignty and user-friendliness when it comes to crypto custody. On one hand, trusting third parties with sensitive information—like seed phrases—always comes with inherent risk. On the other hand, improving crypto’s UX is the first step towards mainstream adoption.
"This is what future customers want,” Ledger CEO Pascal Gauthier said in defense of Ledger Recover. “This is the way that the next hundreds of millions of people will actually onboard to crypto.”
GREED is Good
It’s story time. Today: the cautionary tale of GREED.
The beginning: Meme coins have been making a comeback this spring—but a few weeks back, Solana community member Voshy grew frustrated by what he considered to be recklessness among traders aping into the FOMO.
He wrote an ironic tweet shilling a made-up token ($GREED) with the intention to raise awareness about the irrationality behind meme coin hype. He planned to call out the few foolish degens that believed he would actually launch the token.
Are you guys ready for $GREED?
Notifications on, next post is the most important one for the airdrop.
All interactions with this tweet will be recorded.
— Voshy (@voshy)
May 6, 2023
The middle: Crypto Twitter didn’t get the joke. They took Voshy’s nonsense literally and hype about $GREED spread. Voshy then decided to go all-in on the bit, turning it into a social experiment.
He promised investors a $GREED airdrop if they gave him access to their Twitter accounts and signed red flag transactions that could have potentially emptied their wallets.
The end: When $GREED finally airdopped earlier this month, two things happened:
Speculators received 8,007,320,330 tokens, which are coded so that they can never be sold. That 8 billion figure also happens to be the digits of the SEC’s phone number.
The Twitter accounts of those who received $GREED automatically tweeted out an embarrassing warning exposing their owner’s foolishness.
The lesson learned? GREED exemplifies just how much people are willing to risk for the potential to make a quick buck. But for every lucky degen who made a 5,000,000% profit on PEPE, thousands of meme coin traders lose all their money to scams and rug pulls.
BTC’s 1 Million Milestone
On-chain data platform Glassnode recorded that the number of crypto wallets holding at least one entire bitcoin surpassed the 1 million mark last Monday—that’s up 20% from February of last year. (Remember, the total supply of BTC is capped at 21 million.)
The data also shows that BTC wallets holding one token grew by 79,000 between November 2022 and January 2023 alone, right when FTX came crashing down and crypto winter hit new low temperatures.
What does this mean? In general, the numbers suggest that the long-term sentiment for bitcoin remains bullish even as the BTC price remains comparatively low.
In other news:
Crypto Job Board
Dive into the world of copywriting, design, and storytelling as Code4rena’s Web3 Content Marketing Specialist.
Crypto tax reporting platform CoinLedger is hiring an Integrations Team Lead to take over the development of new product integrations.
Bring blockchain gaming to the world as a Sales Representative at PlayToEarn.
And that’s what you need on your radar today in crypto. We’ll be back on Tuesday with another edition of the Coinsider Radar. Want more before then? Head to the Coinsider YouTube channel for some stellar insight—like our latest video on the Top 7 Arbitrum Projects with the MOST Potential.