What is Blockchain?

I recently posted a link to the best explanation of Bitcoin I ever read. I read this article last summer that explained Blockchain and it really stuck with me. I didn’t appreciate how useful it was until I noticed I used the same explanation for the hundredth time between Thanksgiving and Christmas when friends and family quiz me about Bitcoin/Blockchain/Crypto.

Today I spent 45 minutes trolling my browsing history to find this article and I’m happy to have succeeded.  Read this. You will know more about the underlying protocol of Bitcoin and most alt coins than 99% of anyone with an opinion about digital currency:


What Is Bitcoin – Best Answer I’ve Found

Unless you program blockchain protocol, it’s hard to really understand Bitcoin or other cryptocurrencies. It seems almost impossible for a Bitcoin expert to explain to a layperson in a comprehensible way, and practically impossible for a layperson to explain Bitcoin to another layperson.

I’ve read a lot of articles about Bitcoin, and found most to be jargon-filled and too technical, or overly simplified and sort of insulting to my intelligence.

Then I read this article and many random facts I gathered started fitting together and making more sense about what Bitcoin is, what it does, and why it’s useful. Feel free to read and share:


This was published way back in 2013. I’ve seen other bloggers post this same explanation, but they all seem to be plagiarizing Nic Custodio. If I’m wrong, please let me know and I’ll update the link with the true original author.




Setting Up A Trezor Hardware Wallet

Having survived the (mostly imaginary) ordeals of purchasing the Ledger Nano S hardware wallet and a Trezor hardware wallet, I had to decide which to set up first.

Googling for guidance on this matter, I learned the Ledger Nano S requires a “third party wallet app”, but the Trezor Hardware Wallet does not because it has its own built in.  Having no clue about what app to choose, and the recent troubling news that 3000 people bought a fake wallet on the App Store, I chose the Trezor because it requires fewer decisions from me.

Trezor directs you to attach the USB cable to the Hardware Wallet device, then plug it into your computer (or phone I guess), open a Web browser and go to trezor.io/start. I HIGHLY RECOMMEND you do this in the Chrome browser. It will save you set-up steps. And if you, like me, are freaked out by this exercise, fewer steps mean fewer opportunities to err.

I started in Firefox, then started over in Chrome to streamline the process (and prevent critical operator errors). I opened the Chrome browser, and cut-and-pasted the URL from Firefox into Chrome. There was a “Download Chrome Extension” prompt, which I clicked. A prompt to “Add App” appeared which I also clicked. A few minutes later a message stated it’s ready to use.

Then a prompt to “update Trezor’s firmware” appeared. It gave an explanation about improved security, so I clicked OK. After a few minutes it completed and requested to uplug and re-insert the Trezor Hardware Wallet device, which I did.

The Website recognized the newly updated device, and prompts to name the hardware device. Spontaneously inventing a 16 character name paralyzed me until I saw it can be changed later. I entered a mediocre name and continued.

After naming the device, a 1-page tutorial about the Wallet’s user interface appeared. I clicked through the “see more” links, but it all seemed pretty obvious. Clicking “Continue” prompts you to concoct a PIN for the device. Crypto blogs unanimously praise Trezor’s “easy” and “intuitive” user interface. I, however, found the interface very confusing. It is unlike ANY interface a normal person has experienced in regular non-tech life.

The instructions say “enter your PIN into the Trezor”. The Trezor device’s screen displays a weird matrix of numbers. The browser screen shows a blank matrix. ALL hard wallet bloggers raved about the importance of the physical keys on the Trezor hardware wallet. So is it stupid that I assumed to input the PIN using the physical keys on the hardware wallet? Well that’s NOT what you’re supposed to do. I even went back a screen and re-read the “Enter PIN” tutorial and NO WHERE does it instruct HOW to input the PIN. You’re supposed to naturally know somehow? At near nervous breakdown, I figured it out.
Whatever PIN you dreamed up, you need to reference the matrix on your Trezor Hardware Wallet device but you INPUT your dreamed-up PIN into the BLANK matrix on your Web Browser. You USE THE MOUSE FOR YOUR COMPUTER to click on the BLANK SQUARE that appears on your Trezor device screen.

For example: If the PIN you dreamed up was 1234 (Please don’t use 1234), according to the populated matrix on the Trezor device screen shown here, you would use your mouse and click on the BOTTOM RIGHT CORNER of the BLANK MATRIX on your Web browser first to indicate the 1. Then you would use your mouse to click on the MIDDLE FAR RIGHT square of the blank matrix in your Web browser to indicate the 2. Then you would use your mouse to click on the BOTTOM MIDDLE SQUARE of the blank matrix in your Web browser to indicate the 3. Do you want to guess how you would input the final PIN digit? If you said “Use your mouse to click on the TOP LEFT CORNER of the blank matrix in your Web browser to indicate the 4”, you’d be correct.

When you’ve input all of the digits of the PIN you dreamed up (and hopefully wrote down somewhere), use your mouse to click the big green ENTER button below the blank matrix in your Web browser.

The browser will prompt you to enter the SAME PIN a second time, but this time, the numbers are arranged differently on your Trezor Hardware Wallet device. So you would NOT click in the same places on the blank matrix to input the same PIN. That’s how the PIN entry protocol is so secure and why the bloggers were raving about it (but not adequately explaining it, IMHO).

Once you’ve twice successfully input the PIN you dreamed up, the screen on the Trezor Hardware Wallet device will show you a random word. This is the first word of your “recovery seed”. You need to get one of the “recovery seed” cards that (should have) accompanied your device and a reliable writing utensil. I advocate pencil because I have terrible handwriting and am paranoid and a bit commitment phobic. You will need to record each of the words IN ORDER onto the “recovery seed” card. I guess you could use any piece of paper but this step really needs to be taken seriously and you don’t want to make a transcription error (or mis-number the order of the words because the order the words appear is very important).

The Seed Words appear on the device’s tiny screen in a weird typeface that I found sometimes hard to read. Know that the words chosen will always be COMMON words. So if you’re trying to decide if the word is “ROBIN” or “RODIN” it’s pretty likely “ROBIN” like the bird. I highly recommend writing in BIG BLOCK LETTERS to avoid ambiguity. When you’re ready for the next word, you press the physical button on the device labeled “next”. The Trezor Hardware Wallet device runs through the 24 words a second time so you can double-check what you wrote down. When you’re satisfied all is well, you press the physical button on the hardware device that says “continue”.

Now the device is ready to move some coins into it. BUT before you do anything, write down those seed words onto the second Recovery Seed card.  Use a reliable writing instrument, preferably fine tip, and ideally smudge-proof and water-proof. I believe the Fisher Space Pen satisfies these conditions. Sharpie makes an ultra-fine tip permanent marker that is a good option (and more readily available to purchase for most people than a space pen). The reason you get TWO Recovery Seed cards is because if you lose your device, you can buy a new device and repopulate the value using your PIN and RECOVERY SEED words. But if you lose your Recovery Seed words, you can never get your value back from a lost, stolen, or malfunctioning Trezor Hardware device.

Now I have to decide if I’m going to load coins onto this device or set up my Ledger Nano S wallet.

My Hardware Wallets Arrive

I recently purchased 2 Hardware Wallets: A Ledger Nano S and a Trezor.

The Trezor package arrived with a holographic factory seal on its top and bottom. The seal tore away but the box itself is fortified with superglue. My bare hands couldn’t disengage the flaps from the box. I used a kitchen knife and scissors to butcher the cardboard and found inside: the Trezor Hardware Wallet device (I bought  a white one), a keychain lanyard, a Micro USB adapter cord, 4 stickers, an instruction card and 2 Recovery Seed cards.
The Ledger Nano S package is stylish, minimalist like an iPhone. I was shocked to see it HAD NO SECURITY SEAL. If I bought this from Amazon.com, I would send it back, but I bought it straight from the factory in France. Maybe only wallets sent to resellers get the security seal? I felt uneasy.

Opening the Nano S package was much easier than Trezor’s. The Nano S box top smoothly lifted off, revealing its contents: the Nano S device, a short USB cable, a lanyard, a keychain, and “instruction booklet”.
The Ledger Nano S “instruction booklet” is a cardboard envelope with 3 tiny cue cards. The first card says “Did You Notice? There is no anti-tampering sticker on this box.”

Uh, yeah, I did notice, thanks for the anxiety attack. The card continues to explain “A cryptographic mechanism checks the integrity of your ledger device’s internal software each time it is powered on. The Secure Element chip prevents any interception or physical replacement attempt. ledger devices are engineered to be tamper proof.” Honestly, if I bought this from Amazon, I would suspect the seller added it to explain the unsealed box, scheming to steal my coins on a tampered device. But it shipped straight from the factory, so I have to believe it’s legit. So the first lesson is: You CAN safely buy the Ledger Nano S from Amazon and save yourself the overseas shipping cost.

The second card instructs how to configure the device, but all it says is “go to start.ledgerwallet.com and follow the instructions to configure your device”. So the second lesson is: If you buy a Ledger Nano S on Amazon, don’t pay more for the (useless) instruction booklet.

The third card is the Recovery Sheet which has 24 blank lines to write your series of recovery words. I figure this will make more sense when I set up my device and move my Bitcoin to it. This is the next thing on my To-Do list.

Buying a Hardware Wallet

The excruciating (but mercifully temporary) inability to log into my cryptocurrency exchange illuminated my need for a hardware wallet to safely store my beloved bitcoin and alt coins. Phone-based wallets exist, but considering the sketchy places I’ve trolled on my phone, it seems a security risk. The safest place to store cryptocurrency is OFFLINE, and that means an unplugged hardware wallet.

A hardware wallet is basically a flash drive. But unlike cheap USB sticks handed out freely at tradeshows and conferences, hardware wallets are more durable and most have additional security features.  The most celebrated hardware wallets by nerds in the know are Trezor, Keepkey, and Ledger Nano S.

These three wallets don’t have an operating system, which means they can’t harbor malware. Apparently, they are safe to use even on a computer that DOES have malware. That’s especially important because you may not even know you have malware.

These three wallets have a Liquid Crystal Display screen which also improves security and makes them easier to use. Apparently wallets without LCD screens rely on inputting information into your computer which is sent to the wallet. If your computer is compromised with malware, the information could be stolen and never make it into your wallet.

Physical buttons on the wallet also let you securely navigate the interface – that means, to make selections and enter passwords. Apparently this is a big security bonus because someone who may be controlling your computer remotely is not able to control physical buttons, and therefore cannot control your hardware wallet (i.e. steal from it). From what I read, it appears the Ledger Nano S and Trezor have physical buttons but the Keepkey does not.

Something to note is NOT ALL WALLETS ACCEPT ALL CRYPTOCURRENCIES. And if you’ve read my earliest posts, you’ll know I have a somewhat diverse portfolio. KeepKey won’t support my Bitcoin Cash, ZCash, Ripple or Monero. Trezor won’t support my Ripple or Monero.  Ledger Nano S is the only wallet supporting Ripple but won’t support Monero (what’s up with no wallets supporting Monero??).

KeepKey not supporting 4 of my cryptocurrencies and lacking physical buttons eliminated it as a possibility. That leaves Trezor and Ledger Nano S.

Ledger Nano S appears to support all my cryptocurrencies except Monero. Bloggers enthuse about Ledger Nano S’s sleek design but I don’t plan to display it. In fact, I plan to hide it.

I did read something about Nano S only holding 3 currencies at a time, which is confusing. The more I read, the more confused I get. Apparently you can load a currency onto Nano S, then erase it and load another, then erase it, until all of your currencies are loaded but only a few can remain on the stick. I also read that the value doesn’t actually RESIDE on the wallet device, which is also hard to comprehend. The idea of ERASING my digital currency freaks me out. I guess I’ll have to buy a Nano S and try it to see for myself. Maybe I really do need to buy a Trezor wallet too so I don’t have to erase anything from the Nano S.

Bloggers encourage purchasing hardware wallets from Amazon.com and rarely discuss buying from the manufacturer’s Website. I suspect Amazon covertly sponsors many blogs.  The trouble with Amazon is the wide price variance for identical products. And many of the vendors have bad ratings, or no ratings, or sell other non-crypto and even non-tech items, which seems unseemly. If I’m buying a device to protect assets worth thousands (maybe hundreds of thousands?) of dollars, I need to believe I’m buying something legitimate.

On Amazon, the Trezor wallet price varies from $99 to $145 – sometimes from the same vendor!  A black version is $99, a white version is $94.99 and a grey version is $145. I can’t imagine anyone would care enough about the color of something so few people would see.  Upon closer inspection it seems like the grey one with the higher price comes with the USB cable, box, and instruction manual, which could account for the $44 difference.

Some vendors accurately identify the Trezor Wallet’s manufacturer as Satoshi Labs. But one vendor says it’s manufactured by Mom Made Foods. WTF?? I need more confidence in my purveyor of crypto security than that. According to many bloggers, you MUST check if your hardware wallet arrives FACTORY SEALED to ensure someone didn’t compromise it. If it doesn’t come factory sealed, you should send it back and get a refund. Also, don’t buy a used wallet.

Amazon has fewer vendors of the Ledger Nano S, but still a wide and confusing mix of prices and product offerings. Some bundle the wallet with a bunch of (seemingly unnecessary) accessories like a carrying case, lanyard, USB cable, Micro USB adapter, and even a ball point pen for almost $150. Some offer just the Ledger Nano S (no cable, no manual) for as low as $72. Personally, I want a manual, and I’m willing to pay extra for it, but I don’t want to buy a bunch of stuff I don’t need. Unfortunately, I don’t know what is necessary and what is superfluous. I’m also concerned that some of the accessories may be after-market and not as durable as the wallet. I don’t want a cable to fail when I’m transferring my digital currency.

It’s not that I don’t trust vendors on Amazon, I don’t trust people in general and prefer to buy directly from the manufacturer. I’m confident the wallet manufacturers will sell what I need: If I need a cable, they will provide an approved cable. If I need a manual, they will provide a manual.

Although I prefer buying directly from the manufacturer, both Trezor and Ledger are overseas and priced in Euros. They both accept payment in Bitcoin which, ironically, I won’t spend because its value keeps appreciating. If Bitcoin’s value was more static, I would enjoy avoiding my credit card’s infuriating foreign currency transaction fees.

In addition to Bitcoin, Trezor’s Website accepts credit cards, while Ledger’s Website accepts credit cards and PayPal.  Both Websites warn their prices do not include taxes and duties. I loathe imagining the hassle of coordinating my  schedule with the delivery guy to write a check for the import tariff. I also wasn’t sure where I put my seldom-used checkbook. Buying from Amazon would be so much more convenient. But that nagging voice in my head (which I’ve regretted ignoring in the past) won me over.  My distrust of online merchants supersedes my lust for convenience.

I decided to buy only one to see how nightmarish the overseas delivery would be. I chose Ledger because it gave 2 non-Bitcoin payment options, and the Ledger Nano S is compatible with 7 of my 8 cryptocurrencies. I wanted to see if I could in fact store them all together on the one stick or if there really was a 3 currency limit. If I could store them all, I wouldn’t need to buy another wallet. If it truly did limit to only 3 currencies, I would store my Ripple, Bitcoin, and Bitcoin Cash onto the Ledger S, and I would buy the Trezor wallet to store my Ethereum, Dash, Litecoin, and ZCash.

I first tried using my credit card on the Ledger site, but the online overseas transaction triggered a security block. So I tried the PayPal option (using the same blocked credit card) and it succeeded. This seemed illogical but I was glad it worked. A confirmation email claimed I would receive my Ledger Nano S in 3 days.  Of course these 3 days fell within the Thanksgiving holiday, complicating calculations of its expected arrival (i.e. when to work at home).  The following Monday I was shocked to see it arrived without any attempt to collect taxes, tariffs or duties. I felt stupid for expecting aggravations.

That night I bought the Trezor wallet from the Trezor Website. The Trezor Website doesn’t accept PayPal, so I first called my credit card company for permission to use my card for an online overseas transaction. The transaction worked, and a confirmation email said to expect my Trezor wallet to arrive in 3 to 5 business days by DHL. I’ve never had a good experience receiving shipments from DHL but I hoped for the best, given the success of my Ledger Nano S purchase.

Four days later, a DHL email announced my package’s scheduled arrival by end of day. I was already at work and considered going home to await the delivery, expecting to write a customs/duty check. When I got home I was shocked to see the package arrived without a request for customs or duty. So it seems if you’re in the continental US purchasing from the Ledger or Trezor Website, you can ignore the stern warning about taxes/tariffs/duties.

Now I’ve got to unpack these wallets. I hope setting them up is as effortless as buying and receiving them.

Barron’s Reads My Blog?

The highly respected weekly financial newspaper Barron’s published a great article “Bitcoin Storms Wall Street” by Avi Salzman on Dec 2, 2017.

This exhaustive, analytical, and well researched article quotes hedge fund managers, derivatives experts, Goldman Sachs analysts and appears to paraphrase one of my blog posts.

The 39th paragraph of this Barron’s article discusses the risks of trading cash-settled Bitcoin futures and uses the SAME ANALOGY I USED COMPARING BITCOIN TO FRIENDSTER! I would like to point out I published my blog post on November 28 (5 days BEFORE the Barron’s article published).

Here’s what I published on Nov 28, 2017: “Bitcoin may have been the first, but it may not be the long term winner.  Do you wish you invested in Facebook? Its IPO was around $32 and today it’s $180. You could have quintupled your money. But before Facebook was MySpace. And before MySpace was Friendster. Friendster was first – do you remember Friendster? Exactly. If you put your money on Friendster, you would have lost. Maybe Bitcoin is Friendster or MySpace. Maybe an altcoin will be the next gold standard and Bitcoin will be the next generation’s punchline.”

Here’s what Barrons published Dec 2, 2017: “A danger is that Bitcoin could end up being the Friendster of the crypto world, while the Facebook – the real winner – may still be in development somewhere.”

Does Avi Salzman read my blog? I am flattered (but a credit or even a heads up would have been nice). If anyone finds other articles that closely resemble what I wrote, please let me know, I find these things gratifying.

Why I Need A Hardware Wallet

Two things recently happened that compel me to search for a cryptocurrency Hardware Wallet. First, I recently discovered all of my cryptocurrency investments are WAY above their purchase price. Second, I was unable to log into my Kraken exchange account.

I’ve never had a problem logging into Kraken before. I figured I must have fat-fingered a digit. I carefully guided my index finger for a second attempt.  When this also failed, I double-checked my hand written note to confirm the login and password. It’s been a few weeks since my last login, so maybe I misremembered my login or password. When that third attempt failed, I felt sick, fearing the worst.

Reaching Kraken’s customer support from OUTSIDE of your account is almost impossible. The Customer Service link sits on the trading dashboard AFTER YOU LOG IN. I tried www.kraken.com/help and got a 404 Error. I tried https://www.kraken.com/help and got a 520 Error. I tried the extensions /CustomerService and /CustomerSupport without success. I googled “Kraken Customer Support” and found a link on Reddit. I clicked that link and logged a generic “locked out of my account” request for help. Within a few hours an email arrived requesting more detailed information to confirm I am the rightful owner of said account. This gave me pause.

The email looked exactly like other messages I’ve received from Kraken customer support when they assisted me with various issues. But panic consumed me: Could this be a clever hacker cloaking themselves to look like legitimate Customer Support? I attempted several more times to log into my account unassisted, but without success. I miserably relented and submitted my vital stats to this seemingly benevolent stranger.

For 3 sleepless nights, I imagined someone effortlessly draining my account. Kraken’s customer support email finally arrived, claiming they have no record of my log in attempts. This seemed impossible and did nothing to relieve my stress. After a momentary mental meltdown, I thought to re-examine the Post-It note harboring my Kraken login and password. I realized I could be misreading one character. I tried another login which succeeded – and I confirmed my portfolio remained as I left it several weeks ago.

Seriously, what IS stopping unscrupulous online pirates from posting fake Customer Support links on a community sites to spoof support emails until they have the info to access your account and steal your coins? How long before you realize you were scammed?

This motivated me to get my crypto portfolio off of the World Wide Hackers Buffet and into a hardware wallet where it can reside in peace and prosperity offline.

Googling “hardware wallet” yields countless blog reviews about the same 3 hardware wallets: TREZOR, Keepkey, and Ledger Nano S. At this point, I must confess my skepticism of bloggers. First I’m damn sure they did not buy these items, they were furnished by the manufacturers. I’m also sure they get paid to say nice things about the products they “review” (i.e. promote) so their opinions are not fully objective. Second, it appears most Bitcoin bloggers either ARE or WERE tech professionals – so what they find “easy” will befuddle a civilian like me.

Now I’m going to research these 3 hardware wallets to decide which best fits my needs before I succumb to paranoid exhaustion.