In order to bank in the modern era you need a server or two on a service like Digital Ocean or Vultr and of course there are many others (aws, google, linode, etc.) As great as coinbase is, you really want to put yourself in a situation where you are interacting with the blockchain directly.
Well, if you are serious about making money and are ready to make that leap to crypto, ssh keys and running your own wallet. Do ssh keys scare you? Is the amount of new concepts and terms you will have to learn make you not even want to try? Also remember this, if you mess up, there is no 1-800 number to call. There is no company like Bank Of America to help you. Do a few wrong things and poof, money can be lost.
So to understand why you do want to dive in and handle this responsibility yourself, you have to grok this big shift (PARADIGM SHIFT!) from proof-of-work to proof-of-stake. But don’t just roll your eyes at those terms. Stake. What does that mean?
That means the more money you have directly in the system on a server you run, the more chances you have to get rewards. The whole bitcoin mining revolution ran its course. Even etherum ETH is trying to piviot to ETH2.0 and proof-of-stake. Bitcoin BTC and ETH still let you “get rich” by running servers and trading your GPU for coins, but you don’t have to stake anything.
What was the point of Bryon? It was to prove you can upgrade the network.
Why not Goguen together with Shelly? Smart contracts are complex!
Oh is scaling important later on in this evolution?
Governance comes last but it is there? Wonderful.
This new blockchain is Cardano and the currency is ADA.
I pay $80 a month for two servers running in the cloud to give me this: Direct access to the blockchain and the rewards I get for staking real ADA.
Sorry coinbase, but I think I’m ready to move my ADA on to my own server. OR AM I?
Are you? It’s definitely not easy, yet.
But I feel a business could be made around making it much easier.
The real risks are:
What if someone hacks into your server?
What if your hosting company drops you?
What if you lose your private keys?
What if you get sick of this and want to go back to coinbase?
What if I die, should all this be in a trust?
I’ll try and answer how I handle each of these fears:
It can happen. Best defense is lots of little islands. If they hack into one and only get one, that’s an acceptable loss once a year. But don’t get lazy and have everything on just one server.
I mention Digital Ocean and Vultr along with aws, google, linode, etc at the start of this article and wow, there really are hundreds of these. Only have two servers on each so if one rejects your credit card for some reason, no big deal, drop them and put two servers somewhere else.
Your fault. Yeah really you are not ready for this if you need someone to email you back something it was your job to keep.
You might have to hire someone to clean up all your servers and move all your money back.
Yes, and in your will you should leave your private ed25519 ssh keys with a note like: “heirs please have your most capable individual handle these servers carefully and fairly.” What else can you hope for?
But… if you are a programmer and deal with ssh keys every day for your job?
You might decide to take this plunge. And this is where I think a business lies. I’m working on some software to make managing all these servers I have at various cloud providers easier.
I’m working on making a system that lets me backup my private keys without having to write each character out and store them in safety deposit boxes at banks!
What’s a good name for this business? Something about Gen-Xers growing up, being ready to “take the reins” and break free not only from traditional banking… but also moving beyond online wallets and dealing with the fears above, but also the rewards.