Day 98 - Lets get Started...

Security is something that the people of Britain are likely to be thinking about a great deal in the coming weeks and months. The UK is an insecure place, and its about to get worse. Food insecurity, homelessness and labour precarity are already a reality for many.

If you found yourself struggling to survive materially or psychologically over the last decade of austerity, or are confronting the dawning reality that what you assumed was secure can be ripped from under you with alarming speed, you are not alone. The challenge of turning meaningful activity into the means of survival through the traditional economy is becoming harder and harder.

Just like physical migration, most people dont migrate from the traditional economy to crypto as a means of getting rich - when you are wealthy it is always easier to build wealth where you are - but as a means of survival: a recognition that the situation that you are currently in is no longer sustainable and alternatives must be found.

Crypto offers that alternative. The granddaddy of all crypto is Bitcoin - the first, the most secure, the best supported and the most straightforward for the beginner. The rest of this article focuses on bitcoin (other cryptos will be expanded upon in later articles). While interest rates may go up and down and the pound may rise and fall, bitcoin is the most stable currency of all. One bitcoin is always worth one bitcoin: 1/21,000,000th of the total supply.

In crypto you are your own bank, there is no nice man at a call centre to ring up and complain to if you lose your coins. And speaking of "your coins", they are only yours if you hold the private key to them. Not your keys not your coin. The converse however is also true. So long as you hold the private key, those coins are yours and cannot ever be taken from you in dodgy bank charges.

There are thousands of cryptos, but they all work on the same general principle. Once you have understood the basics of bitcoin, the rest are much easier to understand.

Crypto works on a system of public key encription. You have a public key, which your address is derived from, and a private key which allows you access to that address. Technology that stores these public and private keys is called a "wallet". There are two main types of wallet - hot wallets and cold wallets. Your coins are never "in" your wallet in the same way as a pound coin might be in your purse, instead they are held out there in the cryptoverse. "Wallet" is just a metaphor for something that allows you to access them. Losing your wallet is inconvenient but recoverable. Lose your key and you lose your coins.

Hot Wallets
A hot wallet is a wallet which is connected to the internet which can be used to conduct bitcoin transactions. There is a variety available, some for desktop, some for mobile. CryptoBrexit does not recommend the use of web wallets. If you are struggling with the choice available, Electrum and Mycelium are both well regarded in the bitcoin community for their ease of use and features.

Hot wallets store your private key within the software itself. So long as you have the private key, the wallet is dispensable. However most wallets also allow you to save a "seed" - a combination of 24 words that will recover the entire wallet and all the addresses it contains together with their private keys.

Cold Wallets
Cold wallets are off-line storage systems, which keep the private key to a wallet address in a form that isnt connected to the internet. To use the bitcoin held in these wallets, they key has to be transferred to a hot wallet for transactions to take place.

Traditionally, cold wallets have been paper based, but that has a number of disadvantages - paper gets wet, degrades, can catch fire. Steely, for example, offers a steel alternative, which is far more resilient for added security.

Hardware Wallets
Hardware wallets, such as Ledger are a hybrid solution - a dedicated gadget that keeps your coins offline most of the time, but can be connected to the internet when you wish to make a transaction.

These can be pricey, but are generally regarded as the most secure method of storage. If you are considering purchasing one, always purchase direct from the manufacturer, never buy one second hand or from a third party.

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So go ahead, download some software and print off a few paper wallets. Play around and create as many addresses as you need, there are more addresses available than there are atoms in the Milky Way, so dont worry about them running out anytime soon.