From cold wallet security to Bitcoin's ultimate dilemma: Why I believe the future of the crypto ecosystem lies with Ethereum?

Written by: 道说区块链

1. What are your views on the recent Ledger cold wallet theft, and how should ordinary people store crypto assets more securely?

On this issue, many people online simply suggest keeping assets on Binance.

This essentially assumes that Binance has better creditworthiness than cold wallet vendors and distribution channels, and is more reliable than managing assets yourself.

I trust open-source cold wallets more; or, to diversify further, I keep part of my assets in an open-source cold wallet and part in a DIY Apple cold wallet.

I would not keep assets on the centralized exchanges well known to Chinese users that many readers mentioned in the comments, because the regulatory oversight of these exchanges is questionable.

But if I had to choose a crypto exchange to store my assets, I would choose a centralized exchange whose operations and regulation are both located in a rule-of-law country and strictly supervised by that country's regulators.

This has always been my principle: if you trust centralized institutions, choose centralized institutions in the countries with the highest creditworthiness and strongest rule of law; if you do not trust centralized institutions, choose a solution where you take full responsibility and bear all consequences yourself.

2. Frankly, I can now calmly accept that BTC may ultimately fail. It came and shone, like our civilization.

I had previously seriously considered this extreme scenario, and after careful reflection I found that I could accept it as well, so I have paid some attention to the recent discussions about Bitcoin risk, but I am not overly worried.

This is precisely because I have considered this extreme scenario that, purely from an investment perspective, I will no longer dollar-cost average into Bitcoin in this cycle (unless it falls back below USD 35,000), and will simply retain my existing holdings.

That said, I believe the probability of this extreme scenario occurring is very small and almost negligible, so the general public does not need to worry too much about it.

3. On Bitcoin application protocols such as Lightning payments and TACIT.

Readers in the comments section mentioned application protocols such as Lightning payments and TACIT.

If we look closely at these protocols, we will find that they all face an awkward situation: trying every possible way to extract the maximum potential from a place with extremely limited conditions.

What this ultimately produces is always a chimera, full of endless patches in every aspect, always facing all kinds of problems in real-world adoption, and solving a small problem often introduces an even larger one.

This is like a foundation that can only support an 8-story building, yet trying every possible way to build a 20-story house on it, requiring it not to fail completely while still being comfortable and usable.

The root cause is that Bitcoin's core is essentially impossible to change. Without changing the core, any protocol built on top of it will end up like this, so the significance is very limited.

Although I deeply admire these teams in spirit, I would rarely consider using them in practical applications.

4. The issue of Bitcoin transaction fees.

This is also a familiar issue, but it is worth revisiting regularly.

As the block reward halving occurs every four years, Bitcoin's rewards will continue to decrease. In the future, once Bitcoin's block reward approaches zero, the maintenance of network security will rely almost entirely on transaction fees.

At that point, if miners are to maintain network security solely through transaction fees, assuming the current technical architecture remains unchanged (which is highly likely), the only solution is for Bitcoin's price to be astronomical; otherwise, miners will have no incentive to mine.

And if Bitcoin's price is to be pushed to an astronomical level in the future, I believe relying solely on Bitcoin's own narrative will certainly not be enough; the crypto ecosystem must have an application ecosystem and commercial scenarios that are truly implemented and generate massive cash flows.

Following this logic, my conclusion is that the future of the crypto ecosystem lies with Ethereum. Only it can support such an ecosystem and use cases, and only it can truly move the crypto ecosystem toward applications and commerce.

Source: 深潮 TechFlow