The sad state of crypto custody

Not a week goes by without another report of bad news in the crypto world: funds get lost, stolen or compromised with little or no possibility of recovery.

This is a problem we don’t really have with typical fiat money — where our funds and banks are insured. And it highlights how broken the current state of affairs is in the industry.

Ten years in blockchain have already provided a wide range of solutions to host and keep your crypto funds safe.  But can you really trust any of those services?

The risky BYOB promise

You have received or bought your first crypto-currencies and now you need to decide where to keep it safe. Your first option is to be your own bank or “BYOB.” Finally! The dream of any post-modernist society: no more need for intermediaries and greedy banks to manage your funds. You can finally be in charge. But can you?

Yes, blockchains are safer because there are incentive mechanisms aimed at making sure the networks are unbreakable (not “51 percent attacked”). But you need to get your crypto assets somewhere safe. You need to “be your own bank” (BYOB). Crypto custody starts with a requirement: Crypto currencies being encrypted, you need to own and keep your own private keys, which will enable you to sign your transactions and you will own a secret code (a passphrase) that will allow you to recover your funds (a “seed”). The management of this private key and codes is at the origin of nearly all the problems you may have encountered to date.

And it starts with an important problem to solve: the management of the secret passphrase.

If you have ever used any sort of wallet app, you have been exposed to the confusing on-boarding and warnings: 12 or 24 words to remember or “keep safe” and multiple reminders that they are “not a bank” and that you are in charge of your own security. You get a private key to “keep safe.”

But what does “keeping safe” mean? Do you have to print it and keep it under your bed until someone else finds it and accidentally throws it away, or the ink on the paper fades? Do you put it in a safe deposit box… at your bank (at $200 per year on average)? In a vault in Switzerland? Put it in a password manager, protected by a single password or worse in a word document? Encrypt it (again) so no one gets to read it?

Centralization for simplification?

Then you quickly realize that being your own bank is more complex and dangerous than you thought, and you decide to leave your funds on your exchange, which will manage your cryptos for you. It is actually comforting to rely on the security of an established company.

But can you really trust a centralized service? What if they have low reliability or abusive maintenance periods and your funds get stuck when you need them ? What if they get hacked or DDOSed? Or even shut down by authorities (like it may happen in Korea )? Or are simply unreliable or unavailable. And if you thought your funds are better with an exchange, think twice: first they depend on the legacy finance system, and oxygen could be cut off any time.

And what you gain in delegated security you may lose in convenience: Some of those exchanges will not let you withdraw or deposit new coins (because you only trade coins, and not own them). For those who want to participate in ICOs you also will be limited because transfers from exchanges are not accepted.

Sure, if you can afford it, you can decide to place all your crypto funds in a secret air-gapped bunker 30 feet under in Switzerland. Your funds will be safe there, but is that convenient when you may need them handy? Yes, there is a trade-off between absolute security (is there such a thing?) and convenience.

Hardware: a better solution?

Everyone with minimum knowledge will tell you that the best way to solve the problem of storing your crypto funds is to use a hardware wallet (“cold storage”), and certainly it is one of the best solutions to date. Hot wallets ( i.e. software) are more prone to attacks because they are “permanently” connected to the network. But hardware wallets are “air gapped,” meaning not connected by design, until you connect them. So your funds are protected by your hardware key, itself protected by secure hardware elements.

But who protects your hardware key? Where do you keep it? Even hardware deteriorates over time, has software issues or even stolen. Sure, you can always restore your hardware in a new one. But if you can, so can an attacker, and we’re back to the beginning: How do you protect your hardware passphrase phrase? (Read above.) And what you gain in security you lose (significantly) in convenience: You need to be in front of a computer with a micro USB cable to connect your hardware (read above on UX). In the age of mobile, this is not ideal.

How do you make sure your private keys and passphrase/mnemonic codes are safe *over time* when you are in charge. Good luck with that.

Finally you also have to “trust the code.” Those apps also suffer from major vulnerabilities, which result in loss of quasi loss of funds. The reality is that even decentralized services are at risk — because no code is perfect.

Facing crypto fragmentation

One currency, one wallet: this is close to the reality today when you move past the top four or five currencies. You will find some wallets that are supporting up to 10 currencies (and I am not referring to ERC20/ICO tokens). But there are hundreds of chains and forks out there, each with their light wallet. One wallet for NEO, one for MONERO, one for Ripple and so on. There is no solution that can help you host all the main currencies at once (even the top 30), in particular on mobile. This is like getting a different browser for every site, or a different remote control for every TV channel.

Even hardware wallets that support multiple (but not all currencies) have important limitations as you quickly realize they can’t support at once more than a few currencies.

Each crypto service also has its own wallet and more often than not they do not play nice with other services. Most ICO-backed networks have their own wallet: TON (telegram upcoming chain), Crypto Kitties too, exchanges have their own wallets and so on, making it quickly complicated for users to remember where all their assets are stored, but also multiplying the chances of exposures to attacks. Those wallets are not talking to each other except via the transactions pipes for sending assets to each other. It quickly becomes challenging to remember what you own and where. You end up with a list to manage your wallets and private keys. Not ideal.

The current state of crypto custody is forcing users to have multiple assets hosted in various wallets, increasing the risk of exposures. Some users will find in this a security-by-design safeguard: If all your funds are not in the same place, then you are less exposed at once to an attacker. On the other side, you need to invest a lot more in managing all those access points and you lose significantly in convenience.

The responsibility of platforms and manufacturers

No matter how secure the solutions at hand, current crypto custody solutions have another set of weak spots: mobile operators, browsers, app stores and ad platforms have become the main target of hackers to steal your funds.

Hackers are ingenuous at finding ways to hack your mobile phone number, which usually protects your SMS 2FA. Some hackers regularly build fake mobile wallet apps under the nose of Apple and Google and hope to get you fooled to provide your private keys. And finally it has never been easier to buy an ad on Google or Facebook and pretend to be the service you think you need, not mentioning the ingenious social hacks to get you to provide your private key (live example below on Facebook).

Even domain registrars and DNS providers have become targets to hackers and can result in loss of funds.

Those platforms have a critical responsibility and liability in the industry. They can’t ignore it, it is just too important.

And we certainly do not want them to adopt arbitrary rules to ban a whole category of apps or advertisers because of a few rogue players. They need to up their game, learn, follow the space and legit players to prevent or crack down on the attackers with knowledge of what they’re doing.

The same goes for hardware manufacturers: the recent Meltdown and Spectre debacle just showed how exposed we are and how easy it is, even for the savviest users, to get their passwords and keys stolen.

You can trust the blockchain, but can you trust yourself?

Normal human beings are not equipped to deal alone with security, and even less with safety. There are reasons banks have been created and why they are still here today. It is better to trust a network than to trust yourself.

Individuals make mistakes, individuals are the point of failure: Even savvy people can easily make the wrong call about how to keep their private keys or you can end up buying “fake” hardware wallets, your memory could painfully fail you, you may throw away your computer by mistake, forgetting your keys on it. Sometimes it is more subtle than that; you replace your mobile phone and forgot to migrate your 2FA keys.

Some errors can be course corrected, some cannot.

Assuming you found a secure solution, how safe do you feel about it? How safe do you feel keeping at home significantly more money than you can store in your pocket wallet? How would you deal with ransomware, kidnapping? How would you act under duress? Even if your keys are securely protected, do you feel safe walking in the street or even at home with your crypto keys in your pocket or an app that holds a little virtual fortune?

Finally, what would happen to your crypto funds if, like we will all do one day, you die. Did you consider how private accounts should be transmitted?

Can you trust yourself to even consider or deal with all those situations? Those are important issues crypto custody solutions are not addressing yet.

The future is brighter

Custody for cryptos has to be improved; the industry will not grow without it. We need better security — which involves both solution providers and platforms — more convenience and a better approach to safety. This is actually something that prevents institutional money from being poured in the industry and of course if you are a company raising hundreds of millions of dollars in crypto money for an ICO, custody is an even bigger issue (right Kodak?).

Multi-Sig for example is a clear a positive step forward in crypto security (not necessarily in convenience though). The basic idea instead of one single private key (either managed by you or by a centralized service on your behalf), there are 2 sets (or more) of keys that are required to sign transactions: one owned by you and one by the service which operates the custody.

As a user you can delegate some of the responsibility to a “centralized” service without giving full control to it: no more “single point of failure” as the private key is hosted on multiple sides. Another great advancement is the fact that regulated services like Robinhood or Square are jumping in the space and will allow millions of people buy safely crypto currencies and store it for them

Blockchains are safe and secure by design (at least the best ones). But the weak spot is the human being. Human beings, as users or as service designers and operators, are single points of failure. And the blockchains won’t fix that.

The future will bring new solutions where trust can be redefined and programmed thanks to mathematics, cryptography decentralization and game mechanics. The way private keys are managed today is just not good enough. What the industry needs is a set of solutions bringing peace of mind to users.

Maybe banks will at some point jump in the space and bring their own solution, although I really don’t see that happening anytime soon. For this to become reality, a new regulation framework needs to be created.

No matter how many existing services and solutions operate in the space (40 based on my own count), and how much money is being invested in it, crypto custody is one of the biggest unsolved opportunities in the blockchain space (even Naval Ravikant, a prominent crypto investor and thinker, says it) and we’re still pretty much in Jurassic (Crypto) Park.

You can build the fastest and most scalable crypto protocols you want. What’s the point if no one has peace of mind.

Read more: https://techcrunch.com/2018/02/01/the-sad-state-of-crypto-custody/

Meet the new kind of cryptocurrency that’s coming for Bitcoin’s throne

Learn everything you need to know about Ethereum.
Image: Shutterstock / Wit Olszewski

Just to let you know, if you buy something featured here, Mashable might earn an affiliate commission.

You’ve probably heard of Bitcoin, that digital currency and payment system created by a mysterious inventor nearly 10 years ago that eliminates the need for middlemen, i.e. banks, in transactions. But unless you’re deeply embedded in the fields of coding, finance, and/or mathematics, you’re probably not as familiar with Ethereum — and that’s a shame.

Ethereum in its most basic sense is an open-source platform based on blockchain (distributed ledger) technology that can be used to build decentralized applications, according to the Blockgeeks training platform. Sound similar to Bitcoin? It is — well, sort of. 

While both Bitcoin and Ethereum are public blockchain networks, Bitcoin only offers one use of the blockchain technology: a digital monetary system that can be used for online Bitcoin payments. The Ethereum blockchain, on the other hand, uses a more advanced scripting language that allows it to run the programming code of virtually any decentralized app, from title registries to electronic voting systems. What’s more, Ethereum’s cryptocurrency (called the ether) runs on “smart contracts,” a type of blockchain technology that uses an “if:then” system — meaning it can only be traded if certain conditions are met. 

It’s easy to see why Ethereum has quickly become the second most valuable cryptocurrency on the market just two years after its launch. With the help of The Complete Ethereum Blockchain Mastery Bundle, a collection of four online courses taught by Certified Bitcoin Professional Ravinder Deol, you can become an early adopter of this valuable new cryptocurrency and reap the resultant rewards for less than $30.

Take an additional 50% off by using the coupon code BUNDLE50 at checkout.

Here’s what’s included in the bundle: 

Ethereum Blockchain Developer: Build Projects Using Solidity ($125 value)

This 74-lecture course will have you working with Ethereum on a practical level, building projects through step-by-step blueprints using tools like Mist, Geth, and Ethereum Studio. 

Blockchain Technology: A Guide To The Blockchain Ecosystem ($25 value)

If the mere mention of the word “blockchain” has you scratching your head in confusion, don’t fret: This 18-lecture class breaks down everything you need to know about blockchain technology and the ecosystem. 

Ethereum Developer: Build A Decentralized Blockchain App ($195 value)

Got a decent grasp on the basics? Good — you’re all set to get started developing your own decentralized blockchain apps using Solidity 3, Truffle 2, and Angular. This course breaks down the entire process into 38 easily digestible lectures.

Ethereum Developer Masterclass: Build Real-World Projects ($195 value) 

Across some 140 lectures, this advanced (yet student-friendly) class will teach you how to develop a complex, real-world, Ethereum-based distributed application using Solidity. By the time you’ve completed all of its lessons, you’ll have gone through a step-by-step process to create and launch your own initial coin offering upon Ethereum.

FYI: If you decided to buy all of these courses individually, you’d rack up a bill of $610. If you purchase them all together through The Complete Ethereum Blockchain Mastery Bundle, however, you’ll only shell out $29 — a savings of 95 percent. Don’t wait too long, though — this deal is only available for a limited time. You can also take an additional 50 percent off this bundle by using coupon code BUNDLE50 at checkout.

Read more: http://mashable.com/2017/10/17/ethereum-cryptocurrency-online-course/

Meet the millennials making big money riding China’s bitcoin wave

The cryptocurrency may have no physical form but the returns from trading it can be very real and for some theyre worth giving up your job for

On a sunny afternoon in west Beijing, on the auspicious eighth floor of a nondescript concrete high-rise, Huai Yang sits with the curtains drawn in his apartment, making his own luck.

For the past six months, 27-year-old Yang has worked mainly from home, mainly from his sofa, tracking and trading bitcoin, and watching the money roll in. The flat itself is modestly sized; Yang moved in in his pre-bitcoin days when he worked variously for a crowdfunder start-up, a branding consultancy and dabbled in hedge-fund management, all of which he describes as creative financial work. Now, though, his main focus is bitcoin, which is much younger, more fun, and much more money. Yang claims to make up to 1m yuan (116,000) a month, under the radar of the taxman, purely from trading the online cryptocurrency.

Bitcoin has no physical form but the rewards are very tangible; Yangs home is packed full of expensive gadgetry, most prominently a mega-sized flat screen smart board, over a metre wide, which Yang uses to chart bitcoins rise and fall in HD.

Normally, the graphs on Yangs screen show bitcoins and his own fortunes going up and up. At the time of writing, one bitcoin is worth 6,600 yuan (768) recent months have seen the value hover well above 8,000 yuan. The global worth of bitcoin is over $14bn USD (11.3bn), of which over 90% is in yuan, and Yang and his peers are cashing in. I want a more splendid life, he says.

Huai
Huai Yang, who trades bitcoin from his sofa Photograph: Naomi Goddard for the Guardian

Theres certainly big money to be made in bitcoin, but it comes at a high risk. Bitcoin was designed to be a peer-to-peer currency, free from interference from government and central banks. Since the currency was launched in 2009, however, the Chinese market, where government interventions are common, has come to dwarf all others.

One such intervention took place in February this year, when the government warned that there would be serious violations for trading platforms that failed to abide by strict money-laundering regulations. In line with this, OKCoin and Huobi.com, the two biggest exchanges in China, announced that they would be suspending bitcoin withdrawals for one month.

Incidents like these, which Yang sees as not convenient, but not [a] problem, give Chenxing (who asked that I only use his first name) pause for thought. Chenxing, a boyish, skittish 35, has been trading bitcoin for the past four months, after giving up his too comfortable job as a geo-information engineer for the government. The governments pressure on bitcoin platforms is not so easy to understand, he tells me. Im not sure its really about money laundering they try to control [bitcoin], but they cannot.

For Chenxing, its the system itself that is vulnerable: Technology changes every day, he explains. Maybe tomorrow a hacker can find a way to crack bitcoin the security is from mathematics. If you can crack the mathematics, bitcoin is nothing. Thats why, even though Chenxing describes himself as a believer in bitcoin, he doesnt plan to stay involved for the long term.

Its really not a stable thing, he says, both in terms of fluctuating prices and the uncertain technological future of the cryptocurrency. That said, hes still making more money than in his previous government job. In a good month, Chenxing will pocket the cash value of around five bitcoin, which is close to 40,000 yuan, and which Chenxing prefers to have in cold, hard cash.

Chenxing is something of an anomaly in Chinese bitcoin circles, where the general mood is one of evangelical faith in the currencys potential, especially in an economy where the government often devalues the national currency.

Brendan Gibson, 32, is a United States national who has been in China for six years, trading bitcoin for three. Weve barely sat down to talk when Gibson takes my phone and downloads the BTC Wallet app onto it, before transferring me the seeds of my cryptocurrency fortune: 0.0027 bitcoin, worth 2.50, which is the amount that everyone in the world would have if the 21m bitcoin in existence were equally divided up between all 7.8 billion of us. He believes that everybodys aunt or grandma should be using bitcoin.

Brendan
Brendan Gibson: Im just kind of fed up with the system. Photograph: Naomi Goddard for the Guardian

For Gibson, bitcoin is a way of life. He hopes to be completely bank free in the near future. Hailing from the shady mortgage industry of corporate America, Gibson shares Chenxings distrustful attitude, but is more concerned about private banks than bitcoins technological vulnerability. Im just kind of fed up with the system, he tells me over coffee in a slick caf and co-working space from where Gibson does most of his work remotely.

I dont think economies should be built on inflated numbers, and I think its kind of ridiculous that everybody relies on this inflated number in their bank account when its definitely not there bitcoin and other cryptocurrencies are making it so that we are our own banks, and thats one less things we have to worry about. Gibson owns two companies in China, and as far as possible uses bitcoin for all his daily expenses, converting the personal profits he makes into bitcoin to avoid using banks.

One of the commonly cited weaknesses in the bitcoin system is that if you lose your private key to access your bitcoin wallet, the bitcoin within are lost forever. In 2015, it was estimated that up to 30% of all mined bitcoins had been lost, with a value of 625m. Unsurprisingly, plenty of people see this as an opportunity to make some money.

Sun Zeyu, 27, works at a tech start-up based near Beijings university district that specialises in bitcoin. His latest project is Coldlar, an offline, physical wallet that stores users bitcoin and can be accessed by scanning a QR code. Bitcoin security is a tough question, Sun tells me, which is why he and his colleagues designed a product that allows people to circumvent bitcoin platforms and have even greater control over their bitcoin. Now that the value [of bitcoin] is going up, he explains, people really realise the importance of security.

Before, when we just traded one or two coins, people didnt mind, [but] now the value of bitcoin is much bigger. Sun got involved with bitcoin while at university after attending a seminar run by Huobi, one of the biggest trading platforms in China. Like his flashier friend Yang, Sun wanted money, and lots of it. He wont tell me exactly how much he earns, but assures me that its hundreds or thousands times more than the 10,000 yuan per month he was earning when he first dabbled in bitcoin three years ago.

His money comes from both his trading activity and his company salary. With the growth of bitcoin and related products like his Coldlar wallet, Sun believes that in 10 years time, the value of the cryptocurrency will be one bitcoin, one house in Beijing. Minor shocks to the system, like the recent suspension of bitcoin withdrawals in China, are just like breathing, he insists, and the inhalations of profit dwarf any other bumps in the road.

Sun
Sun Zeyu at work. Photograph: Naomi Goddard for the Guardian

Despite the solitary nature of their work, Yang, Sun, Gibson and Chenxing are all sociable creatures. Gibson is connected to hundreds of bitcoin aficionados in China, and has introduced close to 1,000 new people to the technology (although how many are like me, with 2.50 lying dormant in an unused wallet, is unknown), such is his enthusiasm for the cryptocurrency. Chenxing cites the social side of the bitcoin scene in Beijing as one of the main attractions of staying in the industry and the city.

I can meet some fun people who really love bitcoin I think most of the people who like bitcoin are people who like freedom he says. Yang, however, takes a slightly harder-edged approach. He has little patience for sceptics: Yes, bitcoin is a risk. Why should I have to discuss these things with [people concerned about the security]? I earn my money, thats enough. I dont waste my time explaining bitcoin [if] youre not my client. In some ways, Yang concedes, the less people understand bitcoin, the better it is for him. At the moment, the industry is like an ATM for him and his peers, and hes perfectly happy for things to stay that way.

In the fast-changing world of the crypto-currency, nothing seems to stay the same for long. Whether its unpredictable government interventions, or debates within the community about how the industry can and should be scaled, general growth in value thus fair doesnt necessarily suggest anything about the future of bitcoin, despite the faith of its adherents. Gibson makes the point that bitcoin has only been around for nine years; it took PayPal at least 10 to properly catch on.

In Japan it has recently been recognised as legal tender. Its unlikely that the same could ever happen in China, no matter how much its popularity continues to balloon. Chenxing, who has years of insider experience, is sure that [the government] will never accept a thing thats not built by themselves. Many bitcoin traders in China are in it for the long haul, confident that they can ride out any governmental interferences, as long as they have access to the internet. Chenxing, however, is more paranoid. His final thoughts on bitcoin are: I never feel secure.

Read more: https://www.theguardian.com/technology/2017/apr/11/meet-the-millennials-making-big-money-riding-chinas-bitcoin-wave

Meet the millennials making big money riding China’s bitcoin wave

The cryptocurrency may have no physical form but the returns from trading it can be very real and for some theyre worth giving up your job for

On a sunny afternoon in west Beijing, on the auspicious eighth floor of a nondescript concrete high-rise, Huai Yang sits with the curtains drawn in his apartment, making his own luck.

For the past six months, 27-year-old Yang has worked mainly from home, mainly from his sofa, tracking and trading bitcoin, and watching the money roll in. The flat itself is modestly sized; Yang moved in in his pre-bitcoin days when he worked variously for a crowdfunder start-up, a branding consultancy and dabbled in hedge-fund management, all of which he describes as creative financial work. Now, though, his main focus is bitcoin, which is much younger, more fun, and much more money. Yang claims to make up to 1m yuan (116,000) a month, under the radar of the taxman, purely from trading the online cryptocurrency.

Bitcoin has no physical form but the rewards are very tangible; Yangs home is packed full of expensive gadgetry, most prominently a mega-sized flat screen smart board, over a metre wide, which Yang uses to chart bitcoins rise and fall in HD.

Normally, the graphs on Yangs screen show bitcoins and his own fortunes going up and up. At the time of writing, one bitcoin is worth 6,600 yuan (768) recent months have seen the value hover well above 8,000 yuan. The global worth of bitcoin is over $14bn USD (11.3bn), of which over 90% is in yuan, and Yang and his peers are cashing in. I want a more splendid life, he says.

Huai
Huai Yang, who trades bitcoin from his sofa Photograph: Naomi Goddard for the Guardian

Theres certainly big money to be made in bitcoin, but it comes at a high risk. Bitcoin was designed to be a peer-to-peer currency, free from interference from government and central banks. Since the currency was launched in 2009, however, the Chinese market, where government interventions are common, has come to dwarf all others.

One such intervention took place in February this year, when the government warned that there would be serious violations for trading platforms that failed to abide by strict money-laundering regulations. In line with this, OKCoin and Huobi.com, the two biggest exchanges in China, announced that they would be suspending bitcoin withdrawals for one month.

Incidents like these, which Yang sees as not convenient, but not [a] problem, give Chenxing (who asked that I only use his first name) pause for thought. Chenxing, a boyish, skittish 35, has been trading bitcoin for the past four months, after giving up his too comfortable job as a geo-information engineer for the government. The governments pressure on bitcoin platforms is not so easy to understand, he tells me. Im not sure its really about money laundering they try to control [bitcoin], but they cannot.

For Chenxing, its the system itself that is vulnerable: Technology changes every day, he explains. Maybe tomorrow a hacker can find a way to crack bitcoin the security is from mathematics. If you can crack the mathematics, bitcoin is nothing. Thats why, even though Chenxing describes himself as a believer in bitcoin, he doesnt plan to stay involved for the long term.

Its really not a stable thing, he says, both in terms of fluctuating prices and the uncertain technological future of the cryptocurrency. That said, hes still making more money than in his previous government job. In a good month, Chenxing will pocket the cash value of around five bitcoin, which is close to 40,000 yuan, and which Chenxing prefers to have in cold, hard cash.

Chenxing is something of an anomaly in Chinese bitcoin circles, where the general mood is one of evangelical faith in the currencys potential, especially in an economy where the government often devalues the national currency.

Brendan Gibson, 32, is a United States national who has been in China for six years, trading bitcoin for three. Weve barely sat down to talk when Gibson takes my phone and downloads the BTC Wallet app onto it, before transferring me the seeds of my cryptocurrency fortune: 0.0027 bitcoin, worth 2.50, which is the amount that everyone in the world would have if the 21m bitcoin in existence were equally divided up between all 7.8 billion of us. He believes that everybodys aunt or grandma should be using bitcoin.

Brendan
Brendan Gibson: Im just kind of fed up with the system. Photograph: Naomi Goddard for the Guardian

For Gibson, bitcoin is a way of life. He hopes to be completely bank free in the near future. Hailing from the shady mortgage industry of corporate America, Gibson shares Chenxings distrustful attitude, but is more concerned about private banks than bitcoins technological vulnerability. Im just kind of fed up with the system, he tells me over coffee in a slick caf and co-working space from where Gibson does most of his work remotely.

I dont think economies should be built on inflated numbers, and I think its kind of ridiculous that everybody relies on this inflated number in their bank account when its definitely not there bitcoin and other cryptocurrencies are making it so that we are our own banks, and thats one less things we have to worry about. Gibson owns two companies in China, and as far as possible uses bitcoin for all his daily expenses, converting the personal profits he makes into bitcoin to avoid using banks.

One of the commonly cited weaknesses in the bitcoin system is that if you lose your private key to access your bitcoin wallet, the bitcoin within are lost forever. In 2015, it was estimated that up to 30% of all mined bitcoins had been lost, with a value of 625m. Unsurprisingly, plenty of people see this as an opportunity to make some money.

Sun Zeyu, 27, works at a tech start-up based near Beijings university district that specialises in bitcoin. His latest project is Coldlar, an offline, physical wallet that stores users bitcoin and can be accessed by scanning a QR code. Bitcoin security is a tough question, Sun tells me, which is why he and his colleagues designed a product that allows people to circumvent bitcoin platforms and have even greater control over their bitcoin. Now that the value [of bitcoin] is going up, he explains, people really realise the importance of security.

Before, when we just traded one or two coins, people didnt mind, [but] now the value of bitcoin is much bigger. Sun got involved with bitcoin while at university after attending a seminar run by Huobi, one of the biggest trading platforms in China. Like his flashier friend Yang, Sun wanted money, and lots of it. He wont tell me exactly how much he earns, but assures me that its hundreds or thousands times more than the 10,000 yuan per month he was earning when he first dabbled in bitcoin three years ago.

His money comes from both his trading activity and his company salary. With the growth of bitcoin and related products like his Coldlar wallet, Sun believes that in 10 years time, the value of the cryptocurrency will be one bitcoin, one house in Beijing. Minor shocks to the system, like the recent suspension of bitcoin withdrawals in China, are just like breathing, he insists, and the inhalations of profit dwarf any other bumps in the road.

Sun
Sun Zeyu at work. Photograph: Naomi Goddard for the Guardian

Despite the solitary nature of their work, Yang, Sun, Gibson and Chenxing are all sociable creatures. Gibson is connected to hundreds of bitcoin aficionados in China, and has introduced close to 1,000 new people to the technology (although how many are like me, with 2.50 lying dormant in an unused wallet, is unknown), such is his enthusiasm for the cryptocurrency. Chenxing cites the social side of the bitcoin scene in Beijing as one of the main attractions of staying in the industry and the city.

I can meet some fun people who really love bitcoin I think most of the people who like bitcoin are people who like freedom he says. Yang, however, takes a slightly harder-edged approach. He has little patience for sceptics: Yes, bitcoin is a risk. Why should I have to discuss these things with [people concerned about the security]? I earn my money, thats enough. I dont waste my time explaining bitcoin [if] youre not my client. In some ways, Yang concedes, the less people understand bitcoin, the better it is for him. At the moment, the industry is like an ATM for him and his peers, and hes perfectly happy for things to stay that way.

In the fast-changing world of the crypto-currency, nothing seems to stay the same for long. Whether its unpredictable government interventions, or debates within the community about how the industry can and should be scaled, general growth in value thus fair doesnt necessarily suggest anything about the future of bitcoin, despite the faith of its adherents. Gibson makes the point that bitcoin has only been around for nine years; it took PayPal at least 10 to properly catch on.

In Japan it has recently been recognised as legal tender. Its unlikely that the same could ever happen in China, no matter how much its popularity continues to balloon. Chenxing, who has years of insider experience, is sure that [the government] will never accept a thing thats not built by themselves. Many bitcoin traders in China are in it for the long haul, confident that they can ride out any governmental interferences, as long as they have access to the internet. Chenxing, however, is more paranoid. His final thoughts on bitcoin are: I never feel secure.

Read more: https://www.theguardian.com/technology/2017/apr/11/meet-the-millennials-making-big-money-riding-chinas-bitcoin-wave