Farez For Me Podcast Ep 4: What are crypto wallets? Ledgers, Domain and Ethereum Name Service, Apple is a finance company, Roku and Netflix acquisition dance.
Farez For Me Podcast Ep 4: What are crypto wallets? Ledgers, Domain and Ethereum Name Service, Apple is a finance company, Roku and Netflix acquisition dance.
and I'm on a better microphone!
Introduction
Hello friends, welcome to the Farez For Me podcast aka newscast aka young man yells into the cloud.
I’m your host Farez Vadsaria, @farezv on the internet. And now, with a dedicated podcast microphone, the Rode PodMic.
What the podcast is about
On this podcast, I talk about Web 3 concepts and news in the tech, music, cryptocurrency, gaming & general pop culture space in about 15 minutes.
On today’s episode
We explore crypto wallets and their two main types. We’ll talk about hardware wallets such as Ledger and software wallets such as MetaMask. We also chat about how websites resolve addresses, the secret sauce known as Domain Name Service (DNS) and it’s crypto equivalent, the Ethereum Name Service (ENS).
Apple is now becoming a bank. Well, not really but close enough and Roku might be acquired by Netflix who is exploring some avenues to save its decreasing subscribe base.
Concept Explanation
A wallet, is a software, hardware, paper, or Crypto Exchange "store" where cryptocurrency is held. Wallets can have multiple crypto accounts associated with them. Wallets can be "hot" (meaning they’re connected to internet) or "cold" like hardware wallets. Cold wallets are not connected to any internet networks and thereby generally non-susceptible to hacks and scams. I say generally because there’s still basic security principles one must follow when using hardware crypto wallets.
MetaMask is one example of a software wallet which can run on a web browser as a plugin, or on mobile phones as an app.
Coinbase Wallet is yet another such wallet with a couple of additional features such as a human readable account name that’s most likely also associated with your Coinbase account underneath the hood.
Please note, this Coinbase Wallet human readable account name is something like
@farezv, notfarezv.ethwhich is an Ethereum Name Service (ENS) domain. More on ENS domains shortly.
Crypto account addresses have gibberish looking alphanumeric value associated with them. For instance, this is one of my wallet addresses for Ethereum, it reads 0x1bF51ED6cD81dE4449D4Ca3c33822ECC5f3F66a4
Simple to remember right?
If you heard the previous episode, you’ll realize that a wallet address looks like the result of a hash function. In the world of blockchains, wallet addresses and transaction ids all look similar since they are results of hash functions. Different wallet tech has different features such as showing currencies and NFTs on the front end, but on the back end, underneath the hood, a wallet address is just a row on the blockchain database that holds a certain amount of crypto.
A crypto account address is a unique public address on the blockchain for that specific cryptocurrency. My Ethereum address is 0x1bF51ED6cD81dE4449D4Ca3c33822ECC5f3F66a4
Similarly, my Nano cryptocurrency account has a different address and it's nano_3pr9488qndzpaiibk4e9jwcmib5qqpc9wnh4pjjcsfopkahwrjgjeiwmd89p
Wallets have a 1:many relationship with crypto accounts. Meaning if you want to hold 2 crypto currencies, you need to have two different account addresses on that wallet. Crypto exchange accounts "abstract this away" by providing you a single account to see all your crypto from that you sign in using your email but underneath the hood manage all the different accounts for you.
By the way, as someone who works in the authentication space (aka, I work on login software at Discovery+), I can tell you that Web 3 companies using email to login is VERY Web2.
The future of authentication is wallets connected to decentralized apps, aka dApps.
We spoke about dApps in episode 2 regarding decentralization with my ride sharing dApp example.
Why are software wallets vulnerable?
You may have heard a lot about crypto scams and wallets getting drained where people lose their valuable crypto assets such as expensive NFTs. By the way, I have a separate episode I’m preparing to explain Non Fungible Tokens, or NFTs. NFTs can and will disrupt many business models and there’s a lot to cover there, which warrants a separate episode.
These scams happen because software wallets such as MetaMask, or Coinbase Wallet are implemented as browser extensions. Meaning signing for transactions on these wallets is as good as clicking a button which someone can easily do if they have remote access to your computer, or they can install malware using phishing techniques (via scammy emails) or they can redirect you to a legit looking website and get you to click on a button that’s a scammy smart contract.
What is a hardware wallet?
When you create a new wallet, you generate a unique 12, 15 or 24 word seed phrase. This is a list of words that’s the master key so to speak, of your crypto wallet. Depending on the hardware wallet, you may also setup a small PIN to lock the wallet’s day to day usage.
This is different from a password, that your Coinbase account or MetaMask wallet is guarded by. Passwords are good for temporarily restricting access, just like PINs are. Seed phrases lock down the wallet accounts from being installed on any device.
Having a seed phrase means someone can “resurrect” your wallet on any computer or device and access all your accounts associated with that wallet. That’s why it’s imperative to memorize your seed phrase and minimize written copies of your seed phrase. All written copies must be stored securely in a fire and flood proof manner. DO NOT store any digital copies of your seed phrase. That is as good as a software wallet because now anyone who hacks into your computer can copy your seed phrase.
Storing your seed phrase in an envelope in a bank safety deposit box is about as safe as the next group of Ocean’s 11’s vault breaking ability. If you don’t know, Ocean’s 11 is a movie franchise starring Julia Roberts and 11 men.
Hardware wallets are dedicated devices used to generate and store your seed phrase securely, while allowing you to interact with blockchains and dApps in all of the ways you would normally expect. The Ledger is one such wallet.
In a software wallet, the transaction signing process is clicking a couple of UI buttons in a browser extension or tab. In hardware wallets, signing transactions requires clicking physical buttons of a USB drive looking device.
Now you see where we’re going with this?
Hardware wallets are much better at securing your crypto and NFT assets because unless someone has a gun to your head forcing you to sign transactions, there’s no way a hacker could remotely sign your crypto transactions to steal your assets.
Ledger
Ledger.com offers three models, S, X and S Plus and they’re all equally secure as they share the basic principles of hardware wallets.
They’re smart devices, so they have local versions of Ethereum, Bitcoin and other blockchain dapps (aka decentralized apps) running on them, and they vary in their functionality.
The Ledger Nano S has the smallest local memory and is good for NFTs since you only need a couple of blockchains such as Ethereum or Solana for those. A Nano S can hold a handful of apps and is often sold in a bundle if you’d like to secure your crypto assets across multiple hardware wallets.
If you’re planning to expand your crypto portfolio, you’re better off getting the Nano S Plus or the Nano X as both have storage capability for upto 100 apps and 5500+ crypto assets. Difference being that the Nano X has 8 hours of battery life and has bluetooth capability so you can connect your phone and use the Ledger Live mobile app.
By the way, Ledger isn’t sponsoring me, I just like their products and people need to get educated more and more on crypto wallets as seemingly some of the richest NFT people store their valuable crypto assets on vulnerable hot wallets like MetaMask on their phone or computer.
Domain Name Service and Ethereum Name Service
When you type stuff into your browser, like farezv.com for instance, you’re really asking your browser to go fetch the contents of the website farezv.com from where the web server that hosts my website is located.
But where is this web server located and how does the browser know where to look?This is where the Domain Name Service (DNS) comes into play. DNS provides a lookup table that matches human readable web addresses such as google.com and farezv.com to the underlying IP addresses of the web servers where their content is located.
DNS tells your browser where to look.
Similarly, the Ethereum Name Service does that for crypto wallet addresses. Since addresses look like encrypted gibberish (because that’s what they are), it’s hard to talk about them verbally or send them to people via messages as copy/pasting can be risky and sending crypto to the wrong wallet address ensures you’ll lose that money permanently. Remember folks, crypto is decentralized, you can’t complain to anyone to get a refund back.
Hence, Ethereum Name Service provides a nice human readable ethereum domain name to your crypto wallet. Just go on app.ens.domains, login with your wallet and purchase the domain you desire for any number of years.
Keep in mind each domain purchase or renewal transaction charges gas fees so you’re better of buying for a higher number of years.
Not sure what Ethereum gas fees are?
Stay tuned, we’ll go over what that means and how ethereum actually works a couple of episodes later.
In Tech News
Apple is a bank now reports The Verge. If you’ve been on the Apple Store app to see what your latest gadget is priced at, you may have seen these monthly installments that you have an option of paying as opposed to the entire purchase price up front.
That feature is available on the Apple Card, which is a credit card built into the iPhone with a few nifty features like virtual cards for your phone and Apple Watch, and higher than average cash back options for certain brands etc. For the Apple Card, Apple utilizes Goldman Sach’s credit check and lending services.
However for Apple’s Buy Now Pay Later (BNPL) program, it choses to setup its own subsidiary called Apple Financial LLC to provide lending services and will remain separate from Apple’s main business. Bloomberg reports that Apple Financing doesn’t have its own bank charter (so no, Apple’s technically and legally not a bank).Side note, if you’ve seen Season 5 of Billions which is a fantastic TV show, you’ll understand why a bank charter is important. It’s a regulatory document that makes you a legit recession-proof-handout-friendly bank in the eyes of the government.
Roku might get bought by Netflix. Roku’s stock was down 55% earlier in 2022 but has seen a 20% rebound last week as there are whispers of a Netflix acquisition. If you recall, Netflix has lost some subscribers and is exploring strategies around an ad based version where Roku’s ad tech comes in handy, as does it’s 60+ million active users.
They’re exploring password sharing crackdowns so you can’t share the same Netflix account with your ex’s ex and their ex plus all your family and a few friends. Netflix is also trying to venture into live sports and recently green lit a Squid Game reality TV series.
With the recent merger of Warner Brothers and Discovery (my employer), Disney’s rising subscriber numbers, great shows like Seal Team and Scorpion on Paramount+ and of course NBC’s Peacock, I’m curious to see stream wars work out.
Outro
And that’s our episode 4, thank you for listening folks. I’m thinking of dedicating a bonus episode for Apple products and for covering the crypto recession we’re going through recently including how we got here as they’re both exciting and interesting to cover.
If you enjoyed this episode, please rate it on your podcast app. It’ll help the podcast grow. Please also share it on social media and tell your friends and family about it. As always, I’m grateful for your time.
If you have any questions or comments you’d like me to address in a future episode, please leave me a voice note on Anchor.fm/farezv/message.
Follow me on Twitter @farezv. Stay tuned & I’ll see you in the next episode.