Cryptocurrency Wallets

Now that you're ready to buy some Cryptocurrency, how do you make sure that you're keeping it in a safe place? Plus how do you make sure it's foolproof for the not so tech-savvy people?

This was our topic for today's podcast, and we break down all of the different kinds of wallets that you can try.

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Here's the Full Transcript:

Erin Gregor:

All right. Welcome to another episode of Clarifying Crypto. I'm Erin Gregor, and I'm joined by my cohost, Gary Leland. Gary, welcome.

Gary Leland:

Howdy, howdy, howdy. I'm glad to be here. Heard you had a little trip there to Disneyland.

Erin Gregor:

We did. So, we're recording this right after Thanksgiving. Yes, I spent Thanksgiving break at Disneyland for two days and Universal Studios. I actually preferred Universal Studios, because they had four Starbucks within Universal Studios. When you're up at the crack of dawn with children, you need coffee. And Disney really failed on the coffee front.

Gary Leland:

Oh, I didn't know that. I didn't know that.

Erin Gregor:

Yeah. You're going to stay at ... They have one Starbucks in each park, and it's going to be probably ... We went on the busiest day probably of the year, but it was like an hour wait to get a Starbucks coffee.

Gary Leland:

Oh my gosh. How much does it cost to get into Disney? Because I know when I went with my kids years ago, I was like, "Man, this is a lot of money!"

Erin Gregor:

I think it was ... So, we got the two-day tickets, but we didn't get the Park Hopper. We just got that one ticket for one park, one ticket for the other the next day. We paid for the MaxPass, which allows you the FastPass and the picture thing, and that was ... It was about $1,000 for two days.

Gary Leland:

I was going to say you almost have to have that FastPass if you want to get anything accomplished.

Erin Gregor:

It was very awesome, but you only are allowed ... You've got to be very strategic about this whole thing, because you're only allowed three selections throughout the day.

Gary Leland:

Oh, really?

Erin Gregor:

Yes.

Gary Leland:

See, at Six Flags here in Arlington, if you get the FastPass, it's all day, every ride.

Erin Gregor:

Yes. Yeah. And that was Universal too. So, if you bought the FastPass at Universal, you got one FastPass on every single ride, but Disney was you only got three. So, you had to be very strategic about it.

Gary Leland:

I bet you there are so many people at Disney that, if you let you do it all day, the people in the regular line never get to ride.

Erin Gregor:

They never get to ride. Exactly.

Gary Leland:

They're in line all day.

Erin Gregor:

Exactly. Because I got on ... So, I got in at 8:00 AM, opened the FastPass to start booking, because ... Then you're only allowed to book one every 90 minutes. So, I pulled up my first one. 8:00 AM, I'm in the park, and one of the rides was already booked out til 2:00 PM.

Gary Leland:

Oh my gosh.

Erin Gregor:

I'm like, okay, I need to get that one. It was crazy. Like I said, we chose probably the worst time to go, but it was good. The kids are six and seven, so they're at that age where they could ride almost all the rides, but it was still ... They still believed Winnie the Pooh was kind of cool to see. You know what I mean?

Gary Leland:

Yeah. Yeah.

Erin Gregor:

Which is going to go away.

Gary Leland:

No, I went with my kids at that age, and they saw Mickey Mouse, and they ran over and hugged him.

Erin Gregor:

Yes.

Gary Leland:

So, that's the age.

Erin Gregor:

Same with me.

Gary Leland:

It's a good age.

Erin Gregor:

Yeah. My daughter, it was cute, because she was pretty pissed that ... She's kind of got my poker face, which doesn't exist. I saw her. She first met Mickey Mouse, and she gives this horrible look like she's pissed off. Mickey Mouse walks away, and she's like, "Why doesn't he talk?" So, she knew that they weren't real, but she was convinced-

Gary Leland:

She was expecting a little more.

Erin Gregor:

She expected a little bit more. But she was so convinced Chewbacca was real and Darth Vader was real, because they actually spoke, or Chewbacca made his noises. She was like, "Mom, I heard Chewbacca. He was real." So, that was cool. She still believed some of it, but she was not going to be fooled by the no talking Mickey Mouse.

Gary Leland:

Disney funny story real quick. The Today Show I think it was was interviewing Mickey Mouse for something, and it was like 8:00 in the morning or whatever. My kids saw Mickey Mouse and took off running with the cameras there, the interview going on, and they gave him a big hug on TV.

Erin Gregor:

Oh, cute.

Gary Leland:

It was like they weren't expecting it. It was kind of messing up the show, they were acting like. Then he had to stop the interview to talk to them for a second so they could leave quietly.

Erin Gregor:

Aww, that's cute though.

Gary Leland:

Yeah. So, it kind of was funny that it messed up their show.

Erin Gregor:

Yeah. I do have bitcoin news, because with Thanksgiving came Black Friday.

Gary Leland:

Yes.

Erin Gregor:

And I learned the hard way that Fold ... We talked about Fold last week, this great app that you can get-

Gary Leland:

I have some Fold news too!

Erin Gregor:

Okay. All right.

Gary Leland:

Sorry.

Erin Gregor:

Well, I'll tell you the Fold news I found out. I can't deny or confirm that I was the one who caused this, but they have a limit of a $750 spend per day. So, all of a sudden-

Gary Leland:

Oh, I didn't know that.

Erin Gregor:

Yes. I was going a little crazy on the shopping and then went to get another gift card, and they were like, "Sorry, you've hit your limit today."

Gary Leland:

Well, I have two stories then.

Erin Gregor:

Okay. Go for it.

Gary Leland:

Number one is I was hitting Amazon, and I bought 300 and ... The first one, I bought 50 by accident, and I said, "Why'd I buy 50?"

Erin Gregor:

[inaudible 00:04:50]

Gary Leland:

So, I bought $300 Folds, and I got cut off. That surprised me the limit's 750, because I got cut off at 350.

Erin Gregor:

I don't think I hit 750 in a day, because I was going back. I'm like, I don't think I spent that much in a day, but ...

Gary Leland:

Did it say 750, and you're cut off?

Erin Gregor:

No. I went after support. I'm like, "What are you guys doing to me? Why am I cut off?" So, I wonder if it was a 24-hour basis. I don't know. 

Gary Leland:

See, I thought it was my credit card that was going ... Not that I couldn't afford the limit, but there are ... Credit card companies are weird on crypto stuff.

Erin Gregor:

Yeah, exactly.  

Gary Leland:

I was thinking maybe they said, "Oh, this is some crypto thing. We're going to shut this down for a little while here." So, I got shut down at 350, and it was late at night, so ... Actually, I think we were talking online, and I was telling you that. You were telling me that something disappeared or something. I said [inaudible 00:05:38]

Erin Gregor:

Yeah. Best Buy disappeared.

Gary Leland:

So, that's the news, but the news that happened to me was we were at Target Saturday night, and we decided to get some Christmas lights. Target had this deal. If you spend $100, you get $50 off, which was 50% off on Christmas lights. So, we ran up there to get some, and we were buying $200 worth for 100. I said, "Wait a second. I've got to buy this. Target's in the Fold app." I'm getting ready to buy stuff at Target. Why not get free bitcoin, right?

Gary Leland:

So, I downloaded my thing, and I get up there, and I go just, "Here's the code," because they give a barcode. Some of them don't give a barcode. They just give a ... Like, Chipotle doesn't give a barcode, just the numbers. They couldn't get it to work, and they got the manager, and he couldn't get it to work. They got the next manager. He couldn't get it to work.

Gary Leland:

I said, "I know this works. I've used this everywhere." And he goes, "It says to log into the site." I said, "I think that's if I want to buy from Target online." He goes, "Well, just log in and see what happens." When I logged in, it said, "What's your account?" My wife was there, and I said, "What's your account number?" She gave it to me, and wham. There was my barcode.

Gary Leland:

If you ever go to Target, just to let you know, and you buy that, so you don't get all frustrated up at the counter, going, "How come I can't get this to work? I just spent $100 on this Target gift card," you've got to log into the Target website as a member to get your barcode. I didn't know that.

Erin Gregor:

No. So, JJ ran into the ... My husband ran into the exact same problem over the weekend. He was running to Target, and I'm like, "You can't ..." I'm like obsessed now. I'm like, "You can't buy anything without going onto Fold. Don't do it." So, he's like, "That Fold is kind of a pain." He was kind of mad at me, because he got up there, and they were like, "I can't ..." But he had to log into the app. So, it is a good thing to know, because yeah.

Gary Leland:

My wife is going, "Well, I have a Target credit card, and I get 5% off of that." I said, "No, no. We're not doing that. We're getting some bitcoin here."

Erin Gregor:

I know.

Gary Leland:

She's going, "Why are we doing that instead of just taking 5%?" And I said, "Kathy, because it has a chance to go up."

Erin Gregor:

Exactly.

Gary Leland:

But it could go down too, right? [inaudible 00:07:48] It could.

Erin Gregor:

It could. No, but we're Starbucks obsessed, and so I'm like, "Don't you ever automatic reload your card ever again. You always go through Fold." I'm like, "Promise me, JJ. Promise me!" He's like, "I promise!" So, all right. But, so, we've to the limit. This will go out before Christmas, so hopefully some people can take advantage of shopping via Fold.

Erin Gregor:

You've got your podcast four-minute crypto. Anything in the news that's coming up that we should be aware of, or any ...

Gary Leland:

Well, it's kind of an interesting story, because I have two stories back to back. Yesterday, I did a story about the governor of Georgia had to pick someone to be a senator, because the senator that is in the seat right now is retiring due to illness, I think. So, he picked a lady named Kelly Loeffler who is the president of Bakkt, or Bakkt, however you pronounce that. I don't know if you're familiar with that. You have the New York Stock Exchange.

Erin Gregor:

Yeah.

Gary Leland:

You're familiar with that.

Erin Gregor:

Yep.

Gary Leland:

That's owned by a company called Intercontinental Exchange, or they call it ICE. It's a bad nickname for ICE with all that's going on, but it's the Intercontinental Exchange that owns the New York Stock Exchange. They opened maybe about four months ago Bakkt, B-A-K-K-T, which is a industrial site for people to get into bitcoin basically. So, it's kind of cool in itself that the company who owns the New York Stock Exchange has opened a bitcoin fund type thing. I don't know if a fund would be the proper name to call it, but anyway.

Gary Leland:

The president of Bakkt, of the bitcoin thing, is Kelly Loeffler who just got appointed for Senate in Georgia. So, now we have someone in the Senate who loves bitcoin and understands it. That's kind of cool.

Erin Gregor:

That is very cool.

Gary Leland:

Then again, when I posted it, a lot of people had different opinions on her politics as to whether she should have been appointed because of her politics. Trump, I don't think, was in favor of her appointment. But, anyway, she's in there now.

Gary Leland:

Then today it was the news came out that Sunday ... No, yesterday. Excuse me. Yesterday was the biggest day for Bakkt investment trading. They did 4,400 bitcoins were purchased through them.

Erin Gregor:

Wow.

Gary Leland:

So, that's their biggest day yet, but it's almost like every day has been their biggest day for like the last weeks. That's really taken a lot of force on. Yesterday, through Bakkt, 4,400 bitcoins were sold through this. It's regulated enough that SEC, the Securities Exchange Commission, has approved them. So, it's kind of a big deal.

Erin Gregor:

Yeah. Well, let me ask this, and this might be a ... This is just out of ignorance. I know this is kind of out of the blue. But has there been other currencies that have been introduced ... Basically crypto is a new type of currency, right?

Gary Leland:

Yeah.

Erin Gregor:

Has there been something that's not government-backed, like the EU or whatever, but that's come out where it has gone kind of mainstream like we're seeing happen? You know what I'm saying? A currency [crosstalk 00:11:01]

Gary Leland:

I don't know if there's any that that's ever come out that hasn't been backed by a government, because, until bitcoin came out, everything had to be backed by something. Even if it was backed by gold, it still had to have a government that had enough gold ... Someone had enough gold on hand. There really aren't a lot of people sitting on 10,000 tons of gold, or whatever it is. So, maybe there was in the ancient days. I don't know. But as of modern history, I don't think there has been. I think because of the fact that the blockchain was a way to regulate it, it's the first one.

Erin Gregor:

So, this is pretty cool that this currency has been introduced and actually has been picked up by all these places, and it's becoming serious. Another good reason to take note of it, to be interested in it, like you said even ... Again, we're not financial advisors. We're not telling you what to do. But even that 1% ... Because you just never know what's going to happen with this. It's not a fly-by-night thing.

Gary Leland:

New bitcoins are made, but I think there's only ... I'd have to do my math real quick. 3,000 bitcoins left to be made-

Erin Gregor:

Really?

Gary Leland:

... in the next 110 years, 115 years.

Erin Gregor:

Wow.

Gary Leland:

So, those 3,000 bitcoins will come out over the period of 115 years. This is the first time we're at the point, because over 18 million have been made. So, three million, not 3,000. Three million. But this is the first time we've been at the point where there's not very many being made as we're hitting that point, that the majority of them have been created already. The numbers are going to stay pretty stagnant. It's not rising. It doesn't have a long way to rise, since there is 18 million out now and there will only be 21 million. Then, like I said, like I was saying, the 21 millionth won't come out til the year 2140 or something.

Erin Gregor:

Yeah, wow.

Gary Leland:

So, it's a long time for the three million.

Erin Gregor:

Yeah. That's awesome.

Gary Leland:

We'll see it. That's why I'm a believer is just because it's a limited amount.

Erin Gregor:

Yeah, exactly. Today we want to cover wallets, because I think ... I know for me this was a new concept. This kind of adds a little bit of difficulty to the process of investing. It can turn people off a little bit. When it comes to wallets, can you explain ... I know we've talked about this, but since this episode is specifically around wallets, can you explain why someone needs a wallet if you're investing in bitcoin?

Gary Leland:

All right. Well, every time you've seen a story, which everybody's seen or heard, of bitcoin being stolen or bitcoin being hacked or something like that ... Well, bitcoin's never been hacked, but people buy bitcoin, and they leave it on an exchange, a lot of people do. They leave it where they bought it at.

Gary Leland:

So, they went to Coinbase or Binance, wherever they bought some bitcoin, and they just said, "Oh, I own it now. I'll leave it in my bank account." But it's not really a bank account. It's not insured like a bank account is, and that's where everything gets stolen. If anything's going to get stolen, it's normally from there. All these people leave all this bitcoin on an exchange. It's a honeypot, and that's where hackers are going after, looking for low security. So, you don't want to leave it on there.

Gary Leland:

Your alternative is to move it off of an exchange and to put it in some kind of wallet. A better name for that would really be a key chain than a wallet.

Erin Gregor:

Well, yeah, because you said it's not even that you're moving the bitcoin over; you're moving the key you've talked about, the key to that bitcoin. And that's just a code basically of-

Gary Leland:

A set of numbers.

Erin Gregor:

A set of numbers.

Gary Leland:

A set of numbers and letters, yes. So, you're moving that over, and that shows who basically owns the bitcoin that shows you own the bitcoin or is proof of that, that you own the bitcoin, for the most part. But that's why you want a wallet is so you can ... A wallet is much safer than an exchange, but there are different levels of safety in wallets. Some wallets are more safe than others, and that's why I made us a list here of different wallets. I thought we'd go over the list, and I can tell you which ones I use maybe, not that that means anything, but I've been happy with them, or I would have switched. And the different types.

Erin Gregor:

So, I thought there were four different types. You've listed out five different types. Can we talk about-

Gary Leland:

Well, and actually we're not even talking about lightning wallets. We could have got into the lightning wallets too. I just want to ... Purely bitcoin wallets.

Erin Gregor:

Okay. Let's go safest, or actually ... Yeah. Let's go safest to kind of the least safest. Would that work?

Gary Leland:

Mm-hmm (affirmative).

Erin Gregor:

Where you want to be uber-protected. I know for me I went with a ... I think Trezor's a hardware, right?

Gary Leland:

Yes.

Erin Gregor:

Yeah. I went with that, because I don't trust myself with viruses. I have a Mac, so I'm pretty good. But what I was worried about was a computer crashing or my phone crashing. So, I wanted the hardware thing just to be super safe. It's hard-

Gary Leland:

I use the Trezor now too. Yeah.

Erin Gregor:

Okay. Is hardware the safest or-

Gary Leland:

No. No, it's not.

Erin Gregor:

Okay. What's the safest?

Gary Leland:

A paper wallet is the safest.

Erin Gregor:

Paper will be. Okay.

Gary Leland:

Actually, what they call a memory wallet would be the safest. It's memorizing everything. They call that a paper wallet, I mean, a memory wallet. I just call it memorization. I don't think it technically ... But if you were going from China to the United States trying to get out of there with your money, and you put your money all into bitcoin because you can't take money out of Hong Kong ... I've got $5 million. I can't leave Hong Kong with my $5 million here, and the bank won't let me take it. And you've bought bitcoin. Well, you probably aren't going to get out of the country with a Trezor. You might not even get out the wallet with a piece of paper without them looking at it. So, you'd memorize all your information. That would be the safest. But a paper wallet is actually the safest of the wallets.

Erin Gregor:

So, what is a paper ... If you were to describe a paper wallet, is it a piece of paper, or what is it?

Gary Leland:

Yes. It is a piece of paper.

Erin Gregor:

Really?

Gary Leland:

Yeah. You go to a place like ... Where did I put ... Did I not put ... Yeah, you got to bitpaperwallet.org. That's one for an example. You go there, and you can put in ... You can get keys from them. I've never done it, but you use it with the bit address. When you go to bit address, it shows you ... It's like a set of numbers that you can't read that are moving. I'm not sure how it works, but it's a lot of encryption. Then you can memorize, I assume, the passwords that goes with the piece of paper to use the piece of paper and log in and scan the barcode on the piece of paper. The piece of paper is a QR code, not a barcode. So, you can go from there.

Gary Leland:

But it's a way of scanning ... Now that I'm thinking about it more, you scan the QR code somehow, and then it sets a number up that goes on the piece of paper. Then you pull it out. So, it's all synced.

Erin Gregor:

It's the safest, but, if you lose that piece of paper, are you screwed?

Gary Leland:

Yes.

Erin Gregor:

Okay.

Gary Leland:

You'd want to make copies of that piece of paper. That's why I said, if you're leaving Hong Kong and you had a paper wallet, and you took your paper wallet, you might be screwed.

Erin Gregor:

Okay. Because if somebody gets ahold of that key, they can access your bitcoin, correct?

Gary Leland:

Right. Right.

Erin Gregor:

Okay.

Gary Leland:

But they can't access it online. So, you have a different kind of fear. You've got the $5 wrench attack, as I told you last week, because that's the only way someone's getting your money is if they come up to you with a wrench and say, "I'm going to hit you in your head and take your bitcoin." You're saying, "Here's my piece of paper." They might be sitting there going, "What in the hell is this?" If they're not even familiar with them. But that's all you ... At least you've eliminated all online attacks of any kind.

Erin Gregor:

Okay. [crosstalk 00:18:47]

Gary Leland:

So, that's why they say it's the safest, because all of them have that same problem is getting hit in the head with a wrench and someone taking your stuff. That's it. That's when people don't even ... Many people don't even know there's such a thing as a paper wallet. I've never used it personally, but I was in a discussion with someone last week. He had, I guess, like 30 bitcoins, and he was real paranoid. Him and his wife spent all day doing it, setting up one paper wallet per bitcoin, making all of these paper wallets so that ... I don't know what their thought was. If they get robbed, they could give the guy or give the guy two of them and then still have their bitcoin left. Or, if they were putting them in different places, different safety deposit boxes. But he was really into security. He was one of these ones that believed if bitcoin becomes the international currency of the world that the US government will come take your bitcoin because they don't have enough. Like they did with gold back in the '40s or whatever.

Erin Gregor:

So, the paper protects you from that. Does it protect you from that?

Gary Leland:

From online. It protects you from online.

Erin Gregor:

From the US coming and grabbing it?

Gary Leland:

Yeah, unless you give them your piece of paper.

Erin Gregor:

They can still see you own it, right? Yeah.

Gary Leland:

Right. Well, if you put it ... There's ways to do that. You can put it in a mixer and stuff like that and move it around. I don't know how far they really do track you. I know a friend of mine owns the ATM machines, Coinsource, and they track all coins moves for six moves, six hops. So, I don't know how far back they'd actually go and hop you. I guess you could move it around a lot. And no one would know whose paper wallet was you moved it to. Well, they know I guess you sold it to John Smith, and they'd just go, "Here's a wallet that it went to, and we don't know whose wallet it is," because you're not putting that wallet address on the website, and you're not putting your name that's your wallet. So, they wouldn't know.

Gary Leland:

I guess if you moved 30 of them, they're like, "He did ..." Or whatever, in one day. They would kind of figure it out. I think you'd want to do it ... I think if you did, I'm not telling you how to do that-

Erin Gregor:

Space that out?

Gary Leland:

You'd want to do one here, do one there, for a different amount so it'd look like you were making transfers. I don't think you'd want to do 30 of them in one day. Then they would be pretty easy to figure out.

Erin Gregor:

Okay. Sorry, I had a kid wanting to show me she's done with her homework. I bribed her with the possibly of getting a cat tomorrow, so she's doing her homework.

Gary Leland:

That's a smart move. Oh, but you don't have to get a cat.

Erin Gregor:

Well, it's a Christmas present. I promised her. Okay. So, hardware. That's the next step up. It's a little bit safer. It's not on a piece of paper. I still haven't put my Trezor or my ... Trezor? Trezor? Is that how you say it?

Gary Leland:

That's how I say it.

Erin Gregor:

Okay. If you see the video I'm holding up, it's T-R-E-Z-O-R. It's a piece of hardware that you can put your keys of your crypto. I know you personally use this one, correct?

Gary Leland:

Yes. Correct.

Erin Gregor:

Okay. This is basically you're taking the keys, you're putting them on the ... I kind of look at it like a USB drive. Your data's on there. So, again, this would be where you don't want it just lying around your house. You want it in a safe place, because you want to be able to protect the keys, and you're essentially protecting this piece of hardware.

Gary Leland:

The thing that's good about the Trezor though, and it's not the only wallet that does this, is you have a screen on there. When I go to access and transfer bitcoin, and it says ... And I go to get it live, but I don't have to ... Because you've got to plug it in the computer. So, when I go to get it online so I can transfer bitcoin to it, I don't have to use my computer screen to enter the password. If someone has maliciously sent me a virus that they're able to see my screen, whatever I'm putting in there ... I forget what those are called, but do you know what I'm talking about?

Erin Gregor:

Yeah. Yeah.

Gary Leland:

They can see everything you're doing. Well, they can't see my password, because I'm putting it in with another device. That makes that a little more secure, because now ... Okay, put in your password. I put in blah, blah, blah, blah, blah, but I'm not doing it on the screen. So, they have no idea what I'm putting in. And the screen, every time I put it in where the numbers are, the pattern movies. One time, the one might be on the top left. The next time it might be in the middle. The next time that maybe on the top right. So, you have to look at the screen and say, "There's the numbers," and then punch it in. It even changes every time. It's a pretty secured method of doing it.

Erin Gregor:

Okay. The Ledge you put is another one. Now, does everybody have that feature where you can kind of-

Gary Leland:

Well, the Ledger now has that feature now too. They both have that feature.

Erin Gregor:

Okay. Have you used the Ledger personally?

Gary Leland:

I haven't, but I just ordered for them, so I ordered some of those.

Erin Gregor:

So, you were talking too, just as a strategy ... I know you talked about this last week after talking to somebody. You're going to start, almost like the guy did with the ... Not as extreme, but you're going to start kind of diversifying your bitcoin, right?

Gary Leland:

Yeah.

Erin Gregor:

It's not going to be all in one place.

Gary Leland:

Yeah.

Erin Gregor:

Probably not a bad idea to do.

Gary Leland:

Yeah. Then if someone does come over ... I don't think whoever's coming over is going to be listening to this podcast probably. So, if someone did come over, I could hand them ... With a pipe, I could say, "Okay, here's my Ledger." Then I'm covered. They'll go, "Thank you," and get out of Dodge. Now you'll go, "Okay, they didn't get all of my bitcoin."

Gary Leland:

Because that's the only thing is ... It's like you go right now down a neighborhood. This is the thought of people. You go down a neighborhood right now, and you see the guy ... I've got a guy in my neighborhood has a 14,000-square-foot house. I mean, this thing is ... It looks like a palace. And you know this guy's got a lot of money, but no one goes up to him and says, "Hey, I want your money," because it's not in his house.

Erin Gregor:

Exactly.

Gary Leland:

They aren't going, "We're going to go to the bank and get your money." He doesn't have any security. He drives in and out of his gate just like I do, but he has a bigger gate and a better car. So, he's safe, because his money's not there.

Gary Leland:

But in the case of bitcoin, if bitcoin got to be worth a couple hundred thousand a coin, then people, being us, you might have a couple of million dollars in this house. It's better than cash.

Erin Gregor:

Exactly. Exactly.

Gary Leland:

That's why a lot of people who believe that's what's going to happen with bitcoin are so security conscious.

Erin Gregor:

Okay. No, and you should be, because, like we said, it's not an insured thing. You don't want it just sitting around. You want to take care of it. You want to protect it. These are good from a perspective of you put these in a security box, whatever you want to do with them, but keep them stashed away so fire can't burn them or anything like that.

Gary Leland:

There are even now devices for ... With the Trezor or Ledger, you have a pneumonic phrase that will allow you to access and rebuild your account on another Trezor. So, if your Trezor did get blown up, it did get put down in a fire, as long as you have the 24-word pneumonic phrase that they give you, you can rebuild a new Trezor. But if you had that in the same place as you had your Trezor, and your house caught on fire and they both burned up, you're really screwed.

Gary Leland:

So, there are people now ... There are devices made out of steel that come with etching pens so you can etch your pneumonic phrase, the 24 words, into the piece of steel. Then, if your house catches on fire, you can still go pick up that piece of steel and rebuild your whole account.

Erin Gregor:

I was going to ask a question, but I'll wait to ask it. Okay. So, moving up, is mobile the next safest?

Gary Leland:

No. Mobile is not. Your desktop would be safer than a mobile.

Erin Gregor:

Okay. Desktop would be the next.

Gary Leland:

I think. Yeah. Yeah.

Erin Gregor:

Okay. This sits on your ... Now, do you have to worry ... If it's sitting on a desktop, you have Armory and Exodus as two potential wallets that sit on your desktop.

Gary Leland:

Yes, and I've never used Armory, so ... But I know the people involved with it, and I know they're security bugs.

Erin Gregor:

So, you know there are security bugs?

Gary Leland:

No. I know they are. They are really into security. I shouldn't say bugs. They're really into security.

Erin Gregor:

If my computer were to get a virus, I'm assuming the same rule applies if it were to crash, just like, if I have that code, I can probably get-

Gary Leland:

Right.

Erin Gregor:

Okay. So, the crash isn't-

Gary Leland:

You'll have a pneumonic phrase, so you could rebuild it if you lost your hard drive.

Erin Gregor:

Okay. So, crashing is not as scary, but is a virus scary? If I've got bitcoin sitting on this desktop app on my computer, is that what I have to be most worried about with this wallet?

Gary Leland:

Well, if someone's got a keystroke on, if someone's put a keystroke on your device where they can come in there and watch you go to your wallet and type in your passwords to get in, yeah. Then it can do the same thing. So, that's what you're kind of worried about. And one thing you can do ... I think there are different kind of keystroke viruses, ones that maybe go on your computer as a whole, but some of them go on the browser. So, maybe you want to take one browser and have two browsers on your computer, and have like Chrome, which you know is open, everything on there-

Erin Gregor:

Exactly.

Gary Leland:

... and just use that for your daily activities. But then pull up something like Brave or Outlook or something else, and only use that for your wallet.

Erin Gregor:

For your crypto. Okay.

Gary Leland:

Or whatever. So, I use Brave, and I go to four things. That's all I go to. I never go to another website on that browser. I won't get a keystroke on the browser. I can still get it on my whole computer, but it cut out another bug possibility. That's what I would recommend, if you're going to do it. Everybody's got two browsers. That's not hard to get two browsers. Use the one just for that purpose.

Erin Gregor:

Do you have a recommendation ... Obviously the more secure ... For the hodler, the people hanging on for a while, versus the people who actually want to shop with this, I'm assuming ... So, we still have online and mobile, and I was-

Gary Leland:

Those are going to be the easiest for shopping.

Erin Gregor:

To shop with. Okay. So, that's what you'd use a wallet-

Gary Leland:

Now, I keep some in my online and some in my mobile for shopping purposes and in my storage. That's why. So, if someone does break in, they're not going to get that much, but they are going to get a little bit of money. Maybe they get $1,000 or something.

Erin Gregor:

So, you've got online. You've got GreenAddress and Electrum. I'm assuming our worries on this are still hackers [crosstalk 00:29:12]

Gary Leland:

They're the most, yes. It's just like an exchange, for the most part, except it's not as big of a honeypot.

Erin Gregor:

Okay. So, you should still be worrying. Online's just ... It's as susceptible as the brokerages, but it's not as big of a target. Is that kind of how it works?

Gary Leland:

That's what I would think. I've never used an online wallet. We were naming all the kinds, so I just wanted to include it in here.

Erin Gregor:

No, absolutely.

Gary Leland:

But I would think, since it is online and since we know that a lot of people are storing their bitcoin there, it's kind of a honeypot. And maybe it could be a bigger honeypot than an exchange, if you really think about it, if it was like a great wallet.

Erin Gregor:

Do they give you a key, like the code you were talking about? Do they give you one of those too?

Gary Leland:

That, I don't know. I've never used one. So, I can't speak from experience on that.

Erin Gregor:

Okay. So, it's another option, but probably not one ...

Gary Leland:

Yeah. That would be the least ... If I was going to go through the trouble to take my crypto off an exchange, I wouldn't move it to another online site, because it'd be just as hard to do that as it is anything else. You might as well just go with the one that's safer.

Erin Gregor:

Why do people use it then? Do you know the reasons?

Gary Leland:

I don't know. I don't know. I don't know.

Erin Gregor:

Okay. All right.

Gary Leland:

I don't know anything about it. I know as much about those as I do paper wallets. I just know they exist and the basics of them.

Erin Gregor:

Okay.

Gary Leland:

So, I'm not going to be very informative on those. Like I said, if I use something, I know a good bit about it, I feel like. But when you don't use it ... If you don't believe in it, you don't use it. And I've never wanted to figure out paper wallets.

Erin Gregor:

Exactly. Well, yeah.

Gary Leland:

It's kind of weird, even to me, and I've known about them for a few years.

Erin Gregor:

Yeah. Well, no, this is work. It's not something that you can go just "All right, it's super easy." It does take some figuring out and some research.

Gary Leland:

The Winklevoss brothers who we talked about last week, and they're billionaires from bitcoin. If you read the book Bitcoin Billionaires, which is a great read, they, when they bought their bitcoin, took that ... This is crazy. They took their bitcoin. It was on a wallet or something, however, they transported it. Went and got a room, took out all electrical devices out of their room, iPads, iPhones, and everything, covered up the windows with sheets, bought a brand new printer, printed off paper wallets for their bitcoin, then destroyed the printer. And they got a brand new router that they used. They destroyed the router, because traces can be left in these things.

Erin Gregor:

Wow. Right.

Gary Leland:

Then they cut, I think, the paper up into four parts, the paper wallets-

Erin Gregor:

Wow.

Gary Leland:

... and hid those in different, not safes, but different safety deposit boxes.

Erin Gregor:

Wow.

Gary Leland:

So, you would actually not be able to get it from any of the things they used, and then you'd have to break into multiple safety deposit boxes to get their bitcoin addresses. And even if you came at them with the lead pipe wrench, they're going to have to go to four banks.

Erin Gregor:

Exactly. Exactly. It's probably not worth the effort. Wow. That's impressive.

Gary Leland:

So, they were really security conscious. This was a long time ago when bitcoin was in the $30 range or something.

Erin Gregor:

We've talked about it too. There's bitcoin just sitting in landfills because people would, I'm assuming, put it on these wallets, or put it on your computer, and just throw it away, not thinking anything of it.

Gary Leland:

Yeah. Yeah. I saw the other day someone was going through some sites, and he found out he had a bitcoin and a half on a website exchange he didn't even know was there. It had been there six, seven years.

Erin Gregor:

Wow.

Gary Leland:

When he got it, it was so small an amount it wasn't even worth transferring.

Erin Gregor:

Wow.

Gary Leland:

Today, it's 10 grand. It was sitting on an online exchange that he had left it there for six years.

Erin Gregor:

That's crazy.

Gary Leland:

He was really excited.

Erin Gregor:

Yeah. I would have been too. I need one of those like, "Oh, I wish I could have found that." So, our last one is mobile. You've got Edge and Exodus. These sit on your phone. Now, do I have to worry about ... Because I've heard stories about this. If somebody were to steal my SIM card or steal my phone-

Gary Leland:

It's called SIM swapping. It's called SIM swapping.

Erin Gregor:

Okay. Do I need to be worried about that with bitcoins on my phone?

Gary Leland:

What they do is they contact your phone company, and they say, "Hey, I've lost my phone. I bought a new one, and I need to have a new card put in with my old phone number." Then somehow or another, whether they talk them into it or whether they have a cohort on the inside of the phone company working with them, they get your phone number transferred over to a new phone. Now they can go to your Gmail account, because they can go into Gmail and say, "I lost my account," and Gmail will text them a number to gain access to prove it's them.

Gary Leland:

Now they can gain your Gmail, and now they can go through your Gmail, looking for bitcoin words, until they find out what you use. Then they can go there and kind of do the same thing, saying, "I've lost a password." They'll send a password to their email which they've got now, because they got that from ... So, it's kind of a route how they do it. It's not really that they steal your bitcoin from there, but they use the information, the access to the information, to steal your bitcoin. You know Mark Hopkins, right?

Erin Gregor:

Yes.

Gary Leland:

This happened to him recently, real recently.

Erin Gregor:

Really?

Gary Leland:

Yeah. He was on my show afterwards. He was sitting there on his phone in bed at 10:00, and all of a sudden his phone didn't work. He was like, "That's crazy." So, he said, "Hey, does your phone ..." To his wife and kid. They went, "Yeah." Their phones work, and his didn't. So, he got right on the phone, because he suspected it was someone had SIM swapped and it was. Someone had taken over his phone and gotten his phone number transferred to their phone. He shut it down right away. They weren't able to access anything. I think he went in and started shutting down all kinds of stuff, but he got that shut down.

Gary Leland:

I'm trying to think if it was him. I think it was Mark, but I think he had someone in New Jersey or somewhere who worked at an AT&T. I'm not going to say AT&T, because I don't know that it was AT&T. Excuse me.

Erin Gregor:

Mobile carrier.

Gary Leland:

Worked at a mobile carrier. Someone went in and worked with the manager, and the manager of the mobile carrier store was in cahoots. Mark has on his, like I do ... If they call and try to get it transferred, I have a precaution where no one can transfer mine unless they come in the physical store and have an ID.

Erin Gregor:

Wow.

Gary Leland:

That's what you do. You call up, and you say, "I am at risk. I'm an at risk person for being hacked. I need to have this put in place," and then they'll put that in place for you so that no one can do it on the phone. Well, Mark had that. No one was allowed to transfer his phone number unless they Mark came in the store with his phone and said, "Here is my identification. Please transfer this to a new phone." He didn't have to have his phone, just he had to have his ID.

Gary Leland:

Well, this store out there in New Jersey, since it was the store manager, he was able to access what you shouldn't be able to. That's a weakness in that phone carrier's thing is letting a store manager access that.

Erin Gregor:

Override it. Yeah.

Gary Leland:

That's how they were able to override it was the store manager gave the bad guy ... SIM swapped it for him.

Erin Gregor:

So, this is an interesting question, because I had another acquaintance I know get SIM swapped basically, got his phone targeted. He thinks it had something to do with that he was talking about bitcoin a lot on Twitter and thinks he kind of made himself a target. Is that the same type of thing like Mark?

Gary Leland:

Yeah, it could be.

Erin Gregor:

Mark talks a lot about bitcoin. He's everywhere talking about it. Can that, I guess-

Gary Leland:

What you might want to do if you're doing ... Do you know Ray Redacted?

Erin Gregor:

Mm-mm (negative).

Gary Leland:

He is a local guy. He's a big security guy. I'm just looking this up so I can tell you for sure. He recommends you use something like Hushed, H-U-S-H-E-D. It's an app for your phone, and it costs 30 or $40 a year. I can have up to 10 different phone numbers, I think, on there that all ring to my phone. So, if someone's asking me for my phone number, and I don't know who they are, or I just don't think it's anyone's business to know my exact number, I give them the number off of there. When they call that number, it rings straight to my phone. Then if they're-

Erin Gregor:

Okay. So, they have no idea.

Gary Leland:

Yeah. If it's in my phone, their name ... Like, if you called me through my Hushed number, it would say it was Erin, just like it does with everybody else through my phone. But if it wasn't you, it was someone I didn't know, it would just say Hushed. Then I would say, "Well, this is someone I don't know, obviously, that I've given out my Hushed number to." But by doing that, your number is less often online is the thing where people can find your number and attempt. So, if they can't find your number, they can't even attempt the SIM swap. That's the deal.

Erin Gregor:

Right. Okay. Then mobile, if you want to use bitcoin for shopping, this would be ... We talked about this last week. I'm not ready to go shopping yet. I'm just like-

Gary Leland:

Well, that's better if you're just hopping.

Erin Gregor:

I'm just holding onto everything. [crosstalk 00:38:22]

Gary Leland:

Yeah, that's if you're going shopping in person. You're not going to carry your laptop with you or Trezor or a paper wallet. So, you would use that, and then you could just open up the wallet, scan a barcode of the person you're buying bitcoin from, and say how much you want to transfer over to them. It's just that that's online all the time as you're walking around, plus you can have it stolen. It's a little less secure.

Erin Gregor:

Well, from a perspective too, you're wondering if these ... It would make sense, right? Overstock, I know, the founder of Overstock is a big bitcoin person and allows you to-

Gary Leland:

And he's involved with Ravencoin, too, which is a fork of bitcoin.

Erin Gregor:

Okay. It's more susceptible for hackers, because I would think ... I'd watch these sites like a hawk and try to ... Because, if somebody's paying with bitcoin, they probably have a lot of bitcoin, and I'd want to know who these people ... Do you know what I'm saying?

Gary Leland:

Yeah.

Erin Gregor:

So, it seems almost risky, too, to be paying with bitcoin, because you're just putting yourself as a bigger target. Maybe? I don't know?

Gary Leland:

Well, yeah, to a degree. The more it's not ... Well, the more people that know you do it, the more at risk. And that's one more person, because there's a store, all these employees at this store that you see you do it, and they come out and get your license plate. They aren't going to know who that bitcoin came from unless you give them your name. It's not like, when that bitcoin ... When you buy something from the store, it registers Erin Smith's bitcoin. But you say what's your name, because everybody asks your name or your phone number nowadays. You give them that. Then you pay them with bitcoin. Then it's somewhere in a record that you paid with bitcoin, or they file you out to your car and get your license plate number. Yeah, so you are more exposed than you are if you ... A guy who buys bitcoin, like Bitcoin Tina ... He was at the conference.

Erin Gregor:

Yes.

Gary Leland:

He doesn't want his photo anywhere. He doesn't use his real name ever. He doesn't give out his phone number. Someone like that has less exposure than someone like me.

Erin Gregor:

Right, who talks about it all the time.

Gary Leland:

Yeah.

Erin Gregor:

No, it was funny, because when I helped check in at your conference ... Which we'll give a prop out, perfect segue. What's the name of the conference? When is the next one?

Gary Leland:

BitBlockBoom! It's in August 2020, of course. I think it's like the 27th, 28th. It's the last weekend, and we just signed up Stephan Livera today as coming out of Australia. He has a huge show. He has a big following. This was a big plus for us this year to have Stephan there. But, yeah, if you're ... Doesn't matter if you're in Dallas or not. If you're into bitcoin, this is a conference for bitcoiners. They come from all over the world to my conference. This is a strong conference. But this isn't a beginners' conference by any means either.

Erin Gregor:

Right. It's definitely more in-depth. Yeah. But, when I was checking people in, there was a lot of ... Not a lot, but ... I'm like, "Why are people using aliases? Why aren't they really ..." They'd give their name. Oh, it's not under that. It'd be a fake name. I'm like, "What is happening?" And I had no idea why so many people would be using aliases. Since then, I've learned a lot about the security thing.

Gary Leland:

Then a lot of them were putting pieces of tape over their badge later.

Erin Gregor:

Yes.

Gary Leland:

Because it might have had their real name on it. So, they put a piece of tape so you couldn't see it, but you saw they had a badge. This year, we ask them what name they want on the badge so they can put their fake name on the badge.

Erin Gregor:

That's so crazy. That's so crazy. And I'll be honest. For me, it can sound intimidating. Excuse me. It can sound intimidating. It can sound like ... Oh my gosh, I just want to buy some bitcoin. Would you recommend ... I'm assuming it gets easier. Once you get over the hurdle of your first wallet and your first transfer, it becomes a lot easier. If somebody's intimidated-

Gary Leland:

It's still always kind of a little scary though.

Erin Gregor:

It is a little scary, because you've got to make sure you're getting the key right. So, what would you recommend ... And, again, we're not financial advisors. But from someone who's been doing this for a couple years, I got my first bitcoin, whatever it is. How do you recommend to somebody they just kind of begin. Is it just you buy a Trezor or whatever, and you start walking through it, and it pretty much is self-explanatory? Are there resources I can go through to help me with the step-by-step process?

Gary Leland:

They are. But if you go with a Trezor or a Ledger, it's pretty easy. The instructions in the box. I used it, and that's all I needed. I didn't need to look at anything. There were some things that bothered me. Like, when you're through ... When you use a USB, they always say to go to the computer, to the icon, and click it off. I don't think it's necessary on a PC, on a Microsoft computer, but it's definitely good to do on an Apple computer, to just close that instead of yanking it out. Well, with my Trezor, I kept looking to do that, and you don't have to do that with the Trezor. So, that's one thing I would have liked to know. I was looking there, going, "Now I'm scared to unplug it. There's something wrong, and I'm going to mess it up maybe." But it's all pretty cut and dry.

Gary Leland:

But I just recommend, when you do it, if you're transferring ... Let's say you have $1,000 on an exchange, and you're transferring it into a wallet. Transfer like 20 bucks first.

Erin Gregor:

Just to test it.

Gary Leland:

Just to make sure. I still do that. Just to make sure it goes through fine. And if it does ... Actually, if I was transferring ... If you had a large amount, if you were transferring $10,000, let's say, you had 1.5 bitcoins, I'd transfer 20 bucks and then probably transfer 1,000 bucks. Then, kind of, okay, now I feel good. Now I'll do the other 8,550 or 8,000, whatever in steps. Because you don't have to do it all at one time. I'd rather lose the 50 bucks or 20 bucks and say, "Oh, I didn't get all that number."

Gary Leland:

Then I also ... Before I hit send, I look at the first three digits and the last three digits. Because, if I've got the ... You could go through every digit, but the odds are, if you've got the first three are in there correct and the last three, then you probably copied everything in the middle. Because that's another mistake people make. They miss off a digit. And it's not in the middle. You aren't going to miss copying a digit in the middle of a 20-digit number-

Erin Gregor:

Yeah, that's true.

Gary Leland:

... but you might copy the first 19. So, I always look at the first three and the last three. But there are viruses that can get on your computer that substitute numbers in the middle there, out of all fairness.

Erin Gregor:

Ooh. All right. Keep your virus software up to date.

Gary Leland:

The best thing is to be computer clean.

Erin Gregor:

Yeah, exactly. Keep your virus software up to date. I like Macs.

Gary Leland:

Yeah, so do I. And I still have virus software on my Mac though, which I didn't used to do before I got into crypto.

Erin Gregor:

Yeah, I need to.

Gary Leland:

Yeah. I didn't before I got into crypto. I was recommended by Ray Redacted. He speaks all over the world on security. I use Malwarebytes, M-A-L-W-A-R-E-B-Y-T-E-S. That's what Ray recommended. Like I said, Ray is like ... This is his profession.

Erin Gregor:

All right.

Gary Leland:

But he spoke at the conference. He spoke in the last few years of the conference.

Erin Gregor:

I'll have all of this on a notes page over at clarifyingcrypto.com. So, Gary, thank you. I know this was a lot of information for somebody listening to it, but hopefully, like I said, it's just a first step.

Gary Leland:

Oh, wow. We were on here a long time, weren't we?

Erin Gregor:

Yeah. No. It's already almost time. I know. It goes by fast.

Gary Leland:

It does go by-

Erin Gregor:

I like talking about this stuff. I enjoy it. So, next week we're going to cover mining, like what does this mean, because I want to [crosstalk 00:45:53]

Gary Leland:

I have some machines mining right now in the backroom. I don't know. I guess you can't hear them.

Erin Gregor:

No, which is good.

Gary Leland:

All right.

Erin Gregor:

But, yeah, so that'll be next week. As always, if somebody wanted to find you [crosstalk 00:46:05]

Gary Leland:

Just find me on Twitter, Gary Leland, @garyleland, all one word.

Erin Gregor:

Okay. I think some more-

Gary Leland:

Everything I put's there. Yeah, someone's wanting to ... Some dogs.

Erin Gregor:

No. You can hear my one dog wants to come in, but I think probably another package from a Fold purchase is coming in. It's like an everyday occurrence right now at my house.

Gary Leland:

I see a poll now posting ... I don't know if you've seen this on Twitter, if you follow them. They're posting another member of the Million Satoshi Club.

Erin Gregor:

Ooh.

Gary Leland:

People were sending their screenshots when he had a million.

Erin Gregor:

I'm almost there. A couple more purchase, and I'll be there. I really do hope-

Gary Leland:

I'm only 650,000.

Erin Gregor:

I hope they do go up to a dollar Satoshi, because that would be awesome.

Gary Leland:

Right now, I think it's 14,000 maybe Satoshis in a dollar. So, even if they go-

Erin Gregor:

14 ... Or 14 ... No.

Gary Leland:

I think it's 1,400.

Erin Gregor:

No, that can't be right.

Gary Leland:

I was looking at this the other day. There's 100 million ... I mean, a Satoshi is a hundred-millionth of a bitcoin. So, it's a small amount of a bitcoin.

Erin Gregor:

I think with my almost a million, I've got like $70.

Gary Leland:

Yeah, I was going to say. So, it may be 14,000 in a Satoshi.

Erin Gregor:

Okay.

Gary Leland:

Or 14 ... It's 14 something. See, I can't even do the math.

Erin Gregor:

I'm getting there. I'll probably have to give my weekly Satoshi update. I need to stop. I don't want to, but we've got a trip to Hawaii. I'm going to start adding up the Airbnb. I've got several more flights here in-

Gary Leland:

Well, we figured out the other day at Crypto Coffee here in Arlington ... We do that on Wednesday mornings. We were figuring it out, how much money you had to spend to get a bitcoin, doing these apps.

Erin Gregor:

We don't-

Gary Leland:

You have to spend like $100,000 to $200,000.

Erin Gregor:

We don't need to go. It's like the Starbucks app. When you get excited that you got a free drink, you're like, "How much did I spend to actually get that free drink?" It becomes a little depressing. So, we don't want to think about that.

Gary Leland:

Okay. We'll keep that off the table from now on.

Erin Gregor:

Exactly. All right.

Gary Leland:

But hopefully bitcoin goes up enough that you're going, "Wow. I've got now $90 in my wallet there," like you just said, but all of a sudden it goes up ten-fold, and you've got 900 bucks.

Erin Gregor:

Exactly. Exactly. It's free money. So, I agree. But, Gary, as always, thank you so much for joining us. We'll have all the links to connect with you.

Gary Leland:

Oh, I enjoyed it.

Erin Gregor:

I did too. So, we'll do mining next week.

Gary Leland:

Sounds good.

Erin Gregor:

All right.

Gary Leland:

I won't put as many notes in there so we can not-

Erin Gregor:

No, it's good. It's good. I'm glad you did. I'm going to put, like I said, all the links to everything you recommended in the notes page so people can go check these things out and get signed up and figure out what they want to try first and get ready.

Gary Leland:

Sounds good.

Erin Gregor:

All right.

Gary Leland:

Adios.