I am in the world of bitcoin since 2012 when I opened my first bitcoin wallet on blockchain.info… and a lot of things changed since that moment: new services, growing communities, new alternative crypto currencies, ATMs, Credit-Debit cards, and a larger diffusion of people accepting bitcoin in their shops.
After those two years I can see a better view of what Bitcoin means to me and the innovation behind that technology, including Xapo debit card… and some of my friends are tired of me talking about bitcoins :)
How I choose a wallet
Using simple words: the wallet is a collection of addresses and their private keys. The address, that is used to receive the money, is a group of letters and numbers generated by the private key, that is required to send money.
Because you must have the private key of your address in order to sing a transaction, the security level where this value is stored must be high. The default bitcoin client provides a wallet, but is really slow and it must be synchronized and it will take some days…
The smartest solution is to generate a Paper Wallet: it is a single address and its private key printed on a piece of paper, exactly like a printed dollar, you can receive the money you need on the address, and use the private key only when you have to perform payments. There are other cool products like Trezor… but you must have a lot of BTC in order to need that level of security.
I am using Coinbase and Xapo as main services to store my bitcoin online: Is really hard to trust some of those services and my choice is based on how funds they have and how many people trusted them. On Crunchbase I discovered that Coinbase during the last years received 31.7 Million Dollars from 14 investors, but Xapo got $60 Million from 12 smart guys. This is enough for me to understand the power they have also to survive in case of big problems… Xapo for example, is insured and they have a beautiful mobile wallet for iOS and Android!
Xapo Debit Card
From my point of view, the most valuable question of Bitcoin is connected to our every day life. Is it going to change our habits? My everyday life is not changed a bit since I started using the Xapo debit card. Since I received and I activated it, it was working exactly as any other debit card I have.
The same day I went to the 7 eleven and I bought two sweet pieces of the traditional “danish bakery” for just 25 DKK… and I decided to pay using BTC. The transaction was just 1-2 seconds slower than the normal… I was so excited and when “payment approved” appeared on the screen of the terminal my little geeky child in me fainted. It was working exactly like any other debit card, but with Bitcoin. WoW! :)
So, while I was eating the amazing Winerbrød, I checked the balance on the Xapo mobile wallet (the iOS native app), just be sure that everything was working fine. I received instantly the payment on my account, and my 25 DKK had been converted into 0.009 BTC. I was so excited and happy that my friends started ignoring me because I was talking too much about bitcoin! :P
The real problem behind bitcoin
From my point of view, the big problem of Bitcoin is connected to the complexity of the system, but more than a solution is there to solve it. The bitcoin is still not changing our life because if we try to use the payment protocol as it is in our daily life, it will be really painful. Litecoin is the second biggest crypto currency available and “fixed” some of the problems of the bitcoin network, but it is still not the best solution I’ve found.
Every transaction takes from 10 minutes to even 1 hour to be confirmed 6 times. This means that if I want to buy something in a small shop using directly my bitcoin wallet, I have to wait 10 minutes or more. The solution used by Xapo is really interesting and solves this problem: using the Visa network to connect my bitcoin wallet to my debit card I can perform payments as I am used to: instantly. The merchant does not receive bitcoin, but the currency he required using the terminal. This is a big step for the bitcoin world, but is not the best solution to the problem: the merchant does not even know about bitcoin and this is not increasing the real use of it.
I also was considering that in emergency cases, like a war or just like if electricity or internet is missing. In those cases, we cannot use bitcoin as any other payment system. But this is a concept and I know that probably another open source alternative crypto currency is there to solve this problem. :)
Anyway, The good news is that I know that my mother knows about bitcoin, even if she does not need to use them.