The cautionary tale of Ledger.
They make me dream your dreams. They make me scream your screams - Muse
I actually like using Ledger. It’s been one of the best crypto hardware wallets for a long time now. Long time being 7 years, which is an eternity in cryptoland.
I don’t wanna focus on batshitting on Ledger, neither do I wanna focus on saying ‘How we should give them a chance!’. What I wanna theorize about in the most neutral way is - What may have been happening behind the scenes that convinced Ledger to make such an idiotic move.
The idiotic move to allow users to store their seed phrase in cloud servers.
Let’s breakdown a few problems in cryptoland:
a) User design and user experience problem
It’s been shitty usually. Crypto companies are generally desperate to solve this problem. Mostly because the companies who solve it correctly will be able to monopolize a large market. Our entire internet and browser experience is built mostly on centralized tech. It is an easy and a hard problem to solve at the same time. Easy problem to solve if you rely on centralized tech, a fucking nightmare if you wanna solve it while keeping the ethos of decentralization.
Ledger wanted to solve the UX/UI problem with centralized tech. More specifically they wanted to solve the ‘backup your keys easily’ problem.
b) Regulatory pain in the ass problem
A very common knowledge is that regulators are on the asses of various crypto companies - exchanges, blockchain protocols, Defi, hot wallets. Cold wallets are no exception. Sooner or later they are gonna go after self-custody wallets if they haven’t.
Ledger probably wanted to be ahead of this regulatory curve. Ledger’s idea - let’s make some of our users share their seed phrase first, then we can mandatory KYC. Not so fast, ledger!
c) Lack of decentralized tech
The innovation around Web3 is actually disappointing. A majority of the applications are built on the same or similar underlying tech. The differentiation is on the product or market level, not necessarily on the tech level. If not all, a large majority of the Defi projects on Ethereum is built using Solidity. We don’t even have a proper second language!! How fucking crazy is that? Even javascript has it’s competitors - PHP, anyone?
This whole - extract your seed into 3 parts and store it in different centralized servers was probably Ledger’s attempt to build more of reliable decentralized tech. Oh well, semi-centralized tech if that makes you feel better.
Overall, Ledger tried to solve all these problems together with a one quick fix. So, they made the market mad. Instead, they could have taken the harder road and tried to solve these problems one by one while keeping crypto values (such as privacy, decentralization) in mind.
Nonetheless, if I were you I would use Ledger cautiously. Maybe get a Trezor? Why not decentralize your hardware wallets?
Just fucking opinions. Keep your crypto safe, everyone.
Disclaimer - Nobody (Ledger or Trezor) paying me to write this shit.
