Last June, a fellow sailor (and aerospace engineer) asked me if he could check out a family friend’s “bitcoin.” He sent me a picture of a plastic bitcoin wallet with a partially hidden private key. The family friend received the card as some kind of “conference trick” and threw it in a drawer.
This is one of those moments where I find imposter syndrome perched on my shoulder, nodding my head and pursing my lips. Two years in business preceded by another two playing on my personal account didn’t give me enough crypto credit to say, “Oh yeah, Wow. I remember these.” Well, I’m a newbie. I made a no-promises disclaimer and quickly changed the subject.
Back home, I opened the image and set to work with the solemn determination of Quincy, I. (although forensic examination is an inadequate metaphor, given the complete absence of foul play). How did these old wallets work? If the private key is printed on the card, how is it secure? I knew BIP39, but what is BIP38?
The learning continued. Then, I checked the bitcoin blockchain and noticed that exactly one bitcoin had been moved to this address nine and a half years earlier, when one bitcoin sold for just over $325. No activity since then. As for the hidden BIP38 “private” key, you need a passphrase to decrypt it. Uh-oh. Did the family friend save the passphrase for ten years on a Post-it® that is now worth $100,000?
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This week we went out to see a show with a different group of friends. I offered to refund our tickets with cryptocurrency. “Set up a Phantom wallet, copy and securely store the seed phrase, and send me your Ethereum address. I will pay you in ether or USDC, you choose.”
I saw all the faces. Laugh, roll your eyes, are you serious, wait a minute, hmmm, why not? Alright! I’m still waiting for that Ethereum address, but I have no doubt this will happen. Another “trick”, ten years later.
Why ETH or USDC? Why not bitcoins? In 2025, bitcoin is no longer a mystery. People understand this, and if you are thinking about buying a digital asset, you will find bitcoin on many shelves. It is a store of value. It is scarce. As more buyers enter the market over time, its value should increase.
Many people do it No get Ethereum, nor smart contract platform blockchains. People also don’t get stablecoins, nor the fact that they depend on other blockchains, and involve paying fees in ETH or SOL or a dozen other blockchain currencies. For the “5%,” those who will eventually spend 5% of their investment energy and resources on cryptocurrency, this appears to be the next key insight unlock.
There’s no better way to get there than to invest a few “learning dollars” (i.e. No “investment dollars”) in the chain and move them. I hope my friends take their new USDC and put something into AAVE, connect something to Solana, and buy something into Uniswap.
This primary research could solidify an investor’s conviction in a single platform. Or, quite the opposite: It can solidify the conviction that picking winners is difficult in what will likely be a year of explosive growth. XRP, XLM, and HBAR topped the 2024 rankings of the CoinDesk 20 index, a result few would have predicted. We believe (actually, we hope) that investors and advisors will choose diversified market beta over the possibility of alpha selection.
The plastic bitcoin wallet holders did not “take the bait” and became active bitcoin enthusiasts (presumably), although, ex postthey did the right thing by throwing the wallet in a drawer for 10 years (along with a Post-it® with the passphrase; Phew!). These days, I’m trying to take advantage of as many opportunities as possible for people to open a wallet and get some experience with blockchain. (But if not, I’ll still be good for fiat money theater tickets.)
