Rytis Bieliauskas, CoinGate: “Unlike bank account, nobody can freeze or steal your money from cryptocurrency wallet”
Keeping money in the cryptocurrency wallet is much safer than in the bank: the bank account is available not only for you. Such an opinion was expressed by Rytis Bieliauskas, CTO at the CoinGate bitcoin processing company, in the interview for Blockchain & Bitcoin Conference Kiev. We talked to him about the cryptocurrency wallet protection and the possibility of cryptocurrency regulation.
Rytis Bieliauskas is a blockchain and bitcoin enthusiast, CTO at CoinGate. This company helps customers to integrate bitcoin payments into business processes.
- Hi Rytis. Your presentation will be dedicated to bitcoin wallets and safe storing of cryptocurrency. What kind of wallet do you prefer personally? Why?
- I prefer hardware Bitcoin wallets (I use Trezor), as they offer very high level of security, while still allowing to send payments easily.
- Which type of wallets is the most popular among the European crypto community? Why’s that so?
- Each wallet type has their appropriate use cases. I don’t think geographical location has any relevance to that.
- How often are the cryptocurrency wallets being hacked?
- I don’t think I have ever heard of a cryptocurrency wallet being hacked directly. What usually gets hacked are exchanges or the so called “web wallets” (which is not really a “wallet”, but an account with some third party). What could also happen, is the device on which a cryptocurrency wallet is installed could get hacked, or there could be vulnerabilities in the RNG (random number generator) used by the device, which would allow someone with the knowledge of the vulnerability to generate the same private keys as another person.
- In our opinion, is keeping the cryptocurrency in the secured wallet safer than keeping fiat money on the bank account? Why so?
- It is much safer than keeping money in the bank account, because when using a third party (like a bank), you do not control the money – the third party does. This means that they can freeze or steal your money at any time, for example like it happened in Cyprus in 2013.
- Do you think that state authorities should regulate cryptocurrency operations? What pros and cons of the regulation are there?
- It is not possible to regulate cryptocurrency operations, it would be like trying to regulate geometry. Even if you forbidden people to use geometry, it would be impossible to enforce. The only thing which could be regulated is Bitcoin exchanges. As there already exists several fully decentralized (and therefore impossible to regulate) Bitcoin exchanges, overregulating the centralized ones (and therefore making them too much of a hassle to use) would simply drive everyone to use the decentralized ones.
- Perhaps you know of some examples of a successful cryptocurrency regulation in the modern states?
- No, and as mentioned above, regulating cryptocurrencies is not possible. The most known example of trying to regulate cryptocurrency exchanges (not cryptocurrencies themselves) was by New York State's Superintendent of Financial Services Benjamin Lawsky, who drafted the so called “BitLicense”, then quit his position, and launched his own legal and consulting firm which offered businesses help in meeting the regulations which he himself created.
- Imagine that you have a chance to create the basis for the legal regulation of cryptocurrency operations in some country where there’s no control of digital assets. What would start from?
Regulating cryptocurrencies is not possible. Any attempt to do it, will just be laughed at by historians, and ruin the reputation of anyone involved. An example: “Indiana Pi Bill” of 1897, where sitting of the Indiana General Assembly tried to legislate the value of the number pi to be changed to 3.2.
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