Gold vs. Bitcoin: The Old and New School of Storing Value
Gold and Bitcoin are very different assets, but they both share a crucial function: they're seen as stores of value. This means people use them to protect their purchasing power over time, especially against inflation and economic instability.
Gold
For thousands of years, gold has been the standard. Its value comes from its physical scarcity and a long history as a valuable asset. It's a durable metal that doesn't rust and is difficult to mine, which limits its supply. The issue is that gold is centralized and tough to transport. Storing it requires vaults and security, and moving it from one country to another is expensive and complicated, as it depends on third parties like banks or security firms.
Bitcoin
Bitcoin, on the other hand, is a digital asset. Its scarcity isn't physical, but mathematical: it was programmed to have a maximum supply of 21 million units. This makes it deflationary by nature. Unlike gold, Bitcoin is decentralized (not controlled by any government or bank) and can be moved quickly and cheaply anywhere in the world without intermediaries. This feature, known as portability, is one of its biggest advantages.
Conclusion
While gold is the established, physical, and centralized store of value, Bitcoin is the digital and decentralized alternative. Gold is heavy and requires you to trust a third party for storage and transport. Bitcoin, however, offers a form of financial sovereignty, letting you be your own bank and transport your value securely and discreetly anywhere in the world.
The Lifeline in the Storm: How Stablecoins Like USDC and USDT Empower Venezuelans Amidst Turmoil.
Here's an article in English about the importance of stablecoins like USDC and USDT for Venezuelans during times of tension and high inflation:
The Lifeline in the Storm: How Stablecoins Like USDC and USDT Empower Venezuelans Amidst Turmoil
Venezuela has been a stark example of how economic instability can devastate a nation. With a local currency, the Bolívar, suffering from hyperinflation and a government facing international sanctions and internal strife, its citizens have been caught in a relentless economic storm. In this challenging environment, stablecoins like USD Coin (USDC) and Tether (USDT) have emerged not just as financial instruments, but as vital lifelines for many Venezuelans.
The traditional financial system in Venezuela has largely failed its people. The Bolívar's value evaporates daily, making savings worthless and future planning impossible. Access to foreign currencies like the U.S. dollar, while highly sought after, is often restricted, expensive, or involves unofficial, risky channels. This is where stablecoins step in, offering a digital bridge to stability.
Why Stablecoins Matter in Venezuela:
Inflation Hedge: Unlike the Bolívar, stablecoins are pegged to a stable asset, primarily the U.S. dollar. This pegging provides a crucial hedge against hyperinflation. Venezuelans can convert their rapidly depreciating Bolívares into stablecoins, preserving their purchasing power and protecting their savings from being wiped out. For a population where every penny counts, this stability is invaluable.
Accessibility and Usability: Stablecoins are easily accessible through various cryptocurrency exchanges and peer-to-peer (P2P) platforms, which often operate online and can be accessed with a smartphone and internet connection. This digital nature circumvents the need for physical cash or traditional banking services, which might be unreliable or subject to strict capital controls. For many, stablecoins are the easiest way to access dollar-pegged value.
Remittances and International Transactions: For Venezuelans living abroad, stablecoins offer a faster, cheaper, and more efficient way to send money home to their families. Traditional remittance services are often costly and slow, and bank transfers can be complicated by sanctions and banking restrictions. Stablecoins allow funds to be sent almost instantly, with lower fees, directly to a recipient's digital wallet, providing essential support to families struggling with basic necessities.
Economic Empowerment and Micro-Businesses: Small businesses and entrepreneurs in Venezuela often struggle to find reliable payment methods or store their earnings without losing value. By accepting and holding stablecoins, they can price their goods and services in a stable currency, protect their profits, and conduct transactions with greater confidence. This fosters a resilient informal economy that can function despite the broader economic collapse.
Sanctions Evasion (for individuals): While international sanctions are primarily aimed at the Venezuelan government and state-owned entities, their ripple effects often impact ordinary citizens' access to global financial services. Stablecoins, being decentralized and largely censorship-resistant, can offer individuals a way to bypass these restrictions for legitimate personal and business transactions, ensuring they can participate in the global economy to some extent.
Challenges and the Path Forward:
Despite their undeniable benefits, stablecoins are not without challenges. Internet access can be intermittent, digital literacy varies, and the regulatory landscape for cryptocurrencies remains uncertain. Furthermore, reliance on stablecoins still implies a level of trust in the issuers (like Circle for USDC or Tether for USDT) and the underlying assets backing them.
However, for Venezuelans facing daily economic hardship, the advantages far outweigh the risks. Stablecoins like USDC and USDT have transformed from niche digital assets into practical tools for survival and economic resilience. They offer a beacon of hope, providing a degree of financial sovereignty and stability in a nation otherwise plagued by uncertainty and economic despair. As the world watches Venezuela, the silent revolution of stablecoins continues to empower its people, one transaction at a time.
A Read for Your Morning Coffee!
MetaMask Now Allows Login via Google and Apple Accounts
New feature brings convenience, but it's not the best solution for storing your cryptocurrencies.
MetaMask, the most famous Ethereum wallet on the market, announced on Tuesday (26) that its users will be able to create new wallets using their Google and Apple accounts.
The goal is to offer a simpler experience for new investors, so they don't have to worry about backing up seed phrases.
Many users praised the feature on social media. However, it's important to note that there are some dangers with these social logins.
MetaMask Launches Feature That Allows Login via Google and Apple Accounts
The experience for cryptocurrency investors has improved significantly since the creation of Bitcoin. For example, in the early years, it was necessary to save long private keys. Later, 12 or 24-word seed phrases were introduced, which are much easier to store and interpret.
Now, MetaMask has revealed that its users can create wallets using Google and Apple accounts.
"You can now use your Google or Apple ID to create a MetaMask wallet and log in with one click," MetaMask wrote. "Creating, restoring, and accessing wallets is now easier than ever."
In their blog, the developers note that "crypto doesn't have to be complicated" and that creating, backing up, and restoring a wallet has become easier than ever.
"Traditionally, you need a 12-word Secret Recovery Phrase (SRP) to manage non-custodial crypto wallets," MetaMask wrote. "This method gives you more control and security over your digital assets than traditional financial accounts. But keeping track of your SRP can be a chore."
"Social login simplifies the wallet creation and management process."
In addition to the login, the user will also need to provide an additional password, increasing security.
However, MetaMask warns that funds will be lost if the user loses this password. In other words, the password provides extra protection against invasions of Apple and Google accounts, but just like the 12 words, it cannot be lost.
Developers Give Details About Social Login Security
In another more technical article, MetaMask developers published a longer text for users concerned about the security of this social login method.
In short, the company states that the keys will be hosted online but will be encrypted in a way that the keywords are only exposed on the user's computer.
"MetaMask's social login uses a cryptographic primitive called a “Threshold Oblivious Pseudorandom Function” (TOPRF), along with a distributed key management protocol, to ensure you remain in custody of your tokens while offering a high level of protection against attacks and failures," the developers explained.
"The feature is designed to be self-custodial. The only instance where a complete SRP exists is on your device, after successful authentication with your login and password."
When the SRP is backed up, it is stored on the MetaMask backend as encrypted ciphertext.
The encryption key is split between multiple key part holders using Shamir Secret Sharing (SSS).
No isolated party (neither MetaMask, nor data storage, nor Google or Apple), besides you, can reconstruct the SRP in plain text.
The SRP is obtained in a 2/2 system: by authenticating with the selected login provider (Google or Apple) and providing the correct password.
Convenience Also Has a Price to Pay
Social login can be useful for keeping hot wallets with low values, which the investor accesses at all times to perform transactions with some frequency. However, traditional self-custody with cold storage is still the safest method for storing large amounts.
After all, it's not that difficult to write 12 words on a piece of paper and store it in a safe place.
Explaining the risks, MetaMask points out that "if a number of holders above the threshold are compromised, the attacker obtains the OPRF key, but still needs to brute force the password to derive the correct encryption key."
In the case of Google or Apple accounts being compromised, the developers note that the hacker would still need to guess the password (which is easy if it's an already compromised and reused password). "The number of password guessing attempts is limited due to the rate restriction on the server side," the company highlighted.
Another problem would be forgetting/losing the password, which may be more frequent than losing the 12 words, since users will store them in their heads.
"The use of password managers and local keys protected by biometrics can help reduce the risk of password loss or theft, but there is still a strong dependence on the password. This is the trade-off for maintaining self-custody, so make sure to keep your password and devices safe! We hope this introduces a more convenient path to create and restore your wallets."
Finally, other risks are linked to Apple or Google. For example, they can ban a user or end support for this service.
While these hypotheses seem difficult to believe, this week a user went through a similar problem with another wallet and with a Facebook login.
"I tried to log in to my account via the website and was taken to a screen that 'requires' me to log in via Facebook, but Facebook no longer supports third-party logins," an investor reported.
Therefore, as mentioned above, it is easier to write down your twelve words, unless you have a good excuse to abdicate full control of your funds.
Finally, it is worth noting that MetaMask launched its own stablecoin this week, mUSD. Therefore, it is possible that the new feature that facilitates login and backup is focused on the general public — especially Americans, due to the Genius Act.
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