Bitcoin ETFs make Coinbase a ‘honeypot’ for hackers and governments: Trezor CEO

According to Trezor, a Prague-based hardware wallet provider, there are currently 420 million global exchange users, but only eight million self-regulating hardware wallet users – that's about 2% of the total.

This was indicative of a large potential market for Trezor, but there have been recent disturbances in power, not least the recent approval of Bitcoin exchange-traded funds (ETFs) and the potential of Ethereum ETFs.

These financial products allow investors to be exposed to crypto without having to hold the asset itself. Self-preservation is counterintuitive and may not be good news for tight-lipped purveyors.

They shouldn't be the first port of call for ETFs for existing bitcoiners and aspiring bitcoiners, according to Trezor CEO Matthew Zak.

“The ultimate goal of anyone holding Bitcoin is to keep their assets safe, private and secure in a hardware wallet.”

Coinbase is a Bitcoin honeypot… Put your crypto in a hardware wallet

And it offers a stark warning about the dominance of Coinbase, where eight of these 10 ETFs reside. When so many assets are destroyed in one place, there is always the risk of theft and worse government intervention.

“With the current major influx of capital into spot ETFs, Coinbase may be the largest Bitcoin honeypot ever, attracting hackers, social engineers and other attackers in unprecedented numbers,” he said.

However, these bad actors may not be the biggest risk in this case. The main threat here comes from governments tempted to confiscate all or part of the Bitcoins stored on Coinbase, for example. Only through special taxes or simply through legislation and confiscation.

If this self-defense company CEO is ringing false bells, it isn't—because before in 1933, President Franklin D. Roosevelt's Executive Order 6102 happened.

The state seized citizens' gold because the federal debt was out of control and the geopolitical winds were blowing in an uncertain future. That's a little close for comfort today, with the US federal debt standing at $34 trillion.

Some speculate that the challenge may be to tap into the massive value of Bitcoin stored on Coinbase, or to somehow combat the threat from Bitcoin to the US dollar.

Matej Zak 5 years at hardware bag company Trezor

Zack says he was very young when he joined Trezor, but he knew he had the potential for not just Trezor's hard-shell technology, but the mission.

“I first joined Trezor to explore the product development side of the business and see its potential to grow internationally. I was also attracted by the business's commitment to the principles of freedom, and especially to financial freedom.

Also Read: The Crypto City Guide to Prague “As CEO, I am committed to building new value on the existing Trezor products. Five years ago Trezor was a very small company with hidden ambitions.

“Today, with an outstanding team of world-class talent, we are poised to deliver a significant increase in the number of global Trezor users – multiplying our base during the current bull market.”

Should you store your crypto on an exchange or hardware wallet?

For all the benefits of self-care, it still comes with risks, from losing your genealogy to having your coins stolen in a $5 hacking attack — and apparently, nearly 400 million people think it's too much to worry about.

Also Read: Pink Drainer Creator Defends Wallet Draining Crypto Cheat Kit

Although individuals who do not own their own keys (self-preservation) own their own crypto (the exchange goes down and regularly disappears), the trend seems to be after 10 years of complex keys and passwords. The dream of self-control can die.

But Zach makes a compelling argument for making the effort.

“Without self-storage, you're missing out on a big part of what makes Bitcoin unique — decentralization and real ownership of your money.”

Zack admits that some potential users are intimidated by what they see as the complexity of hardware wallets. But they are working on it.

“We're on a mission to make self-sustaining accessible to everyone from two perspectives. First, we're all about simplifying concepts through easily digestible learning,” he says.

Second, Trezor says it is constantly working to make the processes as simple as possible.

“Our research team is always discussing the storm with all customers, digging deep to find out what's bothering them and what's scaring them.”

When asked about the downsides of self-dealing, Zack is refreshingly open about it and points out the dangers of handing over security to an exchange or fintech app.

“Apps like Revolut do a great job. They hold cryptocurrency for customers, it's easy to do, but there's a long process of KYC, linking credit cards and so on. In many ways, it's the opposite of what Bitcoin should be.”

“We have a desktop and mobile app and it's a bit complicated, but as long as customers educate themselves and know what they're doing, it's much better for them in the long run. They also have full control over their assets.”

Bitcoin bull predicted by funds going into hardware wallets

Zack knows a lot about Bitcoin bull runs and when we first met in a bar in Prague last year, he told me that he knew a positive market sentiment was coming. He says he has been seeing a lot of crypto funds going into the Trezor wallet and this happens at the beginning of every bull run.

A bold claim, I told him at the time, but a claim on the money. Like everyone else in this changing world, I had to listen and adjust accordingly. Zack has his finger on the pulse – he's not your average crypto bro, more like a tech entrepreneur.

A healthy, active lifestyle

Zach has an active lifestyle, certainly compared to the Lambo-minded in the crypto industry and the unsanitary pursuits of Dubai's high-rises and luxury jobs.

He originally trained as a classical guitarist and still performs in a jazz band that plays regularly in Prague. A great admirer of the Spanish flamenco master, Paco de Lucia, Zack studied music because he loved it, but he always enjoyed being with tech-savvy people.

“In my spare time, I perform in a jazz band and climb mountains around the world. I compete in endurance sports including hiking and paragliding. I've found that clearing your head when you get back to your desk pays dividends.

He entered the influential world of technology from an early age. He's built a few startups with varying degrees of success — a live-streaming app for concertgoers and musicians, and an e-bike stock company that didn't take off but is still around five years later, along with other executives. But failure doesn't seem to bother him.

“You learn a lot from your mistakes. Ever since high school, I've been interested in building fast-growing, net-positive technology companies. I've always been fascinated by new technology.”

In the year While studying a course for beginners in Prague in 2015, he started hearing more and more about Bitcoin. He liked Trezor and the company culture, applied for the job and worked for his current position.

“Before I joined Trezor five years ago, I was an avid Bitcoin user. However, my experience working on Trezor's product development ignited a real spark. Contributing and being a part of what millions of users around the world subscribe to – privacy security and financial self-sovereignty – is a powerful motivation. He said.

Trezor data breach of 66,000 email addresses of hardware wallet owners

The past five years haven't been without challenges for Trezor, a data breach that exposed at least 66,000 email addresses. Zack regrets this but also explains that nothing but email addresses was hacked.

“At that time we were relying on a third-party supplier, and it's always kind when things like this happen. We were part of a widespread phishing attack and many companies were affected during that time.

“To be completely honest, it's very expensive to create our own email service, but it's worked out for us because of our mission to never store personal information and never store people's information. However, we had to find another supplier, and obviously we are taking extra precautions to protect our customers.

So how does Trezor protect its customers from phishing and other such attacks?

“It's simple. Don't store anything online, follow healthy habits, no one needs phishing if they educate themselves.

Trezor hardware wallet in Bitcoin Prague

The annual Bitcoin Prague conference in June is a big deal for the industry.

With a month to go before the company's 10th anniversary, the current bull run is expected to be in full flow and, in theory, time for a big celebration.

But will self-sustainability gain ground or lose its share in its second decade?

According to Zack, Trezor is once again using Bitcoin Prague to evangelize what the company does. They announce “some exciting developments” in self-protection solutions, “all aimed at serving a growing number of users worldwide.”

Sure, but what are they?

Zack keeps his cards fairly close to his chest, but when pressed for details, he says “developments” related to the Trezor Safe product extension that launched in October.

About Bitcoin Prags?

“It's a great opportunity to make a significant impact on our loyal community in our hometown and extend a warm invitation to people from all over the world to experience Prague,” he said proudly.

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Andrew Fenton

Based in Melbourne, Andrew Fenton is a journalist and editor covering cryptocurrency and blockchain. He has worked as a film journalist for News Corp Australia, SA Wind and national entertainment writer for Melbourne Weekly.

Follow the author @andrewfenton