Bitcoin FOMO or FOJI?

Remember, hindsight is a deceptive thing.

Bitcoin FOMO or FOJI?

Ace cybersecurity reporter Lorenzo Franceschi-Bicchierai writes on Motherboard:

This last month, as the price of Bitcoin skyrocketed from $7,000 to almost $20,000, there have been countless people doing the math on their missed opportunity.

…there’s a handy and masochistic website called Bitcoin FOMO Calculator. (FOMO, for the non-millennials out there, is an acronym for “fear of missing out.”) The site is very simple: You tell it how much you would have invested at what point in time, and it tells you how much you’d have right now.

I’m not sure I have experienced FOMO when it came to Bitcoin. But I have definitely suffered from FOJI (Fear Of Joining In).

Aside from the obvious concern of “Umm.. what happens if the price of Bitcoin plummets from its current heady heights?”, I’ve also worried about the large number of reports we’ve had in recent months and years of Bitcoin exchanges (the online sites that handily keep hold of your wallets) being hacked or simply folding under mysterious circumstances.

So when I did eventually dip my toe tentatively into the waters of Bitcoin investment I set myself a couple of rules:

  • Only ever invest what you are completely prepared to lose. Don’t be tempted to move your pension fund into Bitcoin, Graham.
  • I need to find a way to keep my Bitcoin wallet secure.

The first rule is fairly easy to follow if you’re a grown-up. Sadly, I’m not, but FOJI has somehow kept me from throwing anything more than a small amount of my savings into Bitcoin.

But what of keeping your Bitcoin wallet secure? I don’t trust websites to look after my Bitcoin wallet properly as there have been too many shady goings-on. I *could* keep my wallet on my computer or smartphone but I suspect keeping that entirely secure might be a challenge for the average computer user.

So, as I discussed on a recent edition of the “Smashing Security” podcast with Mikko Hypponen, I use a hardware wallet instead.

Graham's Trezor

The brand of hardware wallet I use is a Trezor (no, that’s not an affiliate link, and they’re not paying me to talk about it). Other hardware wallets include Ledger, but I haven’t tried that.

Plugging into my computer via USB, the Trezor remembers my private Bitcoin keys and allows me to authorise transactions without - crucially - exposing my sensitive keys to the internet.

It’s easy to set up a Trezor, and its security seems impressive.

In short, if I *did* have a lot of money invested in Bitcoin I think I’d only have to lose sleep worrying about the bubble bursting rather than my wallet being hacked.

Over the last few days at Christmas parties and family gatherings I’ve been surprised by just how many regular “civilians” (as opposed to use techies) were interested in Bitcoin, and wondering whether they should invest or not, and how would they go about buying Bitcoin.

None of them, though, asked how they could protect their cryptocurrency investment.

I can’t tell you whether you should buy Bitcoin, Ethereum or Litecoin. But I can tell you to take care. And if you value your investments, protect your wallets to reduce the chances of a hack leaving you coinless.

Listen to this edition of the “Smashing Security” podcast to hear further discussion on this topic:

Smashing Security #057: ‘Mikko - live from the sauna - talks Bitcoin security’

Listen on Apple Podcasts | Google Podcasts | Other… | RSS

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4 Responses

  1. John Nolan

    December 19, 2017 at 2:13 pm #

    I think you mean “anything MORE than a small amount” rather than “anything less…” but nitpicking aside, very interesting!

  2. Alex

    December 20, 2017 at 10:06 pm #

    Graham, what is the device to the right of the Trezor in the picture you posted? It looks like an Apple keyboard but it has what looks like an LCD display at the top of it?

  3. Jim

    December 21, 2017 at 2:53 pm #

    Has anyone tried to sell their bitcoins and how long it took?

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