From Cold Wallet Security to Bitcoin's Ultimate Dilemma: Why I Believe the Future of the Crypto Ecosystem Lies in Ethereum?

By: Dao Shuo Blockchain

1. What are your thoughts on the recent Ledger cold wallet hack, and how should ordinary people store crypto assets more securely?

For this question, many people online suggest simply depositing them into Binance.

Doing so actually assumes that Binance's creditworthiness is superior to that of cold wallet vendors and distribution channels, and is also more reliable than self-custody.

I trust open-source hardware wallets more; or to diversify further, I'd put part in an open-source cold wallet and the rest in a custom-made Apple-based cold wallet.

I would not deposit them into those centralized exchanges familiar to Chinese nationals, frequently mentioned by readers in the comments section, as their regulatory standing is questionable.

But if I must choose a crypto exchange to hold my assets, I would select one operated and regulated in a country with a strong rule of law, strictly overseen by its national regulators.

This aligns with my consistent principle: If you trust centralized institutions, choose ones from countries with the highest credit ratings and rule of law; if you distrust centralized institutions, opt for a solution where you take full responsibility and bear the consequences yourself.

2. Honestly, I can already calmly accept that BTC will eventually fail. It came, it shone, much like our civilization.

I have seriously considered this extreme scenario before, and after careful reflection, realized I could come to terms with it. Therefore, while I keep an eye on recent discussions regarding Bitcoin risks, I haven't been overly anxious.

Precisely because I've weighed this extreme possibility, purely from an investment standpoint, I will make no further regular investments in Bitcoin this cycle (unless it drops back below $35,000), and will simply retain my current holdings.

However, I must emphasize that I believe the likelihood of this extreme scenario materializing is very low, almost negligible, so the general public does not need to worry excessively about it.

3. Regarding Lightning payments and Bitcoin application protocols like TACIT.

Readers in the comments have brought up application protocols such as the Lightning Network and TACIT.

If we examine these protocols closely, we see they all face an awkward predicament: striving to maximize potential within an environment of extremely limited capabilities.

Products developed this way inevitably end up as mismatched hybrids, riddled with endless patches across all facets, constantly encountering various hurdles during real-world adoption. Fixing a minor issue often inadvertently introduces a much larger one.

This is akin to attempting to construct a 20-story building on a foundation meant to support only eight floors, trying to avoid catastrophic failure while still ensuring the building is comfortable and functional.

The root cause lies in Bitcoin's core protocol being virtually immutable. Unless the core changes, any protocol built atop it will ultimately face the same fate. Hence, their practical value is too limited.

Beyond offering deep spiritual admiration for these teams, I would rarely consider them for practical applications.

4. The issue of Bitcoin transaction fees.

This is a well-worn topic, yet it warrants frequent review.

With block reward halvings occurring every four years, Bitcoin mining rewards continue to shrink. In the future, once block rewards approach zero, maintaining network security will depend almost entirely on transaction fees.

At that point, if we expect miners to sustain network security using only transaction fees—and assuming the current technical architecture remains unchanged (which is highly probable)—the only viable solution would require Bitcoin's price to reach astronomical levels. Otherwise, miners will lack the incentive to mine.

To drive Bitcoin's price to such heights in the future, I firmly believe relying solely on the Bitcoin narrative itself will not suffice. The crypto ecosystem must develop real-world applications that generate massive cash flows and establish viable commercial scenarios.

Therefore, following this logic, my conclusion is that the future of the crypto ecosystem lies with Ethereum. Only Ethereum can host such ecosystems and scenarios, and only it can truly propel the crypto industry toward practical applications and commercialization.