“Not your keys, not your crypto.”
- A public key (used to generate your wallet address)
- A private key (the 'password' for your crypto wallet)
on centralized exchanges, you have usernames and passwords.
but not your private keys/seed phrase.
so it’s a custodial account.
You need the platform’s approval to access your assets.
Your public key is created via a one-way process.
So that private key maps onto the public one.
You can prove ownership of the public key without actually revealing the private key.
first level: protect your keys.
public key + wallet address: used for interaction
seed phrase + private key: hide them
store the private key on fireproof cards.
And then put them in the safe deposit box.
If you want to use DeFi or exchange your crypto,
get a hardware wallet.
Read @withsmoothie’s article on cold wallets:
It isolates your private key from the rest of the world.
You download your keys onto the device and only plug it in when you need to trade.
It’s like a safety deposit box with multiple keys.
The wallet requires multiple signatures to approve a single transaction.
You need to find trusted people for your multi-sig.
even if you lost your private key, a thief still can’t trade your money.
@VitalikButerin prefers this way.
It includes all the levels above.
Spread your funds over many types of wallets to protect funds.
Like what Voldemort did to protect his soul.
Self-custody also entails risks.
You might send crypto to wrong address or lose your seed phrase.
Trusted Custodians like @BitGo and @Gemini offer custody services.
They specialize in crypto security.
And they got insurance if something bad happens.
If you lose your seed phrase/ private key,
social recovery needs signers to give you back access to your assets.
@loopringorg and @argentHQ offer the tool.
Many feel disappointed about web3 post-FTX.
Many initiatives are essentially centralized platforms built on decentralized foundations.
But finances are vital parts of web3 economy too.
I love the reminder of @TPan_Web3:
The beauty of Web3 is that the foundational technology of blockchain has a multitude of applications.
Web3 adoption and development are still on the way, to a better future.
“multi-party computation” requires more than one participant to authorize transactions.
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