Proof of Keys- Steemit Crypto Academy- S4W7- Homework Post for @awesononso

It’s another week of the Steemit Crypto Academy and I’d like to thank prof @awesononso for delivering such a good lecture on Proof of keys. This is my homework post for this week’s lecture.

Questions

1.) Explain private and public Keys in relation to custodial and non-custodial wallets.

2.) What do you think about the Proof of Keys Day? What precautions would you take when participating?

3.) Do you prefer Centralized exchanges or Decentralized wallets for storing your cryptocurrencies? Why?

4.) Let us assume it is Proof of Keys Day:
a.) Transfer at least 20 Steem from your Binance wallet to your Steemit wallet.
b.) Transfer at least 50 TRX from your Binance wallet to your TronLink wallet.
(Provide Screenshots and make sure you have your Keys).

5.) In one statement, what is the major significance of the transfers in question 4.

1.) Explain private and public Keys in relation to custodial and non-custodial wallets.

Public Key

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A public key in this sense of cryptography is a key that is used to lock funds or asserts, this basically means that it has the ability to lock and not open.

Private Key

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A private in the same sense is a key that has a strong relationship with its respective public key and is used to unlock the funds initially locked by the public key and can be used to perform transactions.

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Custodial and Non-Custodial Wallets

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Custodial Wallets

In custodial wallets, the definition of the public and private key remains the same however, the difference is that owner has the public key but doesn't have access to the private key but with a third party, e.g. a person keeps his funds in a safe but can’t have access to it unless a third party grants access to it, basically you have funds in a safe but to use those funds, you would need someone to open it for you. Also, since the third party serves as an access point to your funds, they can also make transactions with your funds.

Problems Associated with Custodial Wallets

The main issue of the custodial wallets is the fact that a third party has access to your funds and could use it to make transactions or possibly run with your funds.

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Non-Custodial Wallets

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These types of wallets give the user full control of his/her wallet, however, to access it you’d need the private key which the owner possesses, basically, the owner possesses the private key and can access and make transactions with it. The issue with this type of wallet is the fact that anyone with the private key can access your account and could steal your funds.

2.) What do you think about the Proof of Keys Day? What precautions would you take when participating?

The fact that you trust an institution with your money and they can’t trust you with their pen rises a lot of questions, the introduction of proof of keys day is a really good move in the crypto world in the sense that, it reminds the centralized exchanges of the fact that the funds are owned by the users and not the exchange platforms and the users can decide to withdraw their funds at any time. It also serves as a checker for the credibility of the centralized exchange platforms, in the sense that, an exchange might say they have some amount of money and it might not be true, so the introduction of the proof of keys day makes the exchange platforms know of the fact that once they put fake funds in the platform, they might be exposed because of the proof of keys day.
Just as the proof of keys day has many significances, there are a few precautions one should take note of:

• Choice of keys: It is very important to choose the right wallet to use since there are many crypto wallets out there, one should make sure not to choose a wallet that has a lot of security issues since there are a lot of wallets that have experienced sorts of hacks, also, one should check the credibility of the wallet chosen and check its history well.
• Fraud check: just as the wallets are supposed to keep your funds safe and always at your disposal, make sure to research on the selected wallet and find out if it’s a legit platform and also the number of years it has been running.
• Security of Keys: make to keep your keys at a safe place and make sure you have access to it when you need them. Make sure only you have access to it.
• Depositing Address and Network channel make sure to use the right deposit address and avoid typing the address but copying and pasting it since you might make mistakes if you decide to type it. Also make sure to check the network channel through which you are depositing through, as there are many channels out there e.g. Ethereum (ECR20), Binance Chain (BEP2), Binance Smart Chaim (BEP20), Solana, Tron (TCR20), etc.

3.) Do you prefer Centralized exchanges or Decentralized wallets for storing your cryptocurrencies? Why?

Both centralized and decentralized wallets have their merits and demerits, however, I prefer centralized exchanges because:
Though there are risks involved, who’s to say that a decentralized exchange doesn’t have its risks?
Popular exchanges like Coinbase always monitor transactions and are sure to keep your assets safe.
Why choose them?

• Their user-friendly : Using a decentralized wallet is mostly difficult for newbies and even those who aren’t new to it, because, doing peer-peer transactions can naturally be complex and very difficult to do but a centralized wallet mostly makes a user-friendly interface and provide other and also incorporates other websites to their platforms which gives ease of transactions.
• Their reliability : When talking about your asserts, for that matter cryptocurrencies, it is always constant for users to ask that will their assets be safe? Centralized exchanges give you another layer of protection in this matter because with a decentralized wallet, you are basically responsible for keeping your assets safe, once you lose your keys to someone, well you know what might happen afterward. With a centralized wallet, you are naturally responsible for keeping your assets safe but the platform is also equally responsible for keeping your assets safe.

4.) Let us assume it is Proof of Keys Day:
a.) Transfer at least 20 Steem from your Binance wallet to your Steemit wallet.
b.) Transfer at least 50 TRX from your Binance wallet to your TronLink wallet.

Transhering STEEM from Binance to Steemit

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To make the transfer these are processes involved:

• Go to wallet and tap on STEEM under Spot, then choose Withdraw

• I then fill in the the details needed for the transaction and tap on Withdraw

• I then confirm the transaction

• Transaction Successful on Binance

• Transaction Successful on steemit

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Transfering Tron from Binance to TronLink

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To transfer Tron from Binance to TronLink, these are processes involed:

• Go to wallet and tap on Tron under Spot, then choose Withdraw

• I then fill in the the details needed for the transaction and tap on Withdraw

• I then confirm the transaction

• Transaction Successful on Binance
  

• Transaction Successful on TronLink

5.) In one statement, what is the major significance of the transfers in question 4.

I means I now have complete ownership of my assets.

Conclusion

As much as owning assets is good, having complete ownership of it is equally good, hensse the intoduction of the Proof-of-Keys day brings about the sense of complete ownership over assets.