Good-day my fellow steemians it is yet another successful week at the crypto academy. I want to especially thank Professor @awesononso for his insightful Lecture on proof of keys and also acknowledge other professors in the academy for their support to the academy I will be providing solutions to the questions provided.
QUESTION 1
Explain private and public Keys in relation to custodial and non-custodial wallets.
PUBLIC KEY
The Public key as the name implies are keys that are accessible by every individual it enables individuals access funds in users wallets check the wallet balance but it doesn't permit the sharing and transfer of funds between users. They enable the receiving of assets into their wallets
They are public because they protect the interests of the users by preventing other users from transferring these funds out of the owners wallet which can be quite detrimental to the user if it happens. The decentralization of cryptocurrencies gives them a basis of security which is highly advantageous to its users than other asset allocating platforms. The main key of a cryptocurrency owner is the private key and as the name implies, it should be kept private and shouldn't be shared with a third party. Once a user looses this key the assets owned by the user is as good as gone. These keys, serve as a trustworthy mediator for transactions to go on smoothly users are able to send and receive assets comfortably without any fear of fraud.
PRIVATE KEY
This can be seen as the key that mediates the assets of a user from the influence of third party intervention it differs from the public key in the sense that this key gives access to the asset of a particular person and it also permits the transfer of funds out of the wallet of the users balance. This key should always be kept locked and protected at all times because, anyone in possession of this key can make transactions on the account of the owner and this can lead to losses. The private key enables maximum security due to the fact that it cannot be guessed randomly by any user and this gives peace of mind while making transactions. It is among the reasons why decentralized transactions are more secure than centralized transactions.
Relationship Between Public And Private Keys And Custodial Wallets.
Here i would be elaborating the relation between public and private keys and custodial wallets
CUSTODIAL WALLET
In most time all the users in use of the private key in correlation to the custodial wallet,Do not owned their private key but rather it is always owned by the platforms.Also all the users transactions made in his or her wallet is always supervise by the plafform because they have the full control of your private key.Since the plafform is having the full control of your private key,They have their way out to your funds or assest at any moment,With this all the activities going on in your wallet is not managed by the user.The custodial wallet has a very high risk to scammers,Users may start to encounter their funds not up to their actual amount in wallet because it is controlled by the plafform.We classified the custodial wallet to be a centralized plafform.Every centralized plafform all any other activities are not managed by the users but rather the third parties.
NON CUSTODIAL WALLET
This type of walllet differs from the custodial wallet because the private key in correlation of the non custodial wallet,All the activities that goes in the wallet is fully managed by the user it self without the involvement of any third parties.With the non custodial wallet all users has the chance to perform any transactions without the approval of any third party.The wallet has been classified to be a decentralized plafform because the activities in the wallet are fully controlled by the user without the involvement of the third parties.All the people using the non custodial wallet must always keep their private key in a very cool and safe placed to prevent from misplaying it,Unlike the custodial wallet it can be easily get back because they are managed by the third parties but for the non custodial wallet it is always managed by the user so it will be very difficult to get it back.
QUESTION 2
What do you think about the Proof of Keys Day? What precautions would you take when participating?
This is a highly remarkable day in the world of cryptocurrency . This day was developed by a man named Trace Mayer and it commenced on the 3rd of January during the 10th anniversary of Bitcoin on this day the Proof of Key was brought to light. The event is basically done to remind owners the essence of their private keys.
Centralized networks posses manipulative access to their customer private keys and they can manipulate the custor mers assets stored in their wallets and display fake assets on the owners dashboard. In this centralised network users entrust their assets into third party care for their assets but it has the capacity of undergoing a hack from external bodies and assets can also be lost along the line.
The centralized networks hold the right to access funds in the account of the users of which they hold accounts with. When investors store coins in a centralized system, the proof of key has been adopted by other crypto asset worldwide this remind investors on the advantages of being the sole owner of private keys
The private key gives sole access to the account of a user without third party intervention hence the private key to enable sole transactions of the owner alone this ensures maximum security of assets. This event reminds investors in the crypto world on the importance of a decentralized application.
It reminds investors the necessary precaution that should be followed while transacting on the blockchain to avoid loss of asset and also the advantage of using a Non-centalized network.
The allocation of wallet depicts specificity of accounts to avoid transferring assets to wrong accounts. Investors are meant to understand this concept while operating on the blockchain
Investors are also meant to understand that a single mistake in alphabet of the wallet can lead to the transfer of funds to a different wallet and this automatically sends the funds to a different wallet and the assets are lost automatically
It also gives investors insight on the different block chain networks that are associated with different crypto assets such the TRC20 Network. These networks are highly essential in making transfers of assets around the globe.
It can also be well emphasized that the in the transfer of assets, users need to be careful while imputing the essential details.
Do you prefer Centralized exchanges or Decentralized wallets for storing your cryptocurrencies? Why?
The Decentralized wallet gives users the intuition regarding the total control of assets without intervention of third party mediators
The decentralized wallet and the sense of responsibility of the preservation of private keys to avoid it being lost.
The Gas fee attached to the decentralized wallet is quite low compared to the centralized wallet
Take for example the Trust Wallet
Source
The trust wallet is an ethereum/crypto wallet that is used in making transactions from one wallet to another wallet the Trust wallet is a decentralized wallet with a simplified database that contains the dApps function where varieties of cryptocurrency activities are executed
The wallet has the capacity of storing coins and assets and using this application the user has 100% access to his/her assets without the influence of external factors. The Wallet provides one of the best form of security to the user due to the sole possession of the private keys which is an advantage of this wallet. Taking reference to the tragic event that happened when Bitciooin was hacked and over 7000 Bitcoin was lost this was due to the use of a centralized wallet that is controlled by a third party venture this event can occur again and it is best i protect my assets by storing them in a decentralized wallet.
Big investors store majority of their assets on decentralized networks to avoid procuring major losses as time goes.
Question 4
I could not perform this action due to a low amount of steem and tron in my wallet balance.
CONCLUSION
In conclusion, i would love to thank professor@awesononso for his insightful lecture on proof of keys the lecture actually revealed a lot to me regarding the protection of private keys
Thank you.
Hello @emmanuel-malume,
Thank you for taking interest in this class.
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