Hello everyone, you are all welcome to the 7th week of season 4 crypto academy. Here, I will be talking about proof of keys. Thanks to professor @awesononso for the wonderful lecture.
QUESTION 1
EXPLAIN PRIVATE AND PUBLIC KEYS IN RELATION TO CUSTODIAL AND NON-CUSTODIAL WALLETS.
Before I answer this question, I will like to firstly, explain what custodial and non-custodial wallets means.
Custodial wallet
Custodial wallet are wallets whereby a user private key is controlled by a centralized authority. It’s Just like giving someone your property to hold for you. Custodial wallet are used by centralized wallets for example, binance.
Image edited by me on canva. Image source
In custodial wallet, the centralized authority can use your funds for any purpose without your permission.
Non-custodial wallets
Non-custodial wallet is a type of wallet whereby a user have a full control over his/her private key.
An example of this type of wallet is Trust wallet.
Image edited by me on canva. Image sourcePublic key in relation to custodial and non-custodial wallets.
Public keys are pairs of keys that are used for encryption during transactions. The public keys are created by an asymmetric algorithm. The public keys can be known to the public. The public key is associated with a private key which is known by the owner alone. Both the custodial and non-custodial wallet uses the public keys because without the public key, transactions in custodial and no -custodial wallets can’t take place.
Private key in relation to custodial and non-custodial wallets
private key are keys used for decryption during transaction in a wallet. This keys gives access to the funds in a wallet.
In the custodial wallet, the private key is being controlled by a central authority. This means that in the custodial wallet, a user doesn’t have full control over his/her funds because of fact that the private keys are being controlled by a third party.
In the non-custodial, because in decentralized, the user has full control of his/her private key. The user has total control of his/her funds.
QUESTIONS 2
WHAT DO YOU THINK ABOUT THE PROOF OF KEYS DAY? WHAT PRECAUTIONS WOULD YOU TAKE WHEN PARTICIPATING?
Image edited by me on canva. image source
The proof of keys day is an event that is celebrated on the 3rd of January which was brought up in 2019 by Trace Mayer. It’s a day where investors withdraw their crypto from a centralized wallet and move it to a decentralized wallet.
The proof of workday is celebrated on the same day the first bitcoin Genesis block was mined.
It’s a significant day that shows the supremacy of blockchain. The fact is that one can have total control over his/her crypto in a decentralized wallet that operates on blockchain.
The fact that centralized wallets have control over investor funds is very risky so the proof of key day, investors pulls out their crypto from centralized wallets so that they Know if the centralized wallets have the funds they claim they have.
precautions i will take when participating
To participate in the proof of workday, some precautions should be taken to avoid mistakes or anything going wrong.
In participating in the proof of keys, a user should make sure he/she uses the correct wallet address.
Be very careful while withdrawing a coin so you don’t mistakenly use a wallet address of a different coin.
For example, if you are moving your Bnb and you mistakenly used the Tron wallet address, you will lose the BnB.
Use a temporal wallet address when moving your funds to avoid being tracked. Exchanges can track the wallet you are moving your crypto into so it’s advisable for users not to use their main wallet address but rather use a temporal wallet address.
Consider the withdrawal limit of the centralized exchange. In most exchanges, a user has a withdrawal limit if his/her account is not verified. If your account is not verified, there is some amount you can’t move once. So because of that, a user will have to move it part by part and this will delay or may not even move everything before the proof of key day is over. If a user has a very large amount of funds in a centralized exchange and your account is not verified, It's advisable he/she verifies his/her account early enough before the proof of key day.
OUESTION 3
DO YOU PREFER CENTRALIZED EXCHANGES OR DECENTRALIZED WALLET FOR STORING YOUR CRYPTOCURRENCIES? WHY?
Image edited by me on canva. Image source
I believe that having total control of your funds is safer than not having total control of your fund.
I prefer storing my cryptocurrencies in a decentralized wallet because I will be able to have total control over my crypto.
If your crypto is stored in a centralized exchange, you won’t be able to have full control of your crypto because it’s a custodial wallet which means your private key is being controlled by a third party which is not safe for investors. If peradventure, anyone hacks a centralized exchange, users are at the risk of losing all their funds.
QUESTION 4 (a)
LET US ASSUME IT IS PROOF OF KEYS DAY: TRANSFER AT LEAST 20 STEEM FROM YOUR BINANCE WALLET TO YOUR STEEMIT WALLET.
Firstly you log into your Binance and click go to my steem wallet and click on withdraw.
Screenshot got from my binance app
Then you put in your steem address, memo, and the amount of steem you want to withdraw. After filling it in, you click on withdraw.
Screenshot got from my binance app
Then you will be taken to a page where you will have to confirm the transaction. Then You click on confirm and verify the transaction through the confirmation code you will receive from your email and phone number. After confirming the transaction, you will be directed to a page where you will click on view history to see the transaction history.
Screenshot got from my binance app
I successfully received the steem in my steem wallet.
Screenshot got from my steemit wallet
QUESTIONS 4 (b)
TRANSFER AT LEAST 50 TRX FROM YOUR BINANCE WALLET TO YOUR TRONLINK WALLET. (PROVIDE SCREENSHOTS AND MAKE SURE YOU HAVE YOUR KEYS).
To do this, firstly, you log in to your Binance app and go to your Tron wallet. Then you click on withdraw
Image got from my binance app
Then you fill in your Tron wallet address
Image got from my binance app
Then you confirm your transaction. After confirming your transaction, you will be taken to a page where you will see that your transaction has been successful and you click on view history to see the history of the transaction.
Image got from my Tronlink wallet.
I have successfully received the Tron in my Tronlink wallet.
Image got from my Tronlink wallet.
QUESTION 5
IN ONE STATEMENT, WHAT IS THE MAJOR SIGNIFICANT OF THE TRANSFERS IN QUESTION 4.
The major significance of the transfer in question no 4 is “A user can transfer his/her crypto from a centralized wallet to a decentralized wallet to prove ownership of his/her private key.”
CONCLUSION
The invention of proof of key day has made so many investors that have their crypto stored in a centralized wallet know if their crypto is safe or not. It’s also a day that shows the supremacy of blockchain. We are all left with a choice of storing our crypto in a centralized or decentralized wallet. My regards to professor @awesononso for the wonderful lecture.
Hello @sir-charles-jude,
Thank you for taking interest in this class. Your grades are as follows:
Feedback and Suggestions
I noticed some content that were paraphrased from other sources. Always be as original as possible when you write.
You did not properly get the idea in question 5.
Thanks again as we anticipate your participation in the next class.
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