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Not Your Keys, Not Your Coins. It&039s That Simple. | Ledger

Not your Keys, Not your Coins

Key Takeaways:

“Not your keys, not your coins” is a popular expression in the world of cryptocurrencies – and a very important one at that. Without owning your keys, you wouldn’t really be in control of your coins. Curious as to why? Well, we have the answer for you – let’s dive into it.

what are “your keys”?

Like a bank account number, cryptocurrencies are sent to a receiving address. the technical term for this address is the public key. when someone sends you some bitcoin, they will send it to your public key. it’s called public, since you can send it to anyone without compromising your crypto.

Reading: Your keys your bitcoin

There is, however, another key that is linked to your public key. that would be the private key. this key is absolutely vital. Anyone who has access to the private key can access funds from the public key to which it is linked. In simpler terms, a private key is similar to a password: a means of identifying you as the true owner. when you talk about “not your keys, not your coins”, you mean your private key.

the difference between accessing and owning your coins

When you log in to your favorite exchange, it can appear that you actually own the coins in your account. after all, you need to be logged in to get access to them, right?

wrong. It looks like you have full control of your assets… until you try to withdraw more crypto than the platform allows, or below a certain threshold. in fact, the exchange could take a cut of any cryptocurrency transaction you make. they can do this simply because you don’t have the private keys of the crypto assets in your account, they do.

This phenomenon is not limited to exchanges: it applies to any wallet provider that does not allow you to possess the keys of the associated funds. if you do not own the private keys, then you are not the true owner of the funds; I would be entrusting it to a third party. this means that they can essentially do whatever they want with the cryptocurrencies in their account.

why is it important to have my keys?

See also: Bitcoin vs. Bitcoin Cash vs. Litecoin: Which Should You Invest In?

There are a plethora of reasons why you would want to own your keys, rather than leave them in the custody of a third party, which requires you to trust them with your funds.

The most obvious is accidentally entrusting it to malicious actors. if he has entrusted his money to a malicious third party, chances are he will never see it again. fortunately this is quite unlikely with established companies.

Even then you will never have full control of your own money with them. As mentioned above, they may set certain restrictions such as a maximum withdrawal limit or fees associated with the use of their services. they can decide what you can do with your hard-earned money. Also, if your platform has any technical issues, you are basically locked out of your cryptocurrencies. Bottom line: As long as you don’t own your keys, you won’t have financial freedom and your funds will remain at someone else’s mercy.

In addition, you will also have no control over the security of the platform system: you are outsourcing the security of your cryptocurrencies to them. Unfortunately, over the years, there have been major hacks that have amounted to around $2 billion stolen.

The opposite is true if you have your own private keys. by having the private keys, you can set your own rules. there will be no one else to tell you what you can or cannot do with your own cryptocurrencies. By having your own keys, you own your own coins and can enjoy financial freedom.

However, having your own keys comes with an important responsibility: you must ensure that you are the only one with those private keys. if someone else manages to get their hands on them, they can access and take your cryptocurrencies.

See also: How to choose the best Bitcoin wallet | How Do Bitcoin and Crypto Work? | Get Started with Bitcoin.com

That’s where we come in.

ledger: your keys, your coins, safe

At ledger, we create hardware wallets to give you the path to financial freedom with the highest level of security for your private keys, thus your cryptocurrencies.

Our devices store your private keys without exposing them to your computer or smartphone. this means that even if someone were to hack into your computer, he would still not have access to your precious crypto assets. we use only the top-notch secure chips known as secure elements to withstand even highly sophisticated physical attacks on our hardware wallets.

Through our hardware wallets, we provide peace of mind to our users by offering a secure, accessible and easy-to-use solution. In short: With our devices, you still own your keys, so you own your own coins securely.

however, it doesn’t end there. With our expertly designed software, Ledger Live, you not only have full control over your assets. We also provide a single platform to manage multiple cryptocurrencies, where you can directly buy your favorite coins and even passively earn more for certain coins by participating. all while maintaining the high security standard we have set for ourselves. Over the years, Ledger Live has become a central starting point for anyone looking to join the world of cryptocurrency, and we’re still working on adding even more exciting new features.

keep learning! If you like to get acquainted with cryptocurrencies and the blockchain, check out our Blockchain School video on how to keep your cryptocurrencies safe.

See also: The FED Released A Study Of The Lightning Network. These Are Their Conclusions | Bitcoinist.com

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