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

in hive-108451 •  7 months ago 

Hello fellow steemians, it's a wonderful week and a great pleasure to attend this week's lecture of the beginner's course. All thanks goes to the Almighty Allah and also a big thanks goes to Professor @awesononso who took his time and make sure to digest this lecture to our understanding. This lecture was really helpful as I learned a lot from it.

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Below is my homework submission post.



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

Public keys are keys that enable us to safeguard and secure our cryptocurrency assets within a specific wallet. Public keys enable us to have access and full control over the wallets we store our assets, however, we can only deposit assets into our wallet with the public keys but we can not withdraw our assets with the public keys. In order to withdraw assets from our wallets, we need to use the private keys. Users can have fully access to their public keys or they may not depending on the wallet they choose to deposit their assets.

Private keys on the other hand refers to the keys that enable us to ratify and approve the withdrawal of assets in our wallets. This basically means that private keys gives us the full control and authority to withdraw assets from our wallets just like how the public keys allow us to deposit assets in our wallets. Users can also have full access to their private keys or they may not depending on the wallet they choose to withdraw their assets from.


Since we now know what public and private keys are, we will now be talking about the types of wallets we have and this wallets are two. We have the Custodial wallets and the non-custodial wallets.


Custodial Wallets


Custodial wallets are wallets in which a third party monitors and control your private keys. In custodial wallet, we are putting our hope and trust on a third party to protect and safeguard our assets or funds. The third party then refund the assets back in a situation we want to send our assets somewhere else or if we want to trade them. An advantage of the custodial wallet is that it reduces the user responsibility of protecting his assets or funds.

Users need to have full trust in the custodian or manager that is protecting their funds which in most cases are usually the cryptocurrency exchanges. The custodial wallets we have nowadays are mostly exchange wallets which are web-based.


Non-custodial Wallets


Non-custodial wallet is a type of wallet which allows the user to have absolute control of his keys and his funds or assets. There are many users who value privacy a lot thereby feeling more secured and comfortable with the non-custodial wallets. There are also investors who store or keep huge quantities of crypto assets on their exchange accounts and they do not feel comfortable by handing over their keys or assets to a third party. In non-custodial wallets, third parties are removed and eliminated between users and their crypto assets.

Unlike custodial wallets which can be web-based, non-custodial wallets can be browser-based which usually comes in different forms. Non-custodial wallet sometimes come in the shape of a software which is installed on desktops or mobile phones or devices. This wallets can also come in the form of hardware devices and many others. Despite that the non-custodial wallet can come in different shapes and forms, the most safe and secure way to store your crypto assets is by employing the hardware wallets.


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

The establishment of Proof of Keys Day is one of the best way to remember the existing centralized cryptocurrency administration agencies that the crypto assets were built and developed to give their owners the financial freedom they are looking for. Not only that, this day was also established as a confirmation measure that the transparent and clear management of our cryptocurrency assets are carried out correctly.

On the Proof of Keys day, users and investors will assess and test the centralized test exchanges to make sure that they have not mishandled the assets or funds that are left in their possession and control. The only alternative left for users to achieve this financial freedom is by pursuing complete custody over their private keys.

The Proof of Keys day is symbolized by a slogan in the cryptocurrency world as "not your keys, not your wallet". This slogan simple means that, if you don't have full control of your keys, then your wallet do not belong to you. In the celebration of this day, crypto assets owners transfer any asset they are holding in a custodial wallet which are being protected by a third party crypto exchange into their individual or non-custodial wallets.

We must also know that, when transferring or withdrawing our assets from custodial wallet to our individual or non-custodial wallet, it is in our responsibility to control and protect our crypto assets very well. The security of the centralized exchange will rely on the protection mechanism we are using to properly manage our private and public keys.


In maintaining this keys during the transfer, users must take the following considerations into account:


  • We must make sure that we store our public and private keys in a very safe and secure place. In case we lost our keys, we can easily retrieve them from the stored sources. Apart from storing them, we must make sure to keep them away from third parties.
  • We must also decide and choose the best wallet to store our cryptocurrency assets. Before choosing a wallet, make sure to do your background checks and make analysis on the benefits and dangers involve in storing your assets there.
  • Another thing to take into considerations is avoiding suspicious links and sites when transferring your assets. Most of this sites are controlled by scammers and fraudsters and if care us not taken, you can lost your assets to them. Always make sure to check that the sites and links are authentic and valid.


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

To first choose between centralized and decentralized exchanges as the medium to store and manage our assets, there must be several factors one must take into consideration before making his preferred choice. For more safety and reasons of relief for self surveillance of my crypto assets, I will choose to store my cryptocurrency assets in a decentralized wallet for protection.


The reasons why I am choosing the decentralized wallet over centralized wallet are listed below:


  • I have full control and freedom to manage my crypto assets safely without including a third party exchange.
  • I can interact with decentralized wallets and De Fi without any form of difficulty.
  • One can protect and safeguard different types of tokens in the same wallet. For example, a user cann secure both his ERC-20 and TRX-20 tokens in one wallet. There is a possibility of him adding NFT's tokens in the same wallet.
  • I can make currency exchange in my wallet directly without any form of difficulty.
  • This wallet enable genuine and pure Peer-2-Peer(P2P) digital transactions thereby eliminating a third party from the transaction whilst increasing privacy.

After this being discussed, I wouldn't recommend decentralized crypto wallets for beginners or new users because you will require a specific level of skill and expertise to protect and preserve your wallet. But the advantage involve in the constant interaction of this exchange is that, the more you learn and research into cryptocurrencies the more enticing the decentralized wallets will become. So for beginners and inexperience users or investors, it is advisable to first begin with the centralized exchanges as that is somehow simple to understand and manage than the decentralized wallets or exchanges.


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).

I am going to demonstrate the steps to follow in order withdraw steem from my Binance wallet into my Steemit Wallet. Binance is a centralized exchange while steemit wallet is a decentralized exchange.

  • You first of all need to login to your Binance wallet and click on the amount of steem you have in your spot wallet.

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  • The next thing to do is to click on withdrawal as shown in the screenshot below.

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  • You then provide your address that you want to send the steem into, put in the memo for the transfer as well as the amount of steem you want to transfer. In the screenshot below, you can see my address, memo and the amount of steem I want to transfer. You then click on withdraw.

Screenshot_20211021-201603_1.png

  • The next thing is to confirm your transaction. So carefully look through the details and make sure everything is correct. You then click on Confirm transaction as shown in the screenshot below.

Screenshot_20211021-201703_1.png

  • You can go in to your transfer history to check if the transfer is completed successfully.

  • The last step is go into your Steemit Wallet to confirm the transaction. And you can see in the screenshot below that the transaction was successfully completed as I received the steem in my wallet.

Screenshot_20211022-003348_1.png


I am also going to demonstrate the steps to follow in order to withdraw TRX from my Binance wallet into my Tronlink Wallet. Binance is a centralized exchange while Tronlink wallet is a decentralized exchange.


  • After logging into your Binance wallet you have to click on the amount of TRX you have in your spot wallet.

Screenshot_20211021-202930_1.png

  • The next thing to do is to click on withdrawal as shown in the screenshot below.

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  • Login to your Tronlink Wallet and copy the address for receiving TRX.

Screenshot_20211021-203238_1.png

  • You then provide the address that you want to send the TRX to, choose the network for the transfer as well as the amount of TRX you want to transfer. In the screenshot below, you can see my address, network and the amount of TRX I want to transfer. You then click on withdrawal.

Screenshot_20211022-005243_1.png

  • The next thing is to confirm your transaction. So carefully look through the details and make sure everything is correct. You then click on Confirm transaction as shown in the screenshot below.

Screenshot_20211022-005325_1.png

  • You can go in to your transfer history to check if the transfer completed successfully.

  • The last step is to go into your Tronlink Wallet to confirm the transaction. And you can see in the screenshot below that the transaction was successfully completed as I received the TRX in my Tronlink wallet.

Screenshot_20211022-003619_1.png


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

The major significance of the transfer is that it actually proves that the funds and assets in the centralized exchange belong to us, not only that, it also allows us to practice how to handle our private keys and how to make transfers in a situation that we want to transfer huge amount of funds or assets in the future.


Conclusion

The celebration of proof of keys day is really important as it sends message to the centralized exchanges that the crypto assets stored there do not belong to them neither do the keys belong to them. This day is also significant as it gives beginner's the opportunity to transfer their assets between two wallets. This serves as a practice in case there is a situation which demands the transfer of huge amount of money. We only own our funds in our wallet if the keys are handed over to us. Some of this central exchanges cannot be trusted because this exchanges in the past have been hacked by scammers and hackers. Let's try as much as possible to keep our keys safe and far away from any third party.


Thank you.


Cc: @awesononso

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