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

anyiglobal (63)Beginner[2,3,4,5]in SteemitCryptoAcademy • 3 years ago (edited)

Hello CryptoAcademy Family,

How are you doing today? Hope you're fine? Alright!!! Today, I have learnt a new thing from this wonderful course that is taken by our able Prof @awesononso, Thanks so much Sir!

In this post I will be answering the following questions listed below:

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:

i) Private Key in relation to Custodial Wallets:
Before I explain what is Private key, it is importamt to tell you what is Custodial Wallet first.

Custodial Wallet are those wallets in which the owner of the wallet doesn't have a direct access to his/her funds. A central authority Control the private key and funds in the wallet and use it to do whatever they want to do with it without your permission. By doing so, they provide a false wallet balance to the owner and the owner will think that the balance is real. Primarily, your private key and funds are in custody to a third party agent.

For an example, when you put your funds in the bank, your funds is no more in your custody. The bank can decide to use your fund and do whatever they want by making investment or trading with your money for profit. They sign transaction for you because they're in custody of your Private key and funds.

images (6).png source

ii) Private Key in relation to Non-Custodial Wallets:
In Non-Custodial wallets, you have a direct access to your funds because you're with your private key to sign transactions. Your private key and funds are not in the custody of a third party. This type of wallet gives the owner flexible control over his funds! He controls his funds as he wishes.

In Non-Custodial Wallets, there's no intermediary to process transactions. The owner has the full control (100%) over his assets!! Your private key is used to sign transactions, which means you can sign transactions as many as you want because you're in full control of your wallet.

images (7).png source

Public Key is used to encrypt coins before it is sent on the public domain. The Public key can be used to lock coins in the wallet and you cannot unlock those coins with the public key!

images (8).png source

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

Proof of Keys Day is a day in which investors withdraw their funds from centralized wallet to decentralized wallets in order to retake control over their funds by handling the private key again.
Proof of Key always occur on every 3rd of January, a day in which the first Bitcoin block (Genesis Block) was mined! This day is a D-Day in people's mind because it helps people regain their financial freedom.

Reasons for Proof of keys Day

a) So that we have full controls over our coins in a decentralized exchange. Leaving our coins in a centralized Application sometimes displays false balance to us which can bring biasness in the amount of coins you can withdraw. Withdrawing our coins to a decentralized wallets perhaps will expose this kind of behavior.

b) To Celebrate the Bitcoin Genesis Block:
The Bitcoin Genesis block was mined on the 3rd of January and that is why the proof of Keys Day event is celebrated on that day. The event helps people memorize the D-Day that started the Crypto contemporary era.

c) To Teach people to use private keys:
The proof of keys day is responsible to enlighten people, on how to handle their own coins in decentralized wallets, especially newly joined investors in the Crypto space. The proof that shows that the coins in your wallet and that you own it is the Private key. These processes reminds people that cryptocurrencies is still ruling. As an investor and you don't know how to handle this private key, I don't think you're a real investor. You have to know how to handle this private key efficiently to sign transactions.

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

To me I prefer using decentralized wallets for storing my cryptocurrencies because it gives me full control over my assets, no central authority is there to control my assets for me unlike centralized wallets that is controlled by central authority.

In decentralized wallets, Am in control of the private key which I will be using to sign transactions and decrypt coins that is being encrypted by the public key.

The Transfer of 20 steem from Binance wallet to Steemit wallet

Step 1: I opened my Binance and click on spot, then I click on Steem, and then click on Withdraw

Step 2: After clicking on withdraw, I entered my steemit wallet username, the memo and the amount to withdraw I clicked on withdrawal

Step 3: I confirmed the transaction

Step 4: After I confirmed the transaction, I received the money on my steemit wallet

Tron

Step 1: From Binance I opened TRX and clicked on Withdraw

Step 2: I entered my withdrawal details

Step 3: I Clicked on withdrawal

Step 4: I confirmed the transaction

5.) In one statement, what is the major significance of the transfers in question 4.
The significance of the transfer is that I withdrew my coin from Centralized wallet (Binance) to Decentralized wallet (Steemit) to show Proof of Keys!

Conclusion

Decentralized wallets remains the best wallet so far for storing your coins because it gives you full control of your coins without the intervention of any central authority unlike centralized wallets that is controlled by central authority!

Cc:
@awesononso

#awesononso-s4week7 #cryptoacademy #club5050 #steemexclusive #proofofkeys #nigeria