Steemit Crypto Academy week 3 | Homework task for @sapwood | Haedware/software wallet, centralised and decentralised wallet restoration and web 3.0 wallet.
My submission for homework task by @sapwood . Let me jump straight away to the task.
Have you ever used a Hardware/software wallet? Which one is having a better security advantage?
I am using software wallet as of now. I haven't used any hardware wallet yet but i plan to do so asap. As for Security is concerned, hardware wallets have a clear cut advantage over software wallets. Hardware wallets are also known as cold wallets and software wallet as hot wallet.
Software wallets are web based wallets on our gadgetes like phone, computer erc. These wallets have higher potential of being hacked as they are internet based. As we know that, while making transections on hot wallets , private keys are needed. After signing, the transactions are broadcasted online , that gives a chance to attackers to become privy to private key and grab the funds. Not only hacking but they are also accessible for regulations and other technical glitches as well. However, it is a fact that these wallets are easy to set up, access, use, free of cost and accept wide range of tokens. It is probably because of these reasons that, i am using software wallet too.
Hardware wallet are not connected to internet. They are also known as offline or cold wallets. Hardware wallet can be exemplified by a USB device on which keys are stored. As they are not connected to internet, therefore they are immune to web based attacks. The most secure type of cold wallet to store cryptos is PAPER wallet. Here public and private keys are printed or written on a piece of paper which is stored offline , may be with your documents. other examples are TREZOR and KeepKey etc
Offline software wallets is another option available. These wallets demand a bit more technicality than hot wallets and other cold wallet options available. Offline software wallet has 2 accessible platforms, one of which is online which holds public key and other is offline which holds private key. Here a transaction is a multistep process, transactions generated on online part of the wallet are unsigned because this part of wallet does not hold private keys. These unsigned transactions send adress to reciever/user and than the transection moves to offline part and gets signed there and than is sent to online part to be broadcasted. So in this way, private keys are not exposed online to the web.
What are the important points to consider when you deal with an Exchange(centralized) Wallet & Decentralized wallet. How do you secure/restore both types?
Points to consider.
Know your wallet/Exchange.
First and formost thing to be understood is the nature of wallet, whether we are using centralised or decentralised wallet. It is important because at the end we have to store our hard earned asset in them and share our personnel details with them. So we must have a thorough information about their working mechanism and controlling authority.
Security measures
Before storing assets or trading, knowing history in terms of security and also thr existing security measures taken by the platform for safeguarding our assets is necessary.
Learning Curve.
It is important for the beginners to know about *ease of use* of the exchange/wallet. It should be easy to use different feature offered.
Restoring Centralised wallet.
Restoring a centralised wallet is a bit easy because we gain access to such type of wallets usually by an email, password, OTP or amy combination of theee. These things are not difficult to maintain. We are making use of our emails in day to day basis , so chances of forgetting email is less likely. Even if we forget email, we still have good chances of gaining access to our wallet after verifying our identify beyond doubt.
As for password is concerned, we do usually foeget passwoeds. If so, we can reset it via mail or OTP on our mobile number. I believe restoring centralized exchange is a bit easy.
Restoring Decentralized wallet.
As decentralised wallets are non custodiaal, you are in absolute control of your assets. There is no one on the other side to whom you can ask for your identity verification to secure login, in case you misplace your keys. Only way to restore decentralised wallet is to have your keys at your hand. No keys means no access and no funds. So here must be extra vigilent . We must create a secure offline backup of our keys (private/mnemonic) to keep in touch with our assets.
Give an example of a Web 3.0 wallet and what are the distinct uses of a web 3.0 wallet? Have you ever used any Web 3.0 crypto Wallet? Examples?
Examples of web 3.0 wallet are Trust wallet, TronLink, Metamask, coinbase.
Uses of web 3.0 wallet.
Web 3.0 and internet of Things (IoT)
The Internet of things (IoT) describes the network of physical objects—“things”—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet.
source
Keeping above definition of internet of Things in mind, there are numerous examples of activities from our day to day life that are influenced by IoT in diverse fields like consumer applications (Smart home) , health care ( remote health monitoring and emergency notifications) , transportation ( intra and inter vehicle communication, smart parking, fuel pump navigation, toll deduction etc ) , farming, infrastructure , energy management, environment monitoring , defence etc.
Interaction with other DApps.
Web 3.0 wallet can serve as gateway to Cryptocurrey. Taking example of Opera 3.0 Browser that has native crypto coin wallet. Such integration help interaction among different Dapps based on same cryptocoin. This can be understood by taking an example of two racing games ( A & B) Dapps. Suppose you modify a car in game A and thereby started doing well in game A. You can take the same modified car to game B and win there too. You can buy or sell it too and earn gaming crypto coins.isn't it amazing?
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Thanks @sapwood for this lecture and task.
100% power up
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Thank you for attending the lecture in Steemit-Crypto-Academy & doing the homework task-3.
Yes, they are popular web 3.0 wallets and DeFi has further galvanized the use-case of a web 3.0 wallet. They can seamlessly interact with dApps, fully automated, yet the control remains decentralized at any given time because, for every operation, it will prompt you to sign a transaction powered by Smart contract.
I would love to see your own web 3.0 experience of a wallet-- "how do you interact with a dApp using TronLink or any other wallet of your choice".
Thank you.
Homework Task -3
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https://twitter.com/Qamran7007/status/1364897712336818178?s=20
I am always inspired by your posts. Thanks.
Oh thank you. Nice to see you after long time.