Trying to Understand Non-custodial Wallets
Two months back, prior to Hive hardfork, this question never crossed my mind. I always found my Steem funds to be Safu in my blockchain wallet than at any other place.
What is meant by a Non-custodial wallet?
When I hold private keys for my wallet, I was under the impression that I am in full control of my wallet and so it can be called non-custodial wallet. But oh boy, it's not always the case!
If you trust someone with your keys for the recovery of your wallet (like when you lose your private keys accidentally); then it's not a Non-custodial wallet.
Many people on Steem never changed their default recovery account viz. steem. Even blocktrades have steem as its recovery account on both Hive & Steem chains). This means, you ultimately trust steem for the security of your wallet.
After the Hive hard fork, we started getting news of rampant freezing of random wallets on both these blockchains. But when yesterday, netuoso revealed a possible list of wallets to be frozen in tomorrow's hardfork, I was shocked to say the least. I mean, really? Can all these wallets be frozen at a go:
If you see the list it would be hard to find the basis for hand picking such a huge list of accounts. So it's hard to believe as true. But we never know!
This brings back the fundamental question of account ownership.
Are we really the owners of our own accounts on Steem?
Or do we have a false impression of ownership of our funds in our Steem wallet?
I used to understand about the risks of keeping my funds on centralised Exchanges but Proof of Keys campaign had instilled some security in my mind with its not your keys, not your coin punchline.
I thought when I hold my keys, I have nothing to worry about security of my funds. Umm... I think I was wrong!
It seems that security is always relative.
Is Seqiour secure?
Today Sequoir Exchange listed HIVE. Sequoir is very different from other centralized Exchanges like Binance, Bittrex & Huobi, in that, we hold the keys to our fund. Holding our own keys means we are not giving the custody of our funds to Sequoir. This is a great idea. But the ultimate security boils down to how secure is your Hive wallet that stores your fund.
Did you change your recovery account to something better? ...like your own alt a/c?
So in the current circumstances, we need to reassess our wallet's security.
Security assessment is an ongoing task. There is nothing like absolute security anywhere.
You got any ideas?