Steem Tips: Understanding Wallet Security
By @shortsegments

Your Steem wallet is unique amongst other cryptocurrency wallets and has several security features which are unique.

I would like to review those security features, so you understand them and can use these Steemit wallet security features to help to prevent the theft of your Steem and SBD.

Security Feature number one: #Steem Power

You are paid rewards on the Steemit platform for posting, commenting and upvoting in #Steem” or #SBD. The strength or value of your personal vote depends on how much “Steem Power” you have. Your wallet has a menu option called #Powering-Up. If you use this feature you change the Steem in your wallet into #Steem_Power. This increases the value of your vote. But did you know that #Powering_Up your Steem or Steem Dollars to Steem Power is a security feature?

Powering Up is a security feature because you can’t withdrawal Steem Power, you have to convert it back to Steem.

The process of converting Steem Power to Steem is called “Powering Down”. The Power Down process has rules, you can only Power Down 1/4th of all your Steem Power once every seven days. So it takes 4 weeks to Power Down all your Steem Power to Steem. This is a security feature because most crypto currencies exist in one form and they only have one password, which is usually called your “Private Key”. So if someone gets your “private key” they can transfer your cryptocurrency out of your account to their account and basically steal all of it the same day. However in the case of Steemit our cryptocurrency exists in a liquid, easily transferred form called Steem or Steem Dollars and as a less liquid and nontransferrable form called a Steem Power. If someone gets your passwords and wants to withdraw your Steem Power, they have to initiate a “Power down”. This converts your Steem Power to Steem. Each “Power down” takes 7 days. Each “Power down” is limited to 1/4th of your total Steem Power. So it will take someone seven days to steal your Steem and they can only get 1/4th of your total Steem at a time. That means it takes 4 weeks to Steal all wyour Steem.

Second Part of this security feature

Did you know that every time you sign into your Steemit account and check your wallet it tells you if your “Powering Down” or converting Steem Power to Steem? So because it takes 7 days to “Power Down” or convert your Steem Power to Steem you have 7 days to catch any attempts to steal your Steem. If you see this and you didn’t start it the withdrawal you can cancel it and then use your Master password to change all your other passwords. I like this security feature because I think it increases my wallet security and I think it increases price stability by reducing impulsive selling in reaction to bad news and it encourages commitment to the platform.

Security Feature number two: Steem Savings Account

If you don’t want to convert all your Steem to Steem Power because you might need it and want to keep it “liquid” or readily available you have another safe alternative built into the wallet called Savings. If you transfer your Steem or SBD into savings, it takes 3 days to get them out. In order to get your money out of Savings you initiate a withdrawal. Then every day for three days when you sign in and look at your wallet it says “Withdrawal in Progress”. So if someone steals one of your passwords and starts a withdrawal you have 3 days to see it and stop it. Then you can use your master password to reset your other passwords.

My Final Thoughts

One of the beauties of cryptocurrency is its decentralization, so there aren’t any bank employees telling you when and how you can access your money. But this also means there isn’t anyone guarding the way you access your money; your passwords.

Steem is a unique cryptocurrency because of its multiple passwords and wallet protections. I don’t know of any other cryptocurrency with these security features.

I suggest you utilize to them to protect yourself.

Learn more here: https://steemit.com/steemit/@shortsegments/security-rules-for-your-steemit-account

Thanks for stopping by and reading my blog.
If you have questions please let me know.
Thanks
@shortsegments

References
1 Steemit White Paper
2 Steemit Blue Paper
3 Steemit FAQ

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