What is Not Your Keys, Not Your Coins phrase in the World of Cryptocurrencies?

Is your cryptocurrency really yours, if you do not have the private keys?. Not your keys, not your coins is a popular expression in the world of cryptocurrencies and very important one at that. Without owning your keys, you wouldn't really be in control of your coins. We’re sure many crypto players out there have heard this phrase. “Not your keys not your coins.” 

So, what about with the phrase?. And why does it matters?. Well, we have the answer for you. Let's dive into it. Similar to bank account number, cryptocurrencies are sent to a receiving address. The technical terms for this address is the public key. 

When someone sends you some bitcoin, they will send it to your public key. This key is absolutely important. Anyone that has access to the private key can access the funds on the public key that it's linked to. 

In simpler terms a private key is similar to a password. A means of identifying you as the true owner. When speaking of “not your keys, not your coins”, it refers to your private key. Cryptocurrency was created in response to a money and banking system that centralizes power away from the individual. With this in mind, handing over control of your funds to a third party definitely goes against the characteristic that cryptocurrency was built on. 

But there are also some serious practical drawbacks to entrusting your cryptocurrency to a third party. And these fall roughly into two categories first secretaries: 

1. Security Risk

The most obvious risk of keeping your funds on an exchange is the risk of losing them as the result of a hack. As of today, there are a total of 51 hacking events, with lost funds amounting to all of approximately $2.1 billion at the time of these hacks. The total amount does not include stolen user data and undisclosed amounts of stolen funds. 

Even if you don't become the victim of an exchange hack, there's always a risk that an attacker will manage to drain your personal account on an exchange or that your data will be compromised. If you do decide to keep your crypto with a third party. Be sure to take advantage of all the security features offered, always enable two-factor authentication and stay vigilant. 

2. Loss of Control 

If your coins are stored with a third party, anything you want to use them for will be mediated by that third party. By keeping your crypto on an exchange, you are essentially hand over control of your own coins. Not having direct control of your coins can also limit your potential returns. 

If you don't own a lot of cryptos, you trade frequently or you are comfortable exchanging security for convenience. You may decide that keeping your funds on an exchange is the best decision for you. But, if you find yourself agreeing with the “Not your keys, not your coins” philosophy. You'll need to find another way to store your crypto. 

CoinBox finance is also one of the wallet that give the capability to their users to get their Private Key at hand. So that you can keep by your own or import it into any other decentralized wallet. CoinBox’s Mobile Wallet provides an overall solution to solve the crypto and blockchain industry problems. In building the ecosystem, they apply the policy of decentralizing, distributed and transparent.

Reference: https://youtu.be/-iLkEmP7-pI 

Share :