Keep Your Private Keys Safe- Why It’s So Important to Store Them Offline
Stepping into the spotlight in 2017, crypto-assets have quickly become a hot topic of conversation. However many people fail to grasp how value is transferred between people, as well as how to keep their assets safe. Cryptocurrencies may have put the power of finance back in our hands, but it also leaves us liable to cyber-crime. With this in mind, it’s important to understand what public and private keys are, how they affect you, and how to effectively keep your private keys safe from attack.
Public and Private Keys
As you may be aware, the ‘crypto’ in crypto-currencies refers to cryptography. In its simplest form, cryptography is a means of encoding or decoding information. In fact, it is this unique feature of blockchain technology that is responsible for removing third-party validation and human interference. In order for the network (blockchain) to confirm a transaction, it uses encrypted mathematical equations by matching your public and private keys.
The ‘keys’ themselves are actually a string of numbers that point to an address/wallet and identify the rightful owner. When you create a new wallet:
- The public key is used to create the code-the encryption.
- The private key is used to decode or decrypt the code.
The Private Key Is the Key to Your Success
When you are ready to send/receive tokens, or to make a purchase, you do so by giving the other party your public key. This points to your wallet address and gives them virtual access to your wallet. However for the transaction to go through, it must also be signed digitally by using the private key. To understand this more simply:
- Think of the private key as your digital signature.
- You use it to confirm that you, the owner of the coins, approve the transaction or deposit address, or to generate a new public key.
- The private key signs the transaction and allows the recipient to receive the tokens via the public key.
- The network (blockchain) is designed to automatically approve any transaction where the public and private keys match.
This means that anyone who possesses your private keys can access your funds. You never want to reveal your private keys.
If You Don’t Own Your Private Keys, You Don’t Own Your Coins
When many people ‘dip a toe’ into the crypto world, they don’t realise they’re essentially putting their hopes and dreams into someone else’s hands. By leaving your assets on an exchange, or in hot wallets, you are actually relying on a third party to look after them. It’s the ability to fully control your own finances that gives credence to the rise of crypto-currencies in the first place. And with more than $200m worth of crypto hacked or stolen in 2017 alone, keeping your private keys safe has never been more imperative.
How to Keep Your Private Keys Safe
One of the common ways to keep your private keys safe is by generating and printing a paper wallet. This cold wallet storage is immutable to cyber-attacks, but it also puts a lot of value (and future potential value) into something that cannot be recovered if it is lost. Not to mention the inefficiency of then needing a secure location to store the paper wallet, like a safe or a safety-deposit box.
Another common means of storage for private keys is on your phone or computer. Whilst it is a convenient way to access and move your funds, it is considered a hot wallet. Attempting to keep your private keys safe by leaving them on an internet-connected device leaves you open to hackers, phishing scams, viruses, and other malware.
The best method to keep your private keys safe lies in an offline storage device. The Secure Wallet combines the best of hot and cold storage to provide unparalleled security with the convenience of a bank card. The wallet is never connected to the Internet, however, you can interact with it wirelessly through the companion app. This lets you choose how and when to use the wallet, and provides a means to recover your assets if you lose the device.
Information on this channel for educational purposes only. It should not be considered financial advice and all users are advised to do their own research. See disclaimer
About ECOMI
ECOMI is a technology company based in Singapore and is leading the way in the emerging digital collectibles space. ECOMI offers a one-stop shop for digital collectibles through the VeVe app bringing pop culture and entertainment into the 21st century.
The VeVe app allows users to experience true ownership of premium digital collectibles. Through the app marketplace, users can obtain common, rare, or one-of-a-kind digital collectibles, share these across the social network service, and exchange them with the VeVe community, all from the palm of their hand.
ECOMI sees digital collectibles as a new asset class that offers intellectual property owners the opportunity for new revenue streams in the digital landscape. Digital streaming, gaming, and in-app purchasing have become a multibillion-dollar market and the next to join this digital trend is the pop culture and collectibles industry.
Or, for more information please join the community on Telegram, Twitter, and Facebook.
