Why Having A Wallet Where You Own Your Private Keys Is Essential
If you keep up with current crypto events it seems that every month or so there is a new hack and millions in Bitcoins are stolen. In many of these cases, hundreds of Bitcoins were left on exchanges or mining pool wallets where these coins were more vulnerable — this is because you don’t actually own your own private keys — the exchange does. This is just one of the many reasons why it’s essential to keep your digital assets in a wallet where you have full control over your own private keys.
What is a private key?
A private key is a string of random characters used to secure the coins you hold in your wallet. This is the key that allows you to spend your cryptocurrency and it should never be shared with anyone. Giving someone your private key is like giving them a full set of keys to your crypto kingdom!
This private key goes hand-in-hand with a public key or wallet “address”. The private key allows you to verify that you have ownership over the public key and the coins connected to it. For instance, when someone wants to send you some cryptocurrency to your wallet they are sending it to the address or public key of your wallet that corresponds with the private key that you hold. This allows verification that you are the owner over this private key, and the crypto attached to it. This “trustless transfer” of cryptocurrency allows for two parties to make a transaction without a 3rd party and also without having to reveal your private key to the other person.
Owning your own private keys is an important aspect of any truly decentralized platform, whether it be an exchange, wallet, or intermediary like Coinbase. When you deposit ETH into the Totle Portfolio management system you have 100% control of your private keys, and no matter how many coins you diversify across, this never changes. Leaving your crypto in a location that doesn’t let you own your private keys is like leaving your money in bags outside a bank.
Wallets we recommend
There are a ton of great wallets out there that allow you hold onto your own private keys. When it comes to digital asset portfolio management systems like Totle, having a solid Ethereum based wallet is a must. Here are a few Ethereum based wallets that offer the option of owning your own private keys.
- MetaMask — This is our go-to wallet for Ethereum based tokens and allows you to hold your own private keys. Working as a Chrome based plugin, it simply overlays on top of your browser and can be accessed easily and effortlessly when needed. The interface is simple, yet powerful, and MetaMask is a popular option for integration with Ethereum based decentralized apps or “DApps”. We recommend using it to enter the Totle Portfolio Tournament to interact with our platform!
- Ledger — This is one of the top hardware wallets on the market. It’s is a physical device that looks similar to a USB key. It allows you to store your coins and ERC-20 tokens offline and is considered one of the most secure solutions for managing your crypto. Plus it integrates really well with the next online wallet on our list, MyEtherWallet.
- MyEtherWallet — This is one of the staple online wallets, but it is a little more tricky to use. It has a web interface as well as a chrome extension and also works with Metamask.
- Exodus Wallet — A great desktop-only client that allows you to own your private keys. They have support for a wide variety of coins and the interface is absolutely beautiful. While they support a lot of coins, they don’t yet support ERC-20 Tokens. A solid wallet for everyday use nonetheless.
As you can see there are quite a few options when it comes to choosing a wallet that is right for you. No matter what wallet you choose, it is good practice to make sure the wallet lets you hold your own private keys. No one just gives out their ATM PIN number or their login for their online banking account to random strangers to hold and the same should go for your private keys. Keep them secret and guard them close, because nothing is worse than waking up to an empty wallet! You have been warned!
