Proof of Keys- Steemit Crypto Academy- S4W7- Homework Post for @awesononso by @swaylee

Hello everyone and welcome to this week's assignment post. Here I would be educating readers on proof of Keys day, the significance of private keys and we would also be celebrating the proof of Keys day here on Steemit courtesy of prof. @awesononso. I would love to begin this assignment by saying that when it comes to activities involving cryptocurrencies and transfer of funds, we must handle them with absolute caution as loss of digital funds equate to loss of our money/capital as investors. Here are the questions, we will be attempting one by one. Let me start with,

1.) Explain private and public Keys in relation to custodial and non-custodial wallets.

When looking at this question, it might confuse you abit but I think I have a good idea on what the question wants from us. Now when looking at the meaning of a private key, we can say it's a Cryptographic key usually consisting of a string of numbers and alphabets which is used to decrypt the text that was previously encrypted. Now this previously encrypted text is actually called a ciphertext.

Now concerning the public key, this key is used for the purpose of encrypting a plaintext or message as seen in the picture above. so the two keys work hand in hand as one is needed to encrypt and the other is needed to decrypt the ciphertext into its original form.

In order to relate the keys with the wallets, we have to know what each wallet does and what they are. Custodial wallets are wallets where the private keys are kept in the custody of a third party. Here we basically entrust a third party to make use of our private keys to make transactions on our behalf (when we want them to) and give the funds back to us when we want to go somewhere else. Non-custodial wallets on the other hand are a kind of wallets where the ownership of the private key rests solely on the owner alone. Here he/she has full responsibility over his funds or transactions.

In custodial wallets, you can also send and receive funds but you are not in full control. The third party or central authority has a certain authority over our wallet. I can make a transaction and as far as it is not allowed by the central authority the transaction won't go through. They are in custody of our private keys and thus perform our transactions on our behalf. In a decentralized non-custodial wallets, you own your private keys and it's your duty to keep them safe. Whenever you are making a transaction in a non-custodial wallet, you use your private key to complete transactions and you can make any decision bad or good and it would be carried out at your own expense.

2.) What do you think about the Proof of Keys Day? What precautions would you take when participating?

What I think about the proof of Keys day

A brief summary on the proof of Keys day and what it is all about. It was originally celebrated on the 3rd of January 2019 as the 10th anniversary of the bitcoin genesis block but in addition to that day, investors also celebrate what we call a proof of Keys day where we transfer our funds from centralized wallets to a well trusted decentralized wallet. Personally, I see this proof of Keys day as a good chance for investors to remember who is in charge of their private keys and to reduce their over dependence on centralized exchanges and make decisions for their own. it also enables us to fish out false exchanges. Some platforms don't have much funds and are surviving on the deposits of their users whilst claiming that they have more than enough so this bank run enables us to fish out these kinds of exchange because once we withdraw our funds from there they would be forced to shutdown if they can't keep up. As I said earlier, it also celebrates the first block of bitcoin that was mined in 2009.

Precautions to take when participating

✓ Always make sure to transfer it to tested and trusted decentralized wallets . There are alot of fishy apps and wallets that you might be tempted to use but always make sure to go for the most common and trusted ones.

✓ Avoid keeping your private key online as hackers will be on the move to secure as much as they can during the period. Having your keys offline is more trusted especially in a flash drive or hard drive.

✓ Always make sure to use the exact address for the token you are sending as some users assume some tokens share the same address and end up sharing the funds to the wrong place.

✓ Take note that there might be some network issues due to the amount of people performing transactions during that period so be sure not to panic if there is a delay in your transaction.

Do you prefer Centralized exchanges or Decentralized wallets for storing your cryptocurrencies? Why?

I prefer decentralized exchanges/wallets to centralized exchanges. The reason for this preference is due to the fact that decentralized exchanges offer user privacy and independence from external control coupled with the fact that I am in possession of my private keys and get to make decisions for myself. Centralized exchanges hold private keys for their users and exact an amount of authority on our accounts under their control. They can decide to freeze our accounts, restrict transfer of funds and are open to the risk of being attacked by hackers.

For example, as I was trying to perform some transactions pertaining this assignment, Binance (a centralized exchange) decided to terminate my verification and I didn't have any access to my funds so until I rectify the issue my funds are going to remain tied up whereas this won't be the case in a decentralized exchange/wallet. In as much as everything has its advantages and disadvantages and we have to weigh the merits and demerits of something before making our decision. I would proudly say that decentralized exchanges outweighs the centralized exchanges in terms of advantages.

Now preference differs from one person to another. I've come across alot of people who prefer centralized exchanges but for those who haven't had any experience if you have been following my assignments and tasks, I always mention the fact that most decentralized apps/exchanges don't really have user friendly interfaces so a newbie might find it hard to use at first so it's best to start with trusted centralized exchanges as they are easier to use and understand.

4.) Let us assume it is Proof of Keys Day: a.)Transfer at least 20 Steem from your Binance wallet to your Steemit wallet. b.) Transfer at least 50 TRX from your Binance wallet to your TronLink wallet.(Provide Screenshots and make sure you have your Keys).

Transferring Steem to my Steemit wallet

✓ Step 1: Open the binance app and click on wallets at the bottom right corner.

✓ Step 2: Search for steem and click on it.

✓ Step 3: Click on withdrawal. You will given spaces to fill about the transaction like the address, amount e.t.c.

✓ Step 4: Confirm the details and make sure they are correct and click on withdrawal and your request would be submitted.

✓ Step 5: Go to your Steemit Wallet to see if it has been recieved successfully.

Transferring Trx to Tronlink Pro

✓ Step 1: Open the binance app once more. Go to wallets and search for trx and click on it.

✓ Step 2: Click on withdrawal and fill in the necessary details like network, address, amount. Check for errors and fill these details carefully.

✓ Step 3: Click on withdrawal and click on the confirmation button in the next page.

✓ Step 4: Your withdrawal request will be submitted successfully as seen above.

✓ Step 5: Go to Tronlink Pro and check if the trx had been recieved successfully.
(All the screenshots used in this question were taken from binance and steemit and editted using canva)

5.) In one statement, what is the major significance of the transfers in question 4.

I believe this transfer signifies that I am in full control of my funds, the sole owner of my assets and can do whatever I want with them.

Conclusion

It is very important as traders/Investors to know how to effectively use our wallets, avoid fraud, keep our keys safely and from time to time try to make decisions by ourselves using decentralized wallets and also celebrating the proof of Keys day. I believe I have successfully completed this task and would be awaiting the professor's review. I would also love to end this assignment on a sad note as I would really miss prof. @awesononso after this season.