![]() ![]() A user has to remember or store the seed phrase for every wallet. It is used to sign transactions and to prove that you own the related public key.Īlmost every smart contract chain requires you to install their native wallets separately. It serves as the password of your account. Your private key is a string of 64 characters that can be generated from a 12-word seed phrase. Think of it as your email address, because when someone wants to send you cryptocurrency, they will send it to this address. Your public key is what identifies your account on the network. On creating a wallet you get a unique public/private key pair. These exchanges can also cease your assets under the direction of the authorities as in the traditional finance world.Ĭrypto wallets help users to take ownership of their cryptos back. The exchange can also be hacked and you can lose your funds forever. Theoretically, your account on centralised exchanges can be deleted in a blink of an eye. The convenience of using these exchanges comes at the cost of sacrificing censorship resistance, centralisation and lack of ownership. These exchanges also provide native wallet integration for almost all major chains. Today with fat marketing budgets and deep liquidy these exchanges are the go-to destination for anyone looking to buy, sell or hold cryptos. Unfortunately, the initial solutions to bring cryptocurrencies to the masses leaned towards centralisation and custodianship of assets in the hands of centralised exchanges like Coinbase and Binance. Self-ownership or self custody forms the centrepiece of the web3 world as without it censorship resistance can never be achieved. ![]() Under various circumstances, authorities can direct the custodians to cease your hard-earned assets. This freedom is unheard of in the traditional finance world. It gives absolute freedom in the hands of the private key owner. One of the pillars of the web3 world is self custody. Eventually, this vision of self-ownership has widened and is applied to almost all the assets which can be represented digitally. To give ownership of money back to the people from the hands of the government, Satoshi created Bitcoin.
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