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

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Am gladdened once again for yet another opportunity of this wonderful edition by the cryptoacademy. From the lecture offered by Professor @awesononso, reading through this lecture series have given me a better insight on proof of keys. To this, I will be writing based on the task given by the Professor.

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

Private Keys

Private keys are simply cryptographic keys which are used in opening custodial and non-custodial wallets. Here, the private keys are used by the legitimate owners and third party intermediaries of wallet to unlock and gain access to the cryptocurrencies in the wallets. It is a key that is kept private just as the name implies. In-terms of custodial wallets, the private keys are in the custody of the intermediaries or third party (might be a broker, a bank, etc.) who takes charge, controls and can access and as well take decision on what should be done with the coins in the wallet at any time without the knowledge of the legitimate owner of the wallet.

For instance, the banking system which we know is centralized, I open an account of which I have some amount of money inside, here, the bank now has the authority and control over my account to access my account as well using my money to trade or give out on loans to people who pays back with interest without my knowledge, remember, this interest payed only goes to the bank and not my account. This is exactly the relationship between private keys and custodial wallets.

In terms of the non-custodial wallets, the private keys are in the custody of the legitimate owner of the wallet, it is only the legitimate owner that takes charge, control and can access and as well take decision on what should be done with the coins in the wallet at any time.

For instance, in the steemit blockchain, we have wallets, these wallets are known as custodial wallet of which we have are tokens and coins stored. The rightful owner of an account only has the authority via his/her private keys to access his/her funds at any time. It is a system which is operated on a decentralized system. Here, there are no third parties or intermediaries involved.

Public Keys

Public keys are simply cryptographic keys used in locking coins in a wallet. These keys are open to the public and can be used to lock coins in either custodial or non-custodial wallets. When a coins is transferred to a wallet, this is the keys that translate the data and locks it in a wallet. It can be used by an intermediary or third party to lock coins in a custodial wallet or by legitimate owners of the wallet to lock coins in a non-custodial wallet. These keys cannot be used to unlock these coins from the wallet.

Take for instance, I own a wallet and a transaction is made to my wallet, this key will help me to store the coins into my wallet, but if I want withdraw or access with these key, I will not be able to except I use a private key.

From the above, we see that the public keys can only be used to lock funds into wallets while private can only be used to unlock funds from wallets.

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

Proof of Keys Day as an event which helps in sensitizing the public and new users on the importance of taking control of their wallet as well as the celebration of Bitcoin Genesis block which has led to the creation of decentralized wallets is a very nice event. It is a day that will let the public know the difference between owning and taking control of your funds and other people taking control of their funds and as such will help in the growth of the cryptocurrency world. Although we have people who are still ignorant of the decentralized wallet and its usage, this will be a good platform to letting them be aware of the importance of owning a decentralized wallet and also having control over the funds at any time of their disposal. It is quite a rewarding day to be valued.

To me, the precaution I will take when participating in the Proof of Keys Day is that I will be cautious enough not to miss or lose my decentralized wallet private keys because once it is lost, it cannot be recovered.

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

In my own opinion, I prefer the decentralized wallets to centralized exchanges with these reasons: in the decentralized wallets, the owner of the wallet only has the right to access his funds but in centralized exchanges, there is tendency of fraud since the wallet can be accessed by intermediaries or third party, thus funds can be used for other things without the owners knowledge. Not only about frauding of the wallet, but also since the intermediaries are the ones who have control over the private keys of the wallet, they can go to the length of hacking the account, that is changing the wallet details of the original owner of the account so as to be able to run away with their funds without trace since there is no transparency of transaction as compared to the decentralized wallets were every transaction details can be viewed by the public.

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).

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

The major significance of the transfer in question 4 is to remind me that I have a control over my funds in my decentralized wallet via the proof of keys.