Introducing The Daily 2, the all new video series by proclaimed crypto evangelist, Brian Wilson.
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In our latest video, we talk about the importance of Private Key management. In the same way you protect your phone, your wallet, your keys and your other valuable assets, looking after your private key is just as important. It’s not just a string of numbers, it’s the code that you need in order to secure your crypto assets and of course, access them in the future.
Check out what Brian has to say about the importance of private key management:
On today’s episode we will talk about one of the most important aspects of cryptocurrencies; private key management. It is essential to understand private key management, because if you don’t, you can lose all of your money! This is not to scare you from getting involved in cryptocurrency, but just to make you aware of the responsibilities involved. For today’s example, I will use Bitcoin, but this applies to any cryptocurrency utilizing blockchain technology.
For every Bitcoin wallet own, you have 1 public key and 1 private key. Your public key can be given to anyone and can even be posted up on a billboard for all the world to see. That’s because a public key can only receive Bitcoin.
To be able to spend or send your Bitcoin, you have to have the private key. This means that if someone else gets access to your private key, they can spend or send your bitcoin anywhere they want, and you lose access to it forever. This also means if you lose the private key, you lose access to your Bitcoin and your Bitcoin is lost forever. That’s why this is so important.
Let me be 100% clear on this point. If you do not own and control your private key, you do not own your Bitcoin.
If you decide to hold some of your wealth in Bitcoin, then the security of that wealth is now up to you. Unless you want to trust a 3rd party, like Coinbase, Binance, Bitfinex, Cex, or some other exchange that holds and controls your private keys for you. If that’s what you want to do, then that is your choice. Just be aware that those companies have control of your bitcoin, not you.
If the exchange you have your Bitcoin on shuts down, as they have in the past and likely will in the future, then you will not be able to send or spend that Bitcoin during the time they are shut down. and it’s possible it can be lost forever, because you didn’t have control of your private key.
I recommend only having small amounts that you plan to liquidate residing on exchanges and only near the time that you plan to liquidate them. Besides that, you should always have your Bitcoin in a wallet in which you control the private keys to. You need to make sure to have the private key safe and secured. Don’t trust anyone with your private keys unless you trust them holding that same value in cash for you, because it’s effectively the same thing.
I recommend using a hardware wallet, such as Trezor, or the Ledger Nano S to store your Bitcoin. In any case, wherever you store your Bitcoin (or any cryptocurrency) be sure you own, control and safeguard those private keys.
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Source: CryptoDaily.co.uk
Original Post: Welcome To The Daily 2 – Private Key Management Why’s It So Important?
