“Not your keys, not your crypto” is an adage derived from the Proof of Keys concept, which discourages the dependence on exchanges for the storage of one’s crypto assets and promotes self-storage instead.
Securing your private keys is critical to ensuring your financial freedom. Unfortunately, most people outsource this responsibility to exchanges, believing that their money is in good hands. But numerous security breaches in the past few years have proven without a doubt that this couldn’t be further from the truth.
The Dangers of Not Keeping Your Own Keys
When Mt. Gox, the first crypto exchange, was hacked in June 2011, around 850,000 BTC (worth roughly $450 million then) was stolen from its users. This event nearly crippled the crypto industry since the exchange held most of the Bitcoin available at that time.
Several years later, crypto platforms have advanced their cybersecurity mechanisms to great lengths. Unfortunately, hackers are still able to keep up. In fact, their numbers have grown significantly as the popularity and market value of cryptocurrencies exploded.
Furthermore, cyber theft is not limited to these so-called ‘centralized exchanges’. There have been many cases of stolen funds in decentralized exchanges and DeFi platforms such as Bancor, dForce, and bZx.
Bancor, a decentralized trading platform, was also heavily criticized for having the option to freeze its user funds in response to losing $13.5 million in a security breach. The fact that a trading platform that calls itself “decentralized” has the ability to prevent withdrawals is another major reason to secure your funds yourself.
How Proof of Keys Started
Proof of Keys was an idea conceived by cryptocurrency investor and podcaster Tracey Mayer. He initiated a movement that calls for an annual celebration that aims to encourage cryptocurrency investors to withdraw their crypto funds from exchanges and secure them in their own wallets.
Crypto exchanges are on the radar screen of the world’s greatest cybercriminals, and hence, pose a high risk to user funds. As a matter of fact, there have been 12 major security breaches and $292 million worth of user funds stolen in 2019 alone.
The Proof of Keys movement celebrates our financial sovereignty by letting us keep the keys to our wallets ourselves. That way, we could ensure that no one but us can access our funds.
Securing Your Funds The Right Way
Crypto exchanges may be convenient, but keeping your coins in your own wallet means you have full control over them.
We recommend you invest in a great hardware crypto wallet like Ledger or Trezor as it provides maximum security and has the most user-friendly interface.
A hardware wallet is a device that stores your crypto assets, generates your private keys, and keeps them completely offline. This holds true even when sending and receiving payments. Even if your device is connected to a malware-infested computer, it won’t compromise the hardware wallet’s security since it’s microprocessor is securely isolated.
Others might argue that an air-gapped (attack surface minimized) computer provides the same security as a hardware wallet. While that may be true, hardware wallets are more convenient since they are vastly more user-friendly and portable.
If you intend to buy a hardware wallet to secure your hard-earned assets, we highly recommend you stick to the leading brands: Ledger and Trezor. You can easily buy cryptocurrencies in Changeangel.io and send them to your own hardware wallet in a few simple steps.