The old username-password way
In legacy internet or web2, almost everything we're used to require an account, a username and a password. When you use services like Gmail, Instagram, or PayPal, you rely on a username and password to access your account.
These platforms store your data, control your access, and can lock you out, lose your data, or get hacked. I know @jongolson got a bunch of his money taken away by PayPal a long time ago and I've personally experienced YouTube taking down one of my videos for including links to Bitcoin faucets.
The company, bank or government acts as a middleman, or gatekeeper, managing everything for you.
The same goes for crypto exchanges. If you're dipping your toe into web3 and buy cryptocurrency and have it on an exchange like Binance, they hold it and have the power to take it away for any reason or no reason at all.
There's a famous saying in web3 that goes like this:
Not your keys, not your crypto
But, what do you mean keys?
Web3's self-custody
In web3, you are in full control of your digital assets (your crypto, your NFTs, etc.) without relying on any middleman. Instead of a username and password stored on a company's server, you use a private key 🔑, a unique string of characters that only you have, to prove you are the rightful owner of your assets.
It's important to highlight that you have the only copy of your private key. There's no lost and found and there's nobody that can help you recover it.
A lot of blockchains use a seed phrase, which is is a list of 12 to 24 random words generated by the wallet that acts like a master password. It allows you to have complete access to your funds or restore your password to your crypto wallet if it's on an app, for example.
On the HIVE blockchain, the private key-public key pair is a fundamental part of its cryptographic security system, enabling users to securely manage their accounts, sign transactions, and prove ownership.
The Private key is a secret, randomly generated string of characters (essentially a long, unique password) that you must keep confidential. It’s like the key to your digital safe.
while the public key is derived mathematically from the private key and can be shared publicly. It’s like the address of your safe that others can use to send you assets or verify your actions.
The relationship between the two is one-way: the private key generates the public key, but you cannot reverse-engineer the private key from the public key (thanks to complex math involving elliptic curve cryptography).
I've written a detailed article on Hive keys here: Understanding HIVE keys.
One of my absolute strongest pieces of advice is keep at least two copies of your seed phrase/master password. Keep them in separate places and different media. One can be digital and the other physical.
I felt so smart having all my keys in cold storage in a fire proof safe, until it got corrupted 😣
Full story here: I lost my keys :( don't be like me
From now on, I'm going low-tech and keeping a copy of my private keys written on paper in a safe place, my plan though is to make something with a metal plate that is resistant to fire, water and stupidity:
image source: reddit.com/r/Trezor
All images in this post including the infographic have been created by me unless stated otherwise. Most images are created using Mid Journey and Canva Pro.
A copy of this blog post has been posted on my website, https://decentralizedcreative.com/