How secure are you in keeping your Crypto SaFu: Qredo
We’ve recently witnessed an increase in calls to remove your cryptocurrency from exchanges, such as the one below, with the assumption that everyone knows how to handle “self custodial wallet”.
But is that true, after all, “not your keys, not your coins” is a popular adage? Can rookies or an average person keep their crypto safe outside exchanges? you'll get your answer before you're done reading this article
Security is important. While that is obvious, the lack of security awareness among everyday people is painful to watch. Experts who believe everyone has the same deep understanding of security concerns and then develop or advocate complicated settings that are difficult to use and easy to screw up are equally painful to watch.
Before I go into detail about security, I’d like to define a few terms.
What is digital asset custody?
Digital asset custody refers to the safekeeping or protection of digital assets by a third party for a fee.
In this way, digital asset custody is comparable to traditional financial asset custody. However, because of the unique nature of digital assets, digital asset custody operates differently — and is much more important for avoiding losses.
What is the procedure for digital asset custody?
Digital assets, unlike traditional assets, are governed by a “private key” — a string of letters and numbers that functions as a password, granting access to manage and spend the assets.
The power afforded by holding the private keys necessitates that they remain private. They should never be shared with anyone else since they can be used to transfer funds out of the wallet in an irreversible manner.
Services for digital asset custody;
Exchanges and self-custody are two common options for digital asset custody.
A cryptocurrency exchange is a centralized platform where you may buy and sell digital currencies. Exchanges can be used to trade one cryptocurrency for another. You can also use an exchange to convert cryptocurrencies back into US dollars or other currencies, which you can keep as cash in your account (to trade back into crypto later) or withdraw to a conventional bank account.
This entails obtaining complete control of private keys — usually via a hardware wallet — and eliminating any dependency on a third party, unlike exchanges. Seed phrases are used by the majority of self-custody services, which is a “single point of failure”.
Now that you know the difference between exchanges and self-custody, you’ll agree that you don’t have complete control over your funds on exchanges since it is centralized, also regulators can enact laws that make it difficult to access your funds. However, the seed phrase can be difficult to secure, in most self-custody options.
However, Qredo’s decentralized Multi-Party Computation (dMPC) eliminates the need for third-party custodians (exchanges), allowing organizations and individuals to maintain complete ownership over their assets while still being secured by institutional-grade governance controls.
How Qredo’s dMPC works;
From the private key controlling the digital assets, Qredo’s MPC protocol generates multiple independent secrets which are then distributed between MPC Nodes on a fast-finality blockchain. Each MPC node is hosted in a tier 4 data center that has been security-hardened. These data centers are located in major financial capitals throughout the world, including London, Chicago, and Hong Kong. When an asset owner wants to sign a transaction or generate a public key to make a deposit, they coordinate with their appointed custodians via the Qredo network to confirm the asset ownership on the blockchain, creating a consensus that enables the asset owner to invoke the MPC Nodes to run the MPC protocol from their Qredo wallet.
This protocol then generates either a public address for depositing digital assets or a digital signature for the underlying blockchain to transfer or receive digital assets from that address.
The benefits of decentralized MPC;
Qredo makes digital assets instantly accessible without compromising security by replacing tedious private key management with dMPC. This allows users to fully utilize digital assets as programmable money and broadcast transactions without fear of loss.
Are you still removing your cryptocurrency from exchanges? Thankfully, a new asset management paradigm (Qredo) has evolved, allowing you to more easily hold and trade cryptocurrency while maintaining institutional-grade security, governance, and control.
Qredo is a radical new blockchain infrastructure that delivers interoperability, lightning-fast settlement, and decentralized custody.
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