Trace Mayer, an early Bitcoin adopter and investor, has officially started an initiative called “Proof of Keys”. The initiative calls on all Bitcoin holders to take their holdings off of custodial wallets or exchanges and take full control of their money on the 10th anniversary of Bitcoin’s birth. We support this effort and look forward to making it a tradition with all crypto-assets.
In Bitcoin and other crypto-assets, the storing, receiving, and sending of funds rely on public and private key pairs. Public keys are used to derive addresses that act much like an email or a home address. You can’t receive an email without an email address, you can’t receive mail without a mailing address, and you can’t receive Bitcoin without a Bitcoin address.
Once someone has received assets on an address, the corresponding private key(s) give users the ability to spend the assets tied to that specific address. Anyone who has access to the private key(s) can spend the assets tied to that address. This means if someone or some organization is holding your private key(s) for you, they are ultimately in control and have possession of the assets.
Why is this important?
On a personal level, holding your own private keys severely reduces your reliance on third parties, a key innovation of Bitcoin. Throughout the history of crypto-assets there have been many exchange hacks resulting in substantial customer losses such as the infamous Mt. Gox hack. Whether these losses are a result of incompetence or malevolence is beside the point. Trusted third parties are security holes in all systems not just in crypto networks. Bitcoin and other crypto-assets dramatically reduce the user’s need to rely on trusted third parties. It’s very difficult if not impossible to avoid these organizations in a practical way and take control of your assets in our legacy systems. In contrast, with technologies like Bitcoin and others it is trivially easy to take control in a lot of different ways.
On a global level, the more users take control of their assets the less these networks rely on large institutions keeping these assets safe and staying honest. The more spread out the holdings of these assets the less vulnerable the economies around these assets are to institutional failure and manipulation. The more assets custodial institutions hold the more important their behavior is to the health of these systems. If they hold a trivial amount, failures and dishonesty, have a trivial impact on the health of these systems. When users take control of their assets, the peer to peer architecture of the technology is preserved. Keeping these technologies decentralized user based systems and away from a centralized institution to institution based system is of utmost importance.
If enough users pull money off of exchanges and hosted wallets a necessary and healthy stress-test will be forced upon trusted third parties all around the world. The Proof of Keys movement will challenge them to redeem withdrawal requests in a timely manner with the appropriate quantity of assets. Dishonest and/or incompetent custodians could be exposed during this exodus which would be a net benefit for the long term health of these networks. If no issues come of it, many trusted third parties will have proven their merit on a case by case basis. A win-win either way.
The Edge Wallet
Our wallet is a non-custodial wallet meaning we do not have access to our user’s private keys and the user has complete control. Every Edge user has exclusive access to their assets which preserves the decentralized peer to peer architecture of these networks and minimizes the trust our user’s need to have in us.
Our users don’t have to count on us being honest, competent, or keeping our servers running if they don’t trust us at all. They can always write down the master private seed(s) of their wallet(s) if they are inclined to do so. The master private seed acts as a backup and eliminates our user’s need to trust us. We don’t have access to funds and if users secure their backup, they don’t have to rely on us at all. Edge users can even connect their wallet to their own personal node if they want to. Not only do they have complete control of their assets, they can choose to run the software implementation of their choosing, and confirm their own transactions. Monetary sovereignty has never been this easy to achieve in the history of mankind.
If you’re interested in learning about our security architecture and how we operate in a non-custodial manner please check out our whitepaper.
Download Edge today and take control of your private keys!Download Edge for iOS Download Edge from the Play Store Android APK Direct Download