What is a Decentralized Wallet? Why it is the Safest Crypto Storage Tool
A lot of friends of mine come to me recently raising their concerns regarding CEXes.
“Hey Wayne, I don’t know when will OKex reopen the withdraw function;
“I don’t know whether Binance will be legit anymore in the United States.”
“ There is a rumor about Huobi exiting scam. Is it Real?”
“To be honest, I am feeling less and less confident about CEXes, even with those big CEXes.”
“Is Decentralized Wallet a safe place to store my asset? ”
When being asked about the above questions, I have a standard version of the answer, which is :
“Yes it is safe. Don’t worry, with Decentralized wallet, only you have the private keys. ”
With the higher and higher frequency of answering similar questions in the past few days, I finally figured out a problem that most of the traders in the crypto words that are facing:
A lot of users might already notice the shortcoming of CEXes and the centralized systems. However, with regard to the security condition of the Decentralized wallet, they are not that sure about it.
So the purpose of this article is to tell the community about those ABCs of Decentralized wallet.
What is a decentralized wallet?
Talking about “wallet”, as revealed by its name, it is the tool to store our digital assets.
The “Storage” functionality is the fundamental function of a wallet.
The Keyword of a “decentralized wallet” lies in the phrase “decentralized”. A decentralized wallet is more like a front-end tool for the users. Users can realize different financial behaviors without sharing their private keys with wallet providers. In another word, they have absolute full control of their private keys, thus token security.
Take a look at a basic comparison of a Centralized wallet and a Decentralized wallet.
So if you are not sure about whether the wallet on your phone is centralized or decentralized, take a brief try:
Open up your wallet to see whether the wallet supports the “Reset Password” function. If it does not support reset, it’s a decentralized wallet.
Create a wallet in the app, try exporting the wallet to other existing decentralized wallets, like AToken. If it works, you are using a decentralized wallet.
Is it Safe to Use a Decentralized Wallet?
The answer is absolute “Yes!”
From my point of view, nothing is more straightforward than a solid “Yes”.
However, please allow me to take some time to compare the security characteristics of a centralized and decentralized wallet.
You can imagine “centralized wallet” as an account manager in the traditional banking system. After a few times interactions, you think you have already built up a trust-worthy relationship with him. You entrust him to manage your fund. However, one day when you wake up, your bank called you that he has been missing for 24 hours and with all the money you accredit him to keep missing alongside.
What a sad story!
Let us take a look at the decentralized wallet.
To make it simple，a decentralized wallet is a front-end display channel for your assets. Through it, you can visualize your assets and complete a series of financial operations. From your point of view, it is just a monitor and will not record your core user information.
All the assets you create are on the public chain. Only you have the private key s to touch those crypto tokens. As long as you have the private key, you can go to any decentralized wallet and manage the deposit and withdraw of your own assets.
The Multi-layer Encryption of AToken
Despite the natural security characteristics of a decentralized wallet, AToken also empowered its product with extra technology protection.
AToken guarantees the security of user assets through 3-layer protection.
Layer-1 is the private key protection. The product adopts a five-tier HD wallet structure. The private key is only stored locally on the phone and will not be uploaded to the network in any form. The private key is also encrypted and stored by the password (AES256). When a signature is required, only the password of the wallet can be entered to obtain the private key, and then the private key used in the transaction is constituted;
Layer-2 is the mnemonic protection, whose functions is similar to other mainstream wallet products on the market. AToken supports the quick import and backup of mnemonic phrases.
Layer-3 is transaction protection. AToken uses horizontal isolation and vertical defense architecture. When digital currency transactions are performed, the communication between the server and the App needs to be signed. Check, and all circulating information is transmitted through HTTPS TLS 1.2 to ensure that the transmission is not intercepted by eavesdropping. In addition, in order to ensure the stability of the transaction, AToken will perform a hot backup of the nodes to improve the high availability of the server.
Okay, that is the end of today’s article. A brief summary:
Use exchanges to trade and use AToken to store.
All in AToken.
Follow and Know More about AToken:
TG Group (EN): https://t.me/ATokenEnglishOfficial
TG Group (VN): https://t.me/ATokenVietnamOfficial
TG Group (IDN): https://t.me/atokenidnofficial