What is Not Your Keys, Not Your Coins?
“Not Your Keys, Not Your Coins” is a popular adage in the cryptocurrency community highlighting the fundamental importance of private key ownership. It reflects the principle that if you don’t possess the private keys to a wallet, you don’t truly control the cryptocurrency assets within it. Without ownership of the keys, access, and control of your digital funds are reliant on third-party services, which introduces security risks.
Private keys are cryptographic strings that grant access to cryptocurrency funds stored on the blockchain. If these keys are managed by centralized exchanges, custodial wallets, or other intermediaries, users are essentially trusting those entities to secure their funds. This trust can be misplaced in cases of hacking, insolvency, or mismanagement by the custodial service.
For instance, several cryptocurrency exchanges have suffered breaches, leading to the loss of user funds. In such cases, individuals without control over their private keys could not retrieve their assets. This has reinforced the mantra, urging users to consider non-custodial wallets where they control their private keys.
By maintaining direct ownership of private keys, users safeguard their funds against external risks, enhancing security and financial sovereignty. Hardware wallets and non-custodial software wallets are popular choices for achieving this control.
