Keeping your private keys safe and secure is essential to ensure financial independence. Unfortunately, many cryptocurrency investors trust their money to be left solely on exchanges. But this practice is far from being safe because the exchanges have full control over the cryptocurrency deposits.
Since the early days of Bitcoin, billions were lost due to exchange hacks and scams. The hack of the Mt. Gox exchange in 2014 is one of the most famous and controversial cases, and it’s still under investigation.
But what does all that have to do with the Proof of Keys day?
What is Proof of Keys?
The idea of Proof of Keys was created by Trace Mayer, a cryptocurrency investor and podcaster. He created the concept as an annual celebration that aims to incentivize cryptocurrency investors to reclaim their monetary autonomy.
As previously discussed, many people leave their cryptocurrencies stored on exchanges. This is inherently dangerous because these exchanges have full control over the private keys of their deposit addresses.
In this context, the Proof of Keys day aims to prevent investors' dependence on exchanges to conveniently store their cryptocurrencies. The concept is often presented with a short, but effective sentence: not your keys; not your Bitcoin.
The first Proof of Keys day took place on January 3rd, 2019 - which was the 10th anniversary of the genesis block being mined on the Bitcoin network.
Put in another way, the Proof of Keys day celebrates financial sovereignty. Its goal is to encourage cryptocurrency investors to move their funds from exchanges to their personal wallets. By taking full control over one's own private keys, they're ensuring no one but themselves can access their funds.
There are numerous types of cryptocurrency wallets. But, hardware wallets are often the preferred choice as they're arguably the most secure way to store private keys.
Four important outcomes of the Proof of Keys day
The philosophy behind Proof of Keys day lines up perfectly with that of Bitcoin. By replacing third-party intermediaries with a trustless value-transfer system, individuals can cooperate securely and confidently with one another - without giving up their monetary autonomy.
So, what are some of the important outcomes of the Proof of Keys day?
Teach new investors how to move coins around
Cryptocurrency investors should be comfortable moving cryptocurrencies from one place to another. While this may sound simple to some, newcomers often find it hard to understand the many types of wallets and how they are used.
As such, the Proof of Keys day encourages investors to learn more about the different types of crypto wallets and to practice their use. It's also a reminder of how the transfer of value is performed on decentralized blockchain networks.
Remind investors who really owns their private keys
As stated, the main mission set out by Trace Mayer when starting the Proof of Keys day was to encourage every cryptocurrency investor to own their private keys. Leaving their cryptocurrencies on an exchange means that investors have zero control over their funds.
Even though it only happens once a year, the Proof of Keys day is an opportunity for every investor to take control of their funds. While the day is a good reminder of who owns what, it means very little if investors don't follow through with securing what's theirs.
Expose shady or dishonest exchanges
Financial institutions are known for practicing what is known as fractional reserve banking. In essence, it's a way for institutions to leverage their existing deposits by lending out more money than they actually have. Unfortunately, this is risky for depositors since a "bank run" could lead to an institution going bankrupt.
Within the cryptocurrency space, the Proof of Keys day may encourage thousands of investors to withdraw their funds from the exchanges. If a great percentage of investors decide to do that on the same day, it can eventually expose the exchanges that practice fractional reserve methods or that lie about their true reserves.
Fortunately, though, the transparency of Bitcoin and other blockchain networks makes it easier for exchanges to make their holdings publicly verifiable.
Celebrate the Bitcoin genesis block
Last but not least, the Proof of Keys day is a way to celebrate the first block to be mined on the Bitcoin network. Such a block is known as the genesis block. The genesis block contains the first Bitcoin transaction to take place, through which Satoshi Nakamoto sent 50 BTC to Hal Finney.
Another memorable transaction took place on May 22nd, 2010, when two pizzas were bought for 10,000 bitcoins. The episode is now known as the Bitcoin Pizza day.
How to take part in the Proof of Keys movement
It doesn’t matter if you are new to cryptocurrencies or a veteran. Participating in the Proof of Keys day is very easy. As mentioned, the idea is to declare financial autonomy by withdrawing all funds from exchanges (or other third party services).
First, you can take an inventory of all the funds you have stored on cryptocurrency exchanges. This will give you an idea of who really owns what when it comes to your bitcoins and altcoins.
Next, choose a cryptocurrency wallet that you are comfortable using. Along with usability, it’s also important to consider the level of security of each wallet type before making your choice. The last step involves sending your funds to your personal wallet so that you own and control your private keys.
Some people participate in the Proof of Keys movement once a year. They move their funds away from the exchange for one day (on January 3rd) to celebrate and affirm their financial sovereignty.
Such a practice is common among active traders, who need to hold funds on exchanges in order to trade. So after the celebration, they usually move funds back to exchanges. However, long term investors (HODLers) that don’t engage in short or mid-term trading are better off holding their funds on a personal wallet.
The Proof of Keys day is a simple but important movement that reminds cryptocurrency investors who really owns their private keys. Millions of crypto enthusiasts take part in the celebration, moving funds away from exchanges to their personal wallets.
As the blockchain industry grows, events like the Proof of Keys day will not only help educate the community about the importance of private key ownership but also about general security principles.
Kuweka funguo zako za kibinafsi salama na salama ni muhimu ili kuhakikisha uhuru wa kifedha. Kwa bahati mbaya, wawekezaji wengi wa cryptocurrency wanaamini pesa zao zitaachwa tu kwenye kubadilishana. Lakini hii ni mbali na kuwa salama kwa sababu kubadilishana kuwa na udhibiti kamili juu ya amana cryptocurrency. Tangu siku za mwanzo za Bitcoin, mabilioni yalipotea kutokana na hacks za kubadilishana na udanganyifu. Uvunjaji wa Mlima. Gox Exchange ni moja ya maswala maarufu na ya utata ambayo bado ni chini ya uchunguzi. Lakini hayo yote yanahusianaje na siku ya Uthibitisho wa Funguo? Uthibitisho wa Funguo ni Nini? Proof of Key ni mkakati wa biashara wa cryptocurrency ulioanzishwa na Trace Mayer, mtaalamu wa cryptocurrency na mtangazaji wa podcast. "Mwanzilishi wa cryptocurrency, alianzisha dhana kama sherehe ya kila mwaka ambayo inakusudia kuhamasisha wawekezaji wa cryptocurrency kupata uhuru wao wa kifedha. """ Kama ilivyoelezwa hapo awali, watu wengi huacha sarafu zao za sarafu zilizohifadhiwa kwenye kubadilishana. Hii ni hatari kwa asili kwa sababu kubadilishana hizi kuwa na udhibiti kamili juu ya funguo binafsi ya anwani zao amana. Siku ya Uthibitisho wa Funguo ni siku ya kuzuia uwekezaji kutoka kwa kubadilishana kwa kuhifadhi sarafu zao. "Kama ilivyoelezwa hapo juu, ni muhimu sana kutumia maneno mafupi, lakini yenye ufanisi: ""Si funguo zako, sio Bitcoin yako.""" Siku ya kwanza ya uthibitisho wa funguo ilifanyika Januari 3, 2019, ambayo ilikuwa maadhimisho ya miaka kumi ya block ya genesis kuchimbwa kwenye mtandao wa Bitcoin. Kwa maneno mengine, siku ya Uthibitisho wa Funguo huadhimisha uhuru wa kifedha. Lengo lake ni kuhamasisha wawekezaji wa cryptocurrency kuhamisha fedha zao kutoka kwa kubadilishana kwa mkoba wao wa kibinafsi. Kwa kuchukua udhibiti kamili juu ya funguo za kibinafsi za mtu mwenyewe, wanahakikisha hakuna mtu ila wao wenyewe anayeweza kupata fedha zao. Kuna aina nyingi za mifuko ya cryptocurrency. Lakini, Hardware wallets ni mara nyingi chaguo preferred kama wao ni arguably njia salama zaidi ya kuhifadhi funguo binafsi. "Kama ilivyoelezwa hapo juu, ""Uhakiki wa Funguo"" ni wazo la msingi la siku ya ufunuo wa funguo, na ni sawa na Bitcoin." Kwa kuchukua nafasi ya waingiliaji wa tatu na mfumo wa uhamisho wa thamani usio na uaminifu, watu binafsi wanaweza kushirikiana kwa usalama na uaminifu na kila mmoja - bila kuacha uhuru wao wa kifedha. Kwa hiyo, ni nini baadhi ya matokeo muhimu ya siku ya Uthibitisho wa Funguo? Kujifunza jinsi ya kuhamisha sarafu za cryptocurrency kutoka mahali moja hadi nyingine Ingawa hii inaweza kuonekana rahisi kwa baadhi ya watu, mara nyingi wapya hupata vigumu kuelewa aina nyingi za mkoba na jinsi wanavyotumiwa. Siku ya Uthibitisho wa Funguo inawahimiza wawekezaji kujifunza zaidi juu ya aina tofauti za mifuko ya sarafu na kufanya mazoezi ya matumizi yao. Ni pia kukumbusha jinsi uhamisho wa thamani ni kufanyika juu ya decentralized mitandao blockchain. "Kama ilivyoelezwa, utume kuu uliowekwa na Trace Mayer wakati wa kuanza siku ya ""Uhakiki wa Funguo"" ulikuwa kuhamasisha kila mwekezaji wa cryptocurrency kuwa na funguo zao za kibinafsi." Kuondoa sarafu kwenye soko la hisa inamaanisha kuwa wawekezaji hawana udhibiti wowote juu ya fedha zao. Hata kama ni mara moja tu kwa mwaka, siku ya uthibitisho wa funguo ni fursa kwa kila mwekezaji kuchukua udhibiti wa fedha zao. "Wakati siku hiyo ni kumbukumbu nzuri ya nani anamiliki nini, inamaanisha kidogo sana ikiwa wawekezaji hawafuati kupitia na kupata kile kilicho chao. """ Kufunua kubadilishana shady au dishonest Taasisi za kifedha ni inayojulikana kwa mazoezi ya kile kinachojulikana kama benki sehemu ya akiba. Kwa kweli, ni njia ya taasisi kuongeza amana zao zilizopo kwa kukopesha pesa zaidi kuliko wanavyo. Kwa bahati mbaya, hii ni hatari kwa wawekezaji tangu "bank run" inaweza kusababisha taasisi kwenda kufilisika. Katika nafasi ya cryptocurrency, siku ya uthibitisho wa funguo inaweza kuhamasisha maelfu ya wawekezaji kuondoa fedha zao kutoka kwa kubadilishana. Ikiwa asilimia kubwa ya wawekezaji wanaamua kufanya hivyo siku moja, inaweza kufunua kubadilishana kwa njia za akiba ya sehemu au uongo kuhusu akiba zao halisi. Kwa bahati nzuri, ingawa, uwazi wa Bitcoin na mitandao mingine ya blockchain hufanya iwe rahisi kwa kubadilishana kufanya hifadhi zao ziwe na uthibitisho wa umma. Siku ya Uthibitisho wa Funguo ni njia ya kusherehekea block ya kwanza kuchimbwa kwenye mtandao wa Bitcoin. Kizuizi hicho huitwa kizuizi cha kuzaliwa. "Kifungu cha genesis kina ""Bitcoin ya kwanza"" ambayo Satoshi Nakamoto alimtumia Hal Finney." Mnamo Mei 22, 2010, biashara ya pizza ilifanyika kwa Bitcoin 10,000. Kipindi hicho sasa kinajulikana kama siku ya Bitcoin Pizza. Jinsi ya kushiriki katika harakati ya Uthibitisho wa Funguo Haijalishi kama wewe ni mpya kwa cryptocurrencies au mkongwe. Kushiriki katika siku ya Uthibitisho wa Funguo ni rahisi sana. Kama ilivyoelezwa, wazo ni kutangaza uhuru wa kifedha kwa kuondoa fedha zote kutoka kwa kubadilishana (au huduma nyingine za mtu wa tatu). Kwanza, unaweza kuchukua hesabu ya fedha zote ambazo umehifadhi kwenye kubadilishana kwa cryptocurrency. Hii itakupa wazo la nani anamiliki nini wakati wa Bitcoin na altcoins. Kuchukua hatua ya pili, kuchagua cryptocurrency mkoba kwamba wewe ni starehe kutumia. Pamoja na usability, ni muhimu pia kuzingatia ngazi ya usalama wa kila aina ya mkoba kabla ya kufanya uchaguzi wako. Hatua ya mwisho ni kupeleka fedha zako kwenye mkoba wako binafsi ili uwe na udhibiti wa funguo zako binafsi. Watu fulani hushiriki katika harakati ya Uthibitisho wa Funguo mara moja kwa mwaka. Wahamiaji hao wanachukua fedha zao kutoka kwenye soko la hisa kwa siku moja (Jana 3) ili kusherehekea na kuthibitisha uhuru wao wa kifedha. Mazoea kama hayo ni ya kawaida miongoni mwa wafanyabiashara hai, ambao wanahitaji kushikilia fedha kwenye kubadilishana ili biashara. Baada ya sherehe, fedha hizo huingizwa kwenye vituo vya kubadilishana. Hata hivyo, wawekezaji wa muda mrefu (HODLers) ambao hawajihusishi na biashara ya muda mfupi au wa kati ni bora kuweka fedha zao kwenye mkoba wa kibinafsi. Siku ya Uthibitisho wa Funguo ni harakati rahisi lakini muhimu ambayo inakumbusha wawekezaji wa cryptocurrency ni nani anayemiliki funguo zao za kibinafsi. Mamilioni ya mashabiki wa crypto wanashiriki katika sherehe hiyo, wakihamisha fedha kutoka kwa kubadilishana hadi kwenye mkoba wao wa kibinafsi. "Kama sekta ya blockchain kukua, matukio kama ""Proof of Keys"" siku si tu kusaidia kuelimisha jamii kuhusu umuhimu wa umiliki wa ufunguo binafsi, lakini pia kuhusu kanuni za usalama wa jumla."