In an interview with Forbes last week, Head of PR at ChangeNOW Mike Ermolaev discussed the topic of crypto security and wallet ownership. The article outlines the main points Mike touched on in the uncut interview.
Custodial Wallet Risks in a Nutshell
During the interview, Mike was asked why average investors should care about having a non-custodial wallet. He said he believes that most people use centralized exchanges because they resemble banks. Investing in gold, stocks, and cash can be complicated and expensive, so investors turn to banks or brokers to handle these tasks.
“Cryptocurrency is different – it doesn’t have to be kept in a vault. It’s more about who controls it. If you store your crypto on an exchange, it owns your private keys and thus your money. According to recent statistics, about $2.66 billion has been stolen from exchanges since 2012, with the most common attack method being the theft of private keys. In other words, crypto exchanges might not be the best choice for investors,” he said.
People sought a bank-like experience, so NOW Wallet was designed with a similar interface and features. Mike pointed out a major difference, however: you own all your assets since you control the private keys. “Not your keys, not your coins,” he echoed the popular phrase in the crypto community.
He advises that users should keep their coins in the wallet rather than on an exchange unless they are day traders. “If you store funds in NOW Wallet, they belong exclusively to you. Just keep your private keys safe, and you’ll never have to worry about anyone getting their hands on them. Theft isn’t the only way your funds can disappear from a crypto exchange. You may also lose access to your funds if the exchange is shut down, freezes your assets, halts withdrawals, or ceases to exist,” Mike said.
What’s Wrong with Exchanges Like Coinbase?
In explaining the pitfalls of CEXs, Mike said while Coinbase and other popular exchanges have no malicious intentions toward customers’ cryptocurrencies, accidents still happen no matter how much they promise to never go bankrupt. As an example, he brought up the recent case of Coinbase, where it added a clause in its terms of service stating that in the event of bankruptcy, its users’ funds would become its property. Having said that, he emphasized that NOW Wallet users will still be able to maintain ownership of their cryptocurrency regardless of what happens to ChangeNOW.
Mike said, “There is no point in comparing our products with those of well-known exchanges. Guys like Brian or CZ are advancing crypto adoption in a crucial way. From a user’s perspective, I think a crypto exchange is only necessary if you are a day trader. Our intuitive tool allows you to access the world of crypto opportunities without an intermediary. Risks abound in today’s world. Why add to them?”
Who Uses Non-Custodial Wallets?
When asked why people use non-custodial wallets like NOW Wallet, Mike replied that some purchase Bitcoin for medium-term gains; others diversify into cryptocurrencies out of inflation fears, and others get involved in DeFi, NFTs, and metaverse gaming experiences. Other categories of the wallet users are freelancers, p2p traders, and professionals who are actively involved in the field.
“As a whole, I’m proud to say that the NOW product ecosystem, including NOW Wallet, caters to every crypto-related need that may arise,” Mike Ermolaev said.
Passive Income Opportunities
“By connecting to any decentralized marketplace with NOW Wallet (available for iOS and Android), you can trade, lend, invest in insurance programs, or stake cryptocurrency to earn passive income. This is all done while respecting the fundamental principles of cryptocurrency: privacy and property ownership. NOW Wallet is a key that unlocks many doors,” Mike said.
Also, he distinguished between yield farming, where exchanges use users’ coins as liquidity to reward them in return for enabling others to trade and borrow cryptocurrencies, and staking, which gives users the option to stake coins for the opportunity to be selected as a blockchain validator and receive rewards, claiming that the latter is more stable and less risky.
What Makes ChangeNOW Unique?
“ChangeNOW aims to provide convenient and reliable financial and life management tools. It may sound too ambitious to some, or boring to others, but that’s what we do. Plus, we help people see how simple cryptocurrency is,” Mike Ermolaev said.
NOW Wallet supports more than 400 crypto assets, Mike said, and it also has many other useful features, such as the ability to exchange one crypto for another or buy crypto with fiat directly from the app, earn profits through staking, and connect to decentralized applications. It allows users to send, receive, and store all the tokens that exist on seven major blockchains – something no other crypto wallet can offer.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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