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Things you didn't know about your cryptocurrency wallet

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Things you didn't know about your cryptocurrency wallet

Not sure how much you know about your wallet? What percentage of your personal assets do you currently put in the electronic wallet? Are you afraid that your wallet will be transferred by hackers overnight?

This article organizes a self-response to someone in the FB discussion community who asked about cryptocurrency wallets. We can see it from the discussion thread that most people have a very fragmented understanding of cryptocurrency wallets. 

Some people will say that there are hot and cold wallets, some will say that the wallet must be safe, but the exchange wallet will be stolen, etc. 

The most likely situation for such scattered knowledge is that it's easy to materialize inconsistencies. 

Today, we want to explain to you what the bottom layer of cryptocurrency wallets is from the bottom-level structure, so that you can be a little "confident" when you talk to your relatives and friends next time. 👍

A world of 0s and 1s

Have you ever heard a saying that in the computer world, there are only 0 and 1.

Therefore, all private keys are finally composed of 0 and 1, a total of 256 digits of 0 and 1, it looks like this:

010001111011101000111000... (256 digits)

The magic thing is here, this private key is actually owned by everyone I can find it, it seems that the structure is very simple, because it is just a bunch of 0s and 1s (Deng de dang!) But why is your wallet safe?

Let's count the permutations and combinations. How many combinations of 0 and 1 are there in 256 digits? 

If you are awake in high school math class😊, you can calculate the answer of 2 to the 256th power. Convert it to the 77th power of 10, and give you a reference object. 

We can see that there are about 10 to the 80th power of atoms in the universe. In other words, the difficulty of guessing a private key is like finding a certain private key in the universe. 

Atoms collide... Even if one second calculates the computing power of an entire atom of the earth, it will take thousands of years (and good luck I think) to find a specific atom in the universe.

Playing 256 0s and 1s is spectacular.

Fun Fact, since the private key is a combination of 0 and 1, here is a very hardcore little brother who uses the method of flipping coins 256 times to make the private key 😮

Refrence Link: https://www.youtube.com/watch?v=ieHoQ4sGuEY

And this private key will not be disclosed. When the transaction is performed, the HASH encryption algorithm will be encrypted many times, and the digital signature will be performed. 

How safe is the HASH encryption of 256-bit 0 and 1 combination?

You can see 3Blue1Brown The excellent explanation gives you a general feeling that we need about "the entire universe, every galaxy, every planet is full of people, and everyone has the computing power equivalent to the current Google laboratory, counting 4 billion.

In 2018, there is a 1 in 4 billion chance that it can be calculated.”

OK, so the private key is just 256 zeros and ones, that's fine.

But I've never seen what my private key is 0 and 1?

Aha! I'm sure you haven't seen this string of numbers at all, because well-meaning wallets and exchanges know that you will go crazy when you see this string of numbers🤬, so they do two things. :

1. Hide the private key , the exchange wallet usually only shows you the address. Because of all your actions that require private keys, exchanges have servers on their backend that take care of that for you. 

If you really want to see your private key (what are you curious about...) you should contact the customer service to see if there is a way to export the private key (I haven't tried it). 

But they will deliver the private key that they have protected with the server to you through several hands, you really don't need to be curious... 

It is more likely that these export behaviors will endanger the stability of the system and will not do so.

However, it is more likely that your transaction does not go to the real blockchain, but only runs on the server of the exchange , because adding any data to the blockchain is not cheap, and the transaction fee is not cheap. 

If it doesn't work, the exchange only needs to make sure that its back-end database matches your transaction, and only the transfer out of the exchange will be on the chain. 

However, this is beyond the scope of this article. If you are interested, you can use your Ethereum address to use Etherscan to check whether your address has any on-chain records. For Bitcoin, you can use Blockchain Explorer.

Etherscan:https://etherscan.io/

Blockchain Explorer :https://www.blockchain.com/explorer )

The exchange wallet only has an address but no private key (there should be no one who secretly transfers USDT to me 😉)

2. Annotated words (if you are interested, you can google: BIP-39). If you have opened a wallet account (Metamask, Trustwallet, etc.), you will be given an English test when you register. You will be asked to write it down and take the test. If you fail the test, you will have to retake the test. When you resent him for bringing up your painful exam time, he is actually helping you memorize the key words thoroughly.

From Metamask Official Exam Instructions

Just now, in order to make a schematic diagram, I wanted to take a picture, but the app on the mobile phone actually prohibits the screenshot function. It's really... a thoughtful anti-cheating idea! 👍

How did the English words of the annotated words come from?

The 256-digit 0101 you will get when you create a wallet, it cuts you into 12 equal parts 10101000100, each string of 0101 can be replaced by a "dictionary" BIP-39 English Word List (2048words) an English word. This way you will get 12 English notation words. In fact, there is also a series of processes of importing random numbers and adding salt (yes, the salt of Salt) to increase security, which will be omitted here.

I just tested that MetaMask can export the private key. You can click Account Details > Export Private Key > Enter Password in Chrome's MetaMask, and you will see a string.

of 80ef2e68a3056814d76115... (Yes, this is my wallet, but there is no such thing in it Money 🤣)

This is actually 64, which is 01010100011000 in "hexadecimal".. If you are interested, you can use it to calculate your 256 digits of 0 and 1. This is what you can carry around and restore your wallet.

There is one thing to pay attention to here, just remember the mnemonic word, and input the same mnemonic word "may" can't be recovered if you change the device! ! In order to ensure security, some wallets "may" store a small amount of Salt in your device (mobile phone or computer) in addition to the notation words. If you are lucky, even if you uninstall the app, he will still leave a small file in a folder or something. As for where it exists, this... you may have to ask the wallet developer. But if your mobile phone is broken, it may really be a tragedy. If the amount is large enough, you may be able to ask an information security company to get it back... As for centralized exchanges, usually you have KYC, as long as you are still there , The exchange should be fine.

In addition, Bitcoin, Ethereum, or other currencies have slight differences in the use of encryption technology, so there is no way to mix them. However, cross-chain technology is also in progress.

Cold wallet

You will find that in the wallet above, the exchange wallet has the situation " Your wallet is not your wallet ". Wallet software runs the risk of forgetting the keywords, and any device that digitizes your password is at risk of being hacked.

So the "cold wallet" came into being. It is usually not connected to the Internet, and it usually requires a certain physical switch to start it. Its password is less likely to change hands and is more secure.

Sometimes there are more cool features. Suppose a company manages an encrypted asset. Of course, it is safe if the password (private key) is known only by one person, but when this person has an accident, it will be troublesome. If the two or more people knew, they could not clarify the facts when the secret was leaked. Some cold wallets can be designed to be opened again only after a certain number of authorized people, or some cold wallets (digital legacy) that can only be activated after a certain time. Or put the cold wallet into a traditional bank safe, etc.

The cold wallet from CoolbitX, I personally think it is the best looking one

But these are not the scope of my main research at present, so I will stop here for now. The most famous cold wallets in Taiwan are CoolBitX, Ledger, which is very large but has had a privacy crisis a while ago, and ImToken, whose hot wallet wants to expand the battlefield. You can go to find out.

Summary

When you see this, help yourself first and clap your hands for me. I hope everyone can use more snacks for the safety of their property. Every time I see scam news, I really shake my head.

Most people still use exchange wallets. Since there is a situation where your wallet is not your wallet (there is enough talk), we need to choose exchanges carefully.