Wallets
I realized today that perhaps you can better appreciate the Hive Wallet, if first you understand the cryptocurrency wallet. I think comparing it to an online bank account is a good way to explain a cryptocurrency wallet, using the familiar to explain the unfamiliar.
Typical Cryptocurrency wallet is like an online bank account.
Online Bank Account:
Account Number
You have an account number like 44588907 and this is the number you share with the public. People who want to send you money can send their funds to this account number.
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Account Password
You have an account password, which allows you to sign in and pay bills or send people money.
Ownership Verification
Your picture ID, ATM card, social security number or other items are required by the typical bank to validate your ownership of the account.
If you think the security of your account has been compromised you call customer service.
Then you
Typical Cryptocurrency Account:
Public Key or Public Address
You have a public key or public address. People who want to send you cryptocurrency can send their funds to your public key or this public address of your cryptocurrency wallet.
Private Key or security key
You have a private key, which is like a bank account password, which you use to move cryptocurrency from your wallet to the wallet of someone else. So you use it to send people money or pay bills.
Ownership Validation
Only your 12 word secret phrase is required to validate to the cryptocurrency blockchains that you own the funds in your wallet.
Security of typical cryptocurrency wallet.
Your private key is used to move your funds around, and your 12 word secret phrase or seed phrase validates ownership. If you loose the private key you loose access to the cryptocurrency funds. But if you lose the 12 word secret phrase someone can create a new wallet access point with new private key, then move your funds to your wallet, effectively stealing them.
This is why Hive wallet is so revolutionary, because you have an active key to move your funds around, which is the equivalent of your private key of a typical wallet, but if your funds are in the savings account it takes two days to withdrawal them, giving you two days to discover the loss of your active key and use your master password to reset your active key and cancel the withdrawal. Additionally it takes seven days to unstaked or power down hive you have staked or powered up as hive power, so you have seven days to discover the pending withdrawal and reset your active key with your master password and stop the withdrawal. You don’t have these protections with the typical cryptocurrency wallet.
The End.
