When you first buy crypto, it is very comforting to keep periodically checking if your coins are in your wallet. However, crypto wallets do not hold crypto. Cryptos are held on a blockchain, while wallets are just linked to private keys. Private keys in crypto, in other words, are proof of ownership, so only non-custodial wallets grant you this ownership.
Strictly speaking, crypto wallets simply read transactions and display the total balance of an account. This is possible thanks to the public nature of the account statements in the crypto blockchain which, despite its nature, maintains users’ anonymity.
Read on to grasp how this works.
Cryptocurrency public ledgers allow anyone to verify the existence of the money and the public address that owns it.
The ownership of the tokens is established via public and private keys’ encryption, created with a crypto wallet.
Your wallet is able to make operations with the funds related to your keys and recorded in the blockchain. In that sense, your funds «are» in the blockchain, not the wallet.
That is ultimately why keys (safe keys, mind you) are so important.
Your crypto wallet relies on two types of key—public and private. The private key should only be known to the owner and it is used to sign transactions where each transaction creates a unique string of characters. Public keys, on the other hand, are used to verify the transaction without disclosing the private key address.
The public key is linked to all the transactions you make with your wallet. Without getting too much into details, a public key is derived from the private key you create with your wallet—through a mathematical operation. Public keys identify publicly, in the blockchain, the owner in a transaction. A public key address, in other words, allows anyone to verify the validity of the signature whilst keeping the private key address that generated the signature untraceable.
Not only do non-custodial wallets give users full control over the private keys, but they also protect user identity and secure transactions—and it is the Pillar wallet that seamlessly achieves this.
You may be familiar with the 12-word private keys (seed phrases) that are usually provided to wallet users. In fact, the real private key is much uglier than that.
Binary!! The end is nigh!!
Luckily enough, more sophisticated encoding methods have transformed private keys into readable 12-word keys that should not be shared with anyone that is not supposed to have access to your funds.
But beyond the protection of private keys, Pillar has added other features that make your wallet even more secure and efficient. The design of Pillar wallet as a smart contract wallet ensures maximum protection for your cryptos.
This type of wallet uses two addresses. An external one for users to interact with and an associated smart contract address used to interact with the funds. When users execute an operation requiring the private key with the wallet, the application communicates with the smart contract so that the funds are never at risk.
Pillar wallet protects your private keys and crypto with state-of-the-art security parameters and transparency whilst keeping your identity unrevealed—all you need to do is to save your list of words and rejoice from having full control over your crypto.
So, what are you waiting to get your Pillar wallet?