The word cryptocurrency has derived from two words that are crypto meaning a cryptic or secret message or data and currency which means an asset that has some kind of economic value. Moreover, an asset that can be exchanged for getting some kind of monetary benefit. The concept of cryptocurrency is not new but not so old too so people are still learning about this and as a result, only a few could make a better place in life. Without any doubt, cryptocurrencies are a quick and efficient source of making money because the returns are quite high as compared to the normal trading patterns and procedures. The next question arises of the safe keeping of the crypto assets or their custody. Only collecting something is not a problem but their custody surely is. In this article, we will discuss some of the options related to the safekeeping or custody of cryptocurrencies. If you are trading Bitcoins, you may also consider knowing about Bitcoin And Innovation In Business.
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Crypto Custody
To understand crypto custody let us suppose that one has some kind of asset in his name. When the bill remains in the position of somebody, in this case, it is you, then you will be considered to be its custodian or in short owner that has kept something safe. Similarly, if there arises a need of depositing the same in some other entity, say in the bank, then the latter party becomes its custodian. In short whosoever safe keeps an asset is considered to be its custodian. Thus, crypto custody means the ways by which crypto assets are stored and by whom.
In today’s time of digitization when there is smart connectivity available not only to normal people but to scammers and fraudsters as well, the need for proper custody is required and is a must. There is a dire need for various solutions and sources for keeping these assets safe in the form of custodian solutions.
Various forms of cryptocurrency custody solutions
The sole purpose of cryptocurrency custody solutions is that how can the crypto asset be safeguarded and kept safe. The prime method of keeping the safe keep of assets is by assigning the asset a private key that is used for conducting every transaction related to that asset and involves a high nature of programming involved. A private key is a combination of numbers and alphabets and thus is alphanumeric and difficult to crack or remember. The keys are unique and there is no chance of repetition. Though there are different options available too, it is still considered to be the best option. Some other options of crypto custody involve writing the same on a piece of paper completely away from the online environment but that is considered not so safe because anyone in easy reach can steal the critical information and can use it in an evil way. Moreover, if a simple loss of paper happens that will be a disaster for the person because there will be no means for retracting the information and thus a complete loss. Though there is a method by which keys can be extracted again that will be somewhat long and time-consuming. For an individual investor losing a key is not that much a disaster but for a company where employees are involved and a large mass of people is involved losing a key is surely a disaster.
Thus the keys should be stored properly whether online or offline and proper awareness of the safekeeping or custody should be spread. The person should be assigned a job and that person should be liable and trustworthy.
