Topic: Why I prefer Decentralized wallet (Read 316 times)

If that's what you thought, then you misunderstood what I said.

Pretty much, I called it "decentralized" in a way that no one sole company/entity is in control of the software development. As for the others, you're probably over-analyzing my 3-sentence reply.

You phrase it as if in Bitcoin Core, users have no control over private keys and that this wallet is not open-source in the usual sense but is something more than a bitcoin wallet, sacred and mythical like a decentralized entity that exists outside comprehension and sway of human beings. No, Bitcoin Core is not "decentralized" because it is just a piece of code that behaves identically on any computer which runs it. It should behave identically and enforce the same for all rules because this is how consensus is being achieved. Decentralization is a distributed process by means of which people or software come to an agreed-upon truth. Truth doesn't need to be "real" truth; this truth is only applicable to a system where it is being found through the painful process of achieving consensus. Bitcoin Core, however, is decentralized in a different sense: the process of development distributes among thousands of participants, and there is no particular person or group who can dictate what to add or remove from the code.

Decentralization is the situation by which a process is driven by everyone who wants to get involved, and not just by a few entities. For example, bitcoin is a decentralized Internet currency, because decisions are made with users' consensus. On the other hand, Google Pay, for instance, is far more centralized, because the software is driven by Google exclusively, and hence, Google alone decides for the software's policy.

You don't call a software "decentralized", because pieces of code are neutral. What you do name centralized/decentralized is the software's network policy and implementation.

Example #1: Visa (the product or implementation of a payment processor service) is centralized, because there's only one server that makes decisions, and users are common clients.
Example #2: Bitcoin (the implementation of an Internet currency) is decentralized, because each node isn't told what to do by a head server, but instead, it makes its own decisions, forming a peer-to-peer network wherein each peer is autonomous.

Wallet software, such as Electrum, doesn't have such network policy, and it's therefore incorrect to name it "decentralized". However, websites such as Binance work similarly to example #1, and therefore, their wallet software's policy can be called "centralized".

Decentralized =/= private.

Decentralized means that no one entity has control over the network.

Not sure about Tornado Cash, but I don't think it's decentralized enough to be called "decentralized", because it's mostly still a single core team; like with most DeFi projects.

What about coins like Monero and Tornado Cash? Aren't this fully decentralised projects aka privacy? What categories did they belong to? Their wallets are very well secured and the only way to fuck up is you losing your keys, not all altcoins sucks and these have their very own wallets unlike using Metamask and Coinomi to store shitcoins .

Its hard to find in altcoins such fully decentralized even though their non custodial on output but the source is closed one.  So in short there will be such vulnerabilities and risk associated.

People playing on altcoins should be aware of that,  thats why its imperative to have such shitcoin wallets that worth to trust even its kinda risky.  For example metamask.

To be totally safe, convert that into btc and stored on proven decentralized wallet such as bitcoin core.

Look for open source wallet like Electrum, that's the most trusted of them all apart from Bitcoin core wallet, it is safer to find money for a hardware wallet if you have more altcoins than Bitcoin.

Those wallets that claim to be "decentralized" are mostly wallets of shitcoins scams anyway. I don't remember seeing decently-reputable wallets in the Bitcoin and Ethereum eco that claims to be "decentralized".

Hackers go after all way possible to steal funds, the latest hack on solana took place through Slope wallet that doesn't belong to any crypto exchange, with a single fatal mistake from the Slope team many funds got stolen, in the crypto space anything can happen, only hardware wallet limit the risk but still not 100% risk-free.

There are not many so called decentralized wallet around mate and even some lied about been truly decentralized if you don't mind can you please list a few decentralized wallets that you know of? I will like to check them out.

"centralized" - "decentralized" is not a good way to describe a wallet. Technically running your wallet is centralized, because only you have access to it. Your confusion came from the fact that you thought about exchanges as wallets, a place were people store Bitcoin. When you are analyzing them, think about these functions separately. Exchanges can be centralized or decentralized. Centralized exchanges can be used as custodial wallets, though they really shouldn't be.

Yea, storing cryptocurrency in a centralized exchange was never safe. It's not decentralized actually, but nonce wallets are safe. We can only trade on an exchange, not hold for a long time. Because we don't know when accidents will happen. Besides hacking drama, the centralized exchange would freeze your account as well. Nothing safe on the central exchange. But need to make sure your non-custodial wallet and seed phrase is secured.

Crypto wallets are still far from perfection, only hardware wallets are truly decentralised, all those hot wallets that claimed to be decentralized are lying, you will start seeing some centralised moves from them as time goes on.

No bruh, bitcoin doesn't offer you 'decentralized' wallet (though there is no such wallet) or any type of wallet that there is, bitcoin offers you decentralization in itself, and allows you to make the decision of which wallet you want to use, some bitcoin users make the right choice and use non-custodial and open-source wallets, but some make terrible choices by using custodial wallets.

But the servers themselves aren't central. There's a lot of servers running electrum and a few implementations of it. It WAS easy for one to be malicious but it's also because of the way electrum is structured, it'd be a lot harder for a client like bitcoinj to have nodes that could cause disruption/he dishonest as it connects to multiple at once (and often hops between them).

Being decentralized means being distributed or dispersed, your wallet is a piece of software, it doesn't mean because it can be used alone with its own configuration it is decentralized, just like my miner for which I can change the mining pool at any time or go solo mining is not decentralized either as it's one piece of equipment if it breaks this is it. Just like with bitcoin core, if your HDD crashes there goes your wallet, what you have might have left be a copy on a stick but you don't have redundancy in this case as bitcoin nodes do.

Wallets can be categorized into centralized and decentralized as well.
When you use bitcoin core, you are using a decentralized wallet, because you don't rely on any third party.
When you use a wallet like trustwallet, you are connected to their server and you need to receive data from them. Also, you can't make any transaction inside trustwallet, if they don't want to broadcast your transaction for any reason. This is why trustwallet is centralized wallet.

There is no centralized or decentralized wallet. I believe you implied about custodial wallets and non custodial wallets.

If you use centralized or decentralized, you mean about centralized exchanges and decentralized exchanges or services.

• Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained.
• Not your keys, not your coins
• Security checklist (there are points about wallets)
• Recommended wallets by Jameson Lopp

I also feel that you are confusing decentralization with being non-custodial.  
If you want a secure wallet, it should be non-custodial, decentralized and open-source.

As mentioned above, being non-custodial isn't enough.
For example, in trustwallet, you have full control over your keys. But since it's close-source, there is no way to know if you are the only one who has access to the keys and since it's centralized, you have to connect to their server. This can hurt your privacy.

Another example is mycelium.
In Mycelium, you have full control over your keys and since it's open source and its code has been reviewed by many people, you can be sure that you are the only one who has access to the keys. But there's still a problem with Mycelium. In mycelium, you have to connect to their server.

If you want your wallet to be non-custodial, decentralized and open-source, you can use bitcoin core or use electrum and run your own server.
If you want 100% security, you must create your non-custodial, decentralized and open-source wallet on a air-gapped device and your keys should never connect to the internet.

If we are talking about decentralised coins like bitcoin and using these centralised exchange then it's completely depletes the base purpose of them and we should avoid using them for many other things also.

We all are aware about they control the keys to our funds but over the top they also act as banking institutions restricting users from withdrawing their funds and also freezing your account as we have seen during many times for example the war cricis between Russia-Ukraine.So what type of security we are expecting from these CEX ? They ask for KYC norms and then are also selling our information on the dark web and to the government agencies keeping track on out financial activity also.They need profits and keep running so they will follow government orders only so yes this is what all the CEX are doing at this time.

They file for bankruptcy your funds got dissolved and you won't get anything back but notice that if your have stored your funds in hardware wallets or some non-custodial wallets then they might be safe.

Go through this threads for more information :

Recent events should make you withdraw all your coins to your own wallet: Part 2

Another signal why to avoid CEX...

Use of hardware wallets with backing up your seed phrases is recommended because your funds are your responsibility and storing them on these CEX is like giving away to them your hard earned money.