This is one of the concepts im struggling with as well, I have been playing around with this exchange for a couple months now off and on and I still can't really say that i understand it.
So if the gateways hold your coins do they have access to those private keys? Also confusing is the difference between local wallet and cloud wallet....there are like 4 different kind of keys in your account...almost like steem...i dont even know which ones i need to backup.
I will say that the staking and bonuses they are offering are pretty juicy right now, staking BCO is very profitable i think
as i understand this, your coins are frozen in smart contracts and nobody can steal them. but if a governance or anything else would shut down the bridge your funds would be lost. idk about 4 keys sorry i was just using my old bitshares key in the unix application
So is there one key you can backup to have access to ALL the coins in your wallet? Or is just having the password to the cloud wallet enough?
I am also worried about future regulation attacking exchanges, after 4 years of crypto I am convinced that by FAR the biggest systemic risk to crypto is the exchanges and tether in regards to regulation...its sad but true that government and regulators kind of have the future of crypto in their hands....unless tech like this can become truly decentralized and government resistant.