Re: Question about hacking and private keys - Coinbase as example
When you have bitcoins on a Coinbase or similar account, you dont actually hold bitcoins in a technical sense. Its like having a tech-savvy friend hold your bitcoins. Coinbase, or your friend, has the private keys to the bitcoins (actually to the UTXOs) you have deposited, and you trust them to eventually give you back your bitcoins by sending an equal amount of bitcoins (but probably not the same original UTXOs) to whichever address you specify.
Keeping your UTXOs in a wallet of your own is another thing entirely. You hold your own private keys and are responsible for keeping them secure.
Keeping your UTXOs in a wallet of your own is another thing entirely. You hold your own private keys and are responsible for keeping them secure.
Kind of... but I understood your explanation the best
I guess maybe since I dont actually use them for anything other than investing then none of this really applies to me is what youre saying? But if I buy things or do other things with them, then the keys are essential??I mean Im sitting here thinking, reading all of this research about how coinbase is almost virtually unhackable, because they store the keys in an underground vault thats inaccessible and has never touched or will touch the internet. But if what they are storing is not needed to cash...
OK so after reading everyones replies this is what I get out. At the point where I buy and keep them at Coinbase or send them to another Coinbase account the keys are never involved. But if I decide to send the coins to another exchange, then the actual keys are in fact sent at that point? So that means if somebody were to hack into my account and transfer the coins to their account, then at that point the keys ARE sent along with it?
So my understanding is not correct and my keyless concept ONLY applies to me keeping it all local on the Coinbase exchange, correct?
Then if that is all correct, the only question is why does Coinbase tell me I cannot get my keys? That cant be true then and thats what made me think the coins were not sent with the keys because they say theyre not available to me? But they are available to absolutely anyone else when they are sent?