tastycrypto Self-Custody Wallet FAQs
Self-custody crypto wallets offer users a way to store their own private keys.
This is in contrast to centralized, ‘custodial’ crypto exchanges. In these exchanges, the crypto of all customers is pooled together. Since customers can’t trace their digital assets on blockchains in custodial exchanges (as they can in a self-custody wallet), these customers can never be 100% certain that an exchange is holding their crypto 1×1.
This is what crypto enthusiasts are referring to when they say, ‘not your keys not your coins’.
Having custody over your private keys also allows you to interact with Web3 and DeFi (decentralized finance).
There are three primary types of self-custody wallets:
● Hardware wallets
● Paper wallets
● Software wallets
Hardware wallets store private keys on a piece of hardware, such as a USB drive.
Paper wallets are simply sheets of paper upon which a private key is written.
Software wallets store private keys on software. There are three types of software wallets: desktop wallets, mobile wallets, and browser extension wallets.
The tastycrypto wallet is a browser extension wallet. This type of crypto wallet is downloaded to and accessed from a Google Chrome web browser.
In the future, tastycrypto will be launching a mobile application crypto wallet. Stay tuned!
In crypto, a private key is similar to a bank password; whoever has access to the crypto private key, has access to the keys representative crypto on the blockchain.
Private keys are used to create public keys, which in turn create addresses that we can send crypto to and from.
Though the public key and private key are mathematically linked together, a private key can never be derived from a public key.
A public key is like a mailbox in that anyone can see the encrypted address and send mail (crypto) to it. However, only the owner of this mailbox has the (private) key to open the mailbox and receive the mail (crypto).
A private key is an extremely long string of numbers and letters that represents crypto ownership on a blockchain. Depending on how many digital assets you have, you could have dozens of private keys.
To make the process of accessing these keys easier, wallet intermediaries (like tastycrypto) use seed phrases.
Seed phrases are typically 12 randomly selected words that give you access to your crypto wallet and all of the private keys within it. If you have your seed phrase, you do not need your private keys. They are algorithmically linked together. A seed phrase, therefore, can be thought of as a ‘master key’.
When you open your tastycrypto wallet, you will be issued a seed phrase. Write this seed phrase down and store it in a secure place.
***If you lose your seed phrase, you will lose access to your wallet and all the crypto within it.
This is perhaps the downside of decentralization – no central authority has access to any of your wallet information, including your seed phrase/private keys.
Maintaining custody over your private keys (seed phrase) opens up a world of opportunities.
If you own crypto on a centralized exchange, such as Coinbase or Gemini, all you can do with your crypto is sit on it and hope it goes up in value.
In addition to providing a traceable safe haven for your crypto, self-custody wallets allow their user to access Web3. tasty customers may be interested in DeFi (decentralized finance) which is the fastest-growing segment of Web3. DeFi protocols are rebuilding our archaic financial system on public blockchains so anyone can participate.
There are DeFi protocols for everything. Here are a few of the more popular segments of DeFi.
● Crypto swapping protocols (Uniswap)
● Borrowing/lending protocols (Aave)
● Crypto staking protocols (Lido)
● Derivative protocols (Ribbon)
● Market-making protocols (Uniswap)
Initially, the tastycrypto wallet will launch on the Ethereum mainnet. We chose Ethereum because it is the most robust and liquid network for DeFi today.
We will be adding more networks in the near future, such as Polygon and Solana.
Whenever you transact on the Ethereum network, you must pay a gas fee. Gas fees go to the network, which in turn uses them to pay validators. Validators do the math on their computer required to add blocks (and the transactions within them) to the blockchain.
The current gas fee for a simple Ethereum transaction is about 50 cents.
After a transaction is validated, it usually takes less than a minute to be added to the blockchain. However, a few additional blocks must be added before a trade is confirmed.
The entire process for a transaction to settle usually takes under 5 minutes. You can learn more about gas fees here.
In addition to gas fees, you may be required to pay a protocol fee to transact on a network. For example, if you want to buy and sell crypto on the Uniswap exchange, their fee is currently 0.3% of the transaction total.
Part of this fee goes to pay the market maker. If you want to collect these fees instead of pay them, you can join a liquidity pool on a decentralized exchange (DEX) and become your own market maker!
The largest risk of self-custody wallets comes in the form of user negligence.
Business Insider reports that in 2022 more than half a billion dollars worth of Bitcoin alone will be lost due to users losing their seed phrase or improperly recording it.
When you open your tastycrypto wallet, a unique tastycrypto seed phrase will be presented to you.
Write this seed phrase down, and then double-check that you did indeed write all the proper words down in the right place.
***For security reasons, tastycrypto does not have access to your seed phrase. If you lose it, we will be unable to recover it for you.
In addition to losing your seed phrase, Web3 does introduce users to other risks. Some of these risks include:
● Protocol risk
Make sure you are transacting with reputable protocols that have had at least one audit done.
● Hacking risk
Hacking is a common occurrence in the crypto world. The first step to take in preventing a hack is to never reveal your seed phrase to anyone. tastycrypto will never ask you for this phrase. Additionally, it is wise to have a clean computer and web browser when interacting with decentralized protocols. You may have malware on your computer installed already without you even knowing it. Read more about securing your wallet in our tastycrypto Safety & Security Tips article.
● Token Risk
There are thousands of tokens out there. Make sure the tokens you’re interested in have adequate market cap before trading them. If not, you may have a hard time selling them. Additionally, tokens with low market capitalization tend to be extremely volatile. Coinmarketcap.com has a list of popular tokens and their current market cap.
● Internet Risk
When accessing your tastycrypto wallet, make sure you are using a trusted internet connection. Additionally, make sure you lock your device when it is not in use.
In short, blockchain is a digital ledger. What makes blockchain technology unique is that these ledgers are both immutable and decentralized. Once a transaction goes into a blockchain like Bitcoin or Ethereum, it can never be altered.
Like Bitcoin, Ethereum is a blockchain network. What makes Ethereum special is that its blockchain can store both transactions and code. Bitcoin, however, can only store transactions.
This code is stored in the form of ‘smart contracts’, which are essentially programs that self-execute when certain conditions are met.
Smart contracts are a big deal. They are the building blocks of all decentralized protocols. Without smart contracts, Web3 wouldn’t be possible.
Since the tastycrypto wallet will launch initially on the Ethereum mainnet, you will have to have some ether (ETH) in your account in order to interact with DeFi.
DeFi (decentralized finance) is the finance component of Web3.
In DeFi, decentralized applications are being built that mirror those of our current financial system. DeFi, however, is far more efficient than traditional finance and completely democratized.
Anyone can become a market maker in DeFi, just as anyone can lend/borrow crypto or stake their crypto to earn yield.
When it comes to getting crypto into your tastycrypto account, you have three options:
1.) Send crypto from a centralized exchange to your crypto wallet.
If you own already crypto on an exchange such as Coinbase, you can send that crypto to your tastycrypto wallet address. Make sure you are sending coins to the right network (don’t send bitcoin to your tastycrypto Ethereum address).
2.) Send crypto from a different self-custody crypto wallet into your tastycrypto wallet.
If you already have a self-custody wallet, you can send crypto from that wallet to your tastycrypto wallet using your tastycrypto ‘receive’ address for that specific network.
3.) Buy crypto directly through a payment service.
Currently, the tastycrypto wallet only supports NFTs that reside on the Ethereum blockchain (ERC-721 NFTs). We will be adding more networks in the future.
To move an ERC-721 NFT to your tastycrypto wallet, follow the below steps:
Open your tastycrypto wallet.
Select “Receive” and then choose “Ethereum”.
Copy the address that populates.
Open the wallet you are sending the NFT from.
Choose “Transfer”, or whatever option your wallet provider has to export an NFT.
Enter the tastycrypto Ethereum address you copied in the third step.
Confirm and send the transaction.
The NFT should appear in your tastycrypto wallet within 10 minutes.
*Make sure you are sending Ethereum NFTs to Ethereum addresses. If your NFT resides on a different blockchain (or you choose a non-Ethereum receiving address) your NFT may be lost forever.
**Whenever you send digital assets on the Ethereum blockchain, you must pay ‘gas fees’. Assure that your wallet has enough ether (ETH) in your wallet to validate the transaction.