Our thoughts on the FTX debacle.
To our Ballet community:
First off, we are more than glad you have stuck with us and believe in our company’s values. Our mission has always been to make self-custody simple and safe. You being by our side while using the Ballet wallet is more than enough to inspire others to take back ownership of their keys.
The debacle surrounding the FTX saga is one that is surprising to everyone but at the same time, unsurprising to those who’ve been around the industry for awhile. We do feel for those users who were affected and still cannot withdraw their assets out of FTX. Hard to say when users will be made whole on this as many have placed a large portion of their savings onto the exchange.
As we have mentioned before in a tweet of ours, if you are having difficulties withdrawing your crypto either from FTX or from other exchange that isn’t being responsive to you, feel free to chat with us about it in our Discord channel here, and we’ll see how we can give some guidance.
But going back to what is happening with FTX and other centralized exchanges, it is without a doubt that the proverbial phrase of “not your keys, not your coins” still rings true to this day.
For most new users in the crypto space, using a traditional crypto exchange (CEX), is probably the most common gateway in getting first hand experience with crypto. Many CEXs today provide user friendly interfaces and regulated fiat-to-crypto on-off ramps to allow easy to purchase crypto options.
But as everyone has come to realize, when you want to access your own private keys pertaining to your crypto on a CEX, you actually end up not being able to find it. The reason is because you actually don’t own the private keys to your crypto. The CEX directly owns it in a custodial manner with a promise that you’ll be able to withdraw it from their platform when needed.
In most cases you only have access to a deposit address which allows you to deposit crypto from outside into your exchange account. And in some rare cases, you can access the public key. But every different crypto on the exchange is given its corresponding deposit address you can use.
At a high-level overview, CEXs hold the private keys to all of its users’ accounts. Your crypto and the exchange’s funds are all on their own wallets. Usually a large percentage of the funds are in their own managed cold wallets with the remainder held on hot wallets to cover daily withdrawal needs from users. So in essence, the CEX model is typical to that of a normal bank. They have direct control and access to your funds and will disperse it when you need to withdraw it.
So actual fiat purchases of crypto and transfering to other user accounts on the same CEX platform aren’t actual transactions on the blockchain. They are merely just recorded on the CEX’s own ledger accounting system so they know how much should be allocated to your account when you view your account details. It’s only until you withdraw crypto from their platform onto an outside self-custody wallet is when it’ll initiate an actual transaction on the blockchain. And that is also when you gain actual possession of your crypto.
The foundational principle of secure cryptocurrency storage is embodied in six words: Not your keys, not your coins. The tragic losses that unlucky investors and so many others have suffered by using a centralized exchange all could have been avoided if they had understood the meaning and importance of those words. But most newcomers to cryptocurrency are not taught the basic principles of crypto security. Of course, you wouldn’t expect custodial service companies to advise their users of the benefits of controlling their own private keys in a self-custodial wallet rather than entrusting their funds to the company.
There is a large selection of cryptocurrency wallets (devices that store your private key data) available, ranging from “hot wallet” software that can run on any computer/device to single-purpose electronic “cold wallet” hardware devices. Each of these wallets are designed to give users full and exclusive control of their private keys, as opposed to the third-party custodial model, where the danger of accounts being hacked seems to be an intractable problem.
For an easy, safe, reliable cold storage wallet that will give you true peace of mind, we recommend the Ballet REAL Series physical cryptocurrency wallet. Yes, we’re biased. But we stand by the recommendation. You won’t have to worry about SIM swaps, keyloggers, malware, social engineering, or any threats like that because Ballet wallets have no electronic components. Since there is no way to electronically connect to it, there is no way to electronically hack it. Just like cash or gold, you only need to take responsibility for physical security. Physical security has its own challenges, but it’s a lot more intuitive to most people than computer security. If you haven’t tried a Ballet wallet for yourself yet, you really should.
In recent years, the crypto asset market has been on a tremendous rise all over the world.
However, crypto holders are facing different ominous risks that can cause huge losses, or even total loss of funds at worse. Centralized custody services deprive people of the right to govern their own assets and to take true ownership of their private keys. The obscure all-to-often wallet solutions, which are extremely unfriendly to ordinary people, only increase the risk of misoperations. The fear is that we, as an industry, may converge back to the centralized models of traditional greedy banks that only care about profits. And the evidence is clear as to what can happen if you leave your keys on an exchange.
We at Ballet feel like this is the tipping point for crypto users to start taking responsibility for their own private keys. It’s time for us to siren a call of action to not only our users, but to all crypto users.
It is TIME to make a difference.
It is TIME to stay true to the ethos of crypto.
It is TIME to uphold the ideology of what Satoshi envisioned.
It is TIME to take back control of our own crypto.
It is TIME you walk the talk with the battle cry of “NOT YOUR KEYS, NOT YOUR COINS!”
It has always been Ballet’s vision and mission to provide people of all ages in your community with a self-custody wallet solution, which allows them to safely store and properly manage their assets on demand.
So we encourage you, with a Ballet wallet as your armor, to join us in the fight for widespread self-custody worldwide. Let’s not fall back into the trap of the broken fiat currency system which has enslaved us over the past century. This is our moment to avoid being toppled over by the whims of the central bank’s printing machine. We shall rise up and show the world that financial self-sovereignty is a basic natural human right we all deserve.
Join us, if you want to make a difference in this world.
Join us, if you see a bright future in this industry.
Join us, if you believe that financial self-sovereignty should be free and easy.
Join us, if you believe in once again, making crypto EASY.
Ballet is a U.S. company that provides simple and secure cryptocurrency storage solutions for the global mainstream market. Ballet is the team behind the world’s first multi-currency, non-electronic, physical crypto wallet. The company was founded in 2019 by Bobby Lee and an international team of cryptocurrency industry veterans. Ballet is headquartered in Las Vegas, Nevada in the United States, and has an office in Shanghai, China.
For more on our products please check us out at: https://www.ballet.com/
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