What is a blockchain asset?
Want to know more about your cryptocurrency? What is it and where is it stored? What happens to my crypto if something happens to Exodus?
Please read this article to find out the answers to all of these questions!
In this article:
- What is a blockchain asset?
- Where are blockchain assets stored?
- How does Exodus give me access to my cryptocurrency?
- What if Exodus the company gets hacked, shut down, etc.?
What is a blockchain asset?
Blockchain assets are a type of digital asset or cryptocurrency. Some represent stakes in a particular project or company. Others are intended to be currencies, like Bitcoin, and do not represent a stake in a particular organization.
With traditional assets, like Apple stock, most people only hold rights on paper, but do not actually hold the asset. In order to transfer or sell this asset, it has to be done for you by a third party. Blockchain assets, however, are digital, owned solely by you, and are immediately transferable at any time to any person. The Exodus wallet contains your keys to your assets safely offline, encrypted on your computer's hard drive.
This means that we at Exodus don't have access to the details of your portfolio and can't lose or misappropriate them. If our company suddenly dissolved for some reason, all Exodus wallets would continue to work on the computers they're installed on. Even if something caused the wallets to fail to work properly, your private keys would still be accessible to you, so you could easily reclaim your assets with a different wallet service.
To learn more about blockchain assets, read our article What are the different types of cryptocurrency?
Where are blockchain assets stored?
Want to know where your crypto funds are stored? They’re actually not stored in your wallet but on the blockchain. Wait, what? We know! It's true! Wallets like Exodus do not store any user funds. To understand how this works, let’s briefly go over the concept of the blockchain.
The first use of blockchain technology is Bitcoin, which started in 2009.
The Bitcoin blockchain, and other blockchains, such as those of Ethereum and Litecoin, can be thought of as public record books of cryptocurrency transactions. These record books are stored on multiple computers around the world, which is why people say that this technology is “decentralized”.
Instead of storing Bitcoin, Ethereum, or other assets in a bank account, the blockchain for each asset keeps records of who has how many coins and in which address(es). To access the assets in any given address, you need the address’ private key.
Anyone who has access to an address’ private key has the power to spend the assets in that address. Therefore, if you are the only one with an address-specific private key, you and you alone control the funds within the address, and not a bank, nor company (not even Exodus), government, or other entity/individual.
How does Exodus give me access to my cryptocurrency?
Exodus is a piece of software that manages your private keys and enables you to access your blockchain assets like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP (XRP), and many more.
While a private key is literally the “key” to accessing your blockchain assets, a private key alone won’t do anything if you have no way to connect to the blockchain.
This is where wallets like Exodus come in. Exodus gives you a safe, easy-to-use, and dare we say beautifully-designed(!) way to interface with the blockchain in order to send and receive funds.
An analogy here would be your online banking username and password as well as your bank’s website or app. With just the username and password (private key), you can’t do anything. You need a way to connect with your bank—website or app (wallet like Exodus)—in order to access your funds.
Moreover, Exodus allows you to manage multiple assets at once using what’s called a 12-word secret recovery phrase, which acts as a “master” private key for all of your assets. So instead of having to keep track of private keys for a bunch of different assets, you can use your 12-word phrase to secure and manage all the different assets that Exodus supports.
While there are other solutions you could use like centralized exchanges that hold onto your private keys (and thus, funds) for you, Exodus believes in sticking to the spirit of cryptocurrency, by giving you control of your assets.
What if Exodus the company gets hacked, shut down, etc. ?
Exodus the company enables full control of your assets and doesn’t store your private keys, 12-word phrase, transaction logs, or any other personal information anywhere. All your private data is stored locally on your computer—for your eyes only.
Even if Exodus the company were to get hacked, shut down, etc., your funds would be completely safe as long as you backup your wallet. All you would have to do to regain access to your funds is import your 12-word secret recovery phrase into another multi-asset wallet, such as Jaxx or something similar.
You are in total control of your funds with Exodus because you and you alone own your private keys.