When using a centralized service, it may seem for users that they own the crypto assets that they see, but that is not exactly true. All those services that do not provide a seed when signing up, but rather grant access through a combination of email, password, and often KYC, are defined as “custodial” services. “Custodial” means that it is them who have the private keys of the wallets where the assets of all the users are kept, and therefore it is them who are in full control and have full responsibility over these assets.
Storing crypto on a centralized exchange brings with it some advantages, but it is not the safest way to store one’s holdings in the long term. Many have been in the past years the episodes regarding centralized exchanges which shut down, keeping the assets of their users. The most infamous case is the one of Mt.Gox, a formerly Japanese exchange that in 2014 stopped its services while losing control over more that 700.000 bitcoins.
“Not your keys, not your coins” is a slogan that highlights how, if one is not in control of its seed and therefore keys, he/she cannot state to be holding the cryptos held in that wallet.
On the other hand, the non-custodial services as Eidoo provide the users with the seed and therefore with the keys that grant access to the crypto stored in the corresponding wallet. This brings a higher degree of responsibility for the user, as Eidoo does not keep a copy of the seed (12-word passphrase) of its customers, and there is no server where this information is stored.
For this reason, it is critical that the user keeps the seed in a safe, offline location, as the only way to restore the wallet in case of any incident is through the 12-word sequence that was provided when the Eidoo app was first opened.
⚠️ BEWARE OF SCAMMERS⚠️
🚫 Eidoo team will never ask you your 12 words passphrase
🚫 If you share your seed with someone, it will result in a loss of your cryptocurrencies. Never share your 12 words with anyone!