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Is Proof of Ownership Possible for Cryptocurrency? | TransitNet

How can one prove ownership of an asset that is 100 percentage digital ?
This has been a challenge facing Bitcoin, early cryptocurrencies, and other digital assets created with the blockchain and other distributed daybook technologies. The ownership of such assets is immediately linked to the private key obtained by the owner .
In ordering to prove possession of Bitcoin or other cryptocurrencies, you need to prove that you know the private key. however, you would not want to reveal the secret key, as revealing even function of the secret key or an double of the private key could put your ownership at risk. By having the private key — or even partially of it and then using sophisticated software to attempt to guess the rest of it — hackers can steal your cryptocurrency .
therefore, it is not a well mind to share the private key immediately in order to prove ownership of your cryptocurrency assets. What other methods exist ?

Three Ways to Prove Ownership of Your Crypto Assets

  1. Transferring a Small Amount of Cryptocurrency

Some individuals and organizations prove possession by transferring a belittled sum of their cryptocurrency from a digital wallet to a third party that can serve as a neutral party to verify the crypto assets. however, this method could besides be prone to fraud, as there could be compromise in passage, or the little measure could be stolen rather than returned .

2. Generate a Statement from a Cryptocurrency Account
Generating a affirmation from your cryptocurrency score, exchange or wallet, ideally showing your name, the sum of your holdings, the valuation of your crypto assets in USD, the date ( s ) of purchase and other information, could besides be used to prove your ownership of crypto assets. You could besides provide a screenshot. This could be desirable if the early party is familiar with and trusts the security of the digital wallet used .

3. Sign a Message with Your Private Key 
The most reliable way to prove ownership of crypto currencies is to sign a assign message with your secret key. By doing so, you can prove ownership of your crypto assets without the want to reveal the key or having to engage in a transaction, tied a modest one ( as explained above ) .
The message can be vitamin a simple as, “ I own this savoir-faire, ” a display of the public address, and the planning of a valid touch, which basically proves ownership .

Bearer Assets and Proving Ownership

A bearer asset, instrument or security is one in which no ownership data is recorded and the asset is issued in forcible form to the person who purchases it. The holder of a carrier musical instrument is the owner and whoever is in possession of the text file or certificate authorizing ownership is the rightful owner.

Issuers of a carrier asset keep no phonograph record of possession. This means that that asset is traded without a conventional commemorate or system demonstrating possession. Ownership is transferred by plainly transferring the document or certificate from one person to another. far, there is no requirement for reporting the transfer .
american samoa strange as this sounds, bearer bonds were very much in use many years ago by investors and corporate officers who wished to retain anonymity. however, ascribable to the electric potential for abuse, tax evasion and fraud, it has not been legal to issue holder instruments in the U.S. capital markets since 1982. Securities nowadays must be registered, not carrier, and the issue firm must keep records of the security system ’ sulfur owner by police .
A discussion of carrier instruments or assets is applicable when evaluating the security of Bitcoin and other cryptocurrencies because cryptocurrency is a carrier asset : Whoever holds the private key is considered the owner. The blockchain enables self-custody of digital assets : the owner of crypto assets is dislodge to choose from diverse wallet solutions, and the regulative environment continues to shift. In some ways, every digital asset owner needs to become their own custodian, which can be frustrating when considering the security of those assets .
This can make it highly hard to demonstrate proof of possession should a secret key be stolen or lost. This security and custody return is possibly one of the biggest reasons why institutional players have been behind to accept cryptocurrency .

The Future of Crypto Ownership

At TransitNet, we ’ ve set out to create the first base offchain title register of phonograph record for digital wallets, in order to create an extra layer of security for cryptocurrency assets. We are building a comprehensive chopine to empower individuals and businesses with the option to create a record of title for their crypto assets .
concerned in being at the vanguard of the new crypto infrastructure ?
Request an exclusive registration for TransitNet ’ s claim register when it launches today !
Jake Wengroff writes about engineering and fiscal services. A early technology reporter for CBS Radio, Jake covers such topics as security system, mobility, e-commerce, and IoT .
Sources
Blockchain Innovation Group – Proving possession of cryptocurrencies

Bitcoin.com – How to Prove Ownership with a Bitcoin Cash Address and Digital Signature
Investready – Verifying Crypto Assets
Investopedia – Bearer Instrument

source : https://leowiki.com
Category : Economy

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