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!
Need a crypto wallet that gives you full control of your assets? You can download Exodus here.
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 digital assets, or tokens, that are created, stored, and transferred on a blockchain network, and they can have different functions.
Some blockchain assets like Bitcoin are intended to be used for payments, and other blockchain assets, such as tokens, can represent a digital asset or utility on a specific blockchain as outlined in a smart contract or by its project team.
Blockchain assets can also be unique and one-of-a-kind tokens. These tokens are referred to as non-fungible tokens or NFTs.
With traditional assets, most people only hold rights on paper but do not actually hold the asset. To transfer or sell traditional assets, holders have to contact a third party. Blockchain assets, however, are digital and are immediately transferable at any time to any person.
To learn more about blockchain assets, read our article What are the different types of cryptocurrencies?
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’s 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 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 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 secret recovery 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 enables full control of your assets, and Exodus doesn’t store your secret recovery phrase and private keys.
You are in total control of your funds with Exodus because you and you alone own your secret recovery phrase and private keys.
Even if Exodus were to get hacked, shut down, etc., your funds would be completely safe as long as you back up your wallet with the 12-word secret recovery. All you would have to do to regain access to your funds is import your secret recovery phrase into another multi-asset wallet.
Exodus is not affiliated with any third-party platforms, external links, or any other third-party resources mentioned in this article. As such, Exodus cannot guarantee the performance of third-party products or services, or that the steps shown and the information provided will always be accurate.