Replying to Avatar Harley

I’ve got a question for you guys and it might be incredibly dumb but anyway. nostr:npub1e85mms9s8ssm6vm6ztw0tdrr6j0a4l5gf2sjhw2scxpwnexmaxuqcev9em 2500

Obviously self custodial wallets are better than custodial because you have your own keys but surely if you rely on someone else’s node then you haven’t actually gotten rid of much trust compared to trusting them with your private key. My thinking is that if you trust their software to display the right number according to the Bitcoin blockchain then how easy is it for them to redirect a transaction meant for you to themselves and just display the number you were supposed to receive in your wallet.

Am I being retarded? +500 sats for good answers.

#asknostr

Great question and some decent answers.

But to answer your question directly:

The trust you put is within the wallet, not the node in your example.

When you create a transaction from a UTXO in one of your addresses (address A) to someone else's address (B), this transaction still needs to be signed before it is valid. The signing of this transaction uses your private key to sign for the specific addresses and amounts.

If anything changes with this transaction, like a different amount, send or receive address, the signature would also look different. And the previous signature does not work, since it is specific on those details.

So the only way to swap around receiver or amounts send, is by knowing your private key. Which is held in your software/hardware wallet.

That's why a trustable/verifiable/reputable wallet is so much more important than your own node, to secure your Bitcoin.

💡 Extra: so why is your own node important?

Freedom. A node is used to relay information, like your signed transaction or the UTXO's you have on your addresses. Running your own node ensures privacy, otherwise you let a service know how much you own. They can censor transactions by not relaying your signed transactions (so they will never be seen by the rest of the network). And they could show you false balances, for whatever reason.

However, running a node ensures the network to stay decentralised, ensures your freedom and your privacy.

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