Tezos Stack Exchange is a question and answer site for users, experts, and developers of the Tezos blockchain project. It only takes a minute to sign up.
Sign up to join this community
I'm new to Tezos. I don't understand this phrase:
The rub for investors is that generally speaking, validators running proof-of-stake nodes (known as “bakers” on Tezos) must have some funds online and so effectively “hot,” in crypto security parlance. That means these funds are more vulnerable to theft than when the private keys controlling them are kept offline, in so-called cold storage.
(from here)
How is it unsafe for me to delegate? I own my tokens.
If you delegate this is not an issue for you. You can delegate to a baking service and then put your keys in cold storage (offline). You still control the funds. This is one of the real nice things about LPOS 😉
The only thing that can happen is that the baker shuts down or misbehaves. In this case you would not lose your tokens, but you would not collect rewards either. So keep an eye on your baker 😉
Bakers however need to constantly sign blocks and endorsements, so they need to keep their keys on a server available for signing. There are many ways to make this more or less secure, but most serious bakers have a secure system in place with hardware wallets etc. Even if a baker get's hacked, none of your funds are at risk (only your future staking rewards).
