Cryptocurrency wallets
Cryptocurrency has become a part of our modern life. The use of cryptocurrencies requires storing them somewhere, and it should be an accessible place, but reliably protected from unauthorized possession by another user and hacking.
Types of cryptocurrency wallets
You should keep in mind that owning crypto is different from owning traditional currency. Cryptocurrencies are not available in physical form and are rather seen as a group of codes. On the other hand, it is stored on a blockchain with a specific address. The owners can use:
- a public key to help other users send crypto assets;
- or a private key to unlock crypto assets in the wallet.
The public key is similar to your email address (as an example), you can give it to anyone. When your wallet is generated, the same thing happens with the public key, and you can share it with anyone to receive funds.
The private key is secret. It is similar to a password, it should not be cracked and you should not reveal it to anyone. If someone gains access to it, there is a high probability that your account will be compromised and you may lose all the cryptocurrency deposits in your account.
Types of cryptocurrency wallets:
- Hardware wallets allow you to store virtual funds in large quantities and are reliably protected by a private key, and are common cold wallets.
- Software wallets are hot wallets that store some funds protected by a private key.
- Cryptocurrency exchanges, which are convenient to use but are not an autonomous crypto asset.
These three types of wallets allow you to store several assets, such as bitcoin, ethereum, and others.
The best cryptocurrency wallets in Ukraine
Trezor is a hardware platform that allows you to store more than 1000 coins, there are no withdrawal fees.
Ledger is a hardware wallet that allows you to store more than 5000 coins, tokens, and other assets.
Blockchain is a custodial exchange, in which case the keys are stored on the exchange.
Electrum is one of the best platforms for storing bitcoins, with no withdrawal fees.
Online wallets vs cold wallets
Hot wallets are online wallets that can be used to transfer virtual money quickly. They are available online. Cold wallets are digital offline programs in which transactions are signed offline and then disclosed online. They are not stored in the cloud on the Internet, they are maintained offline to ensure high security. Examples of cold wallets include Trezor and Ledger.
When using hot wallets, private keys are stored in the cloud for quick transfer. With cold wallets, private keys are stored on separate hardware that is not connected to the internet or the cloud, or stored in a paper document. Hot wallets are easy to access 24/7 and can be accessed via desktop or mobile device, but there is a risk of irretrievable theft in the event of a hack. In the case of cold wallets, the transaction method helps to protect the wallet from unauthorized access.
Safe storage of funds on wallets
The safest way to store blockchain assets is in a hardware wallet, i.e. in physical form, or in a software wallet, i.e. in digital form. These options are preferable, as you will be a full-fledged autonomous owner. If you value the comfort and convenience of the interface, you can trust cryptocurrency exchanges.
Multi-cryptocurrency wallets
With the help of such wallets, you can follow the charts and prices of coins and tokens, and avoid market volatility in a timely manner. You can keep your coins under reliable protection, earn bitcoin or other currencies, and exchange and trade assets.
Reliability and ease of use
Just as a bank account cannot exist without a banking institution, cryptocurrencies cannot be stored without a wallet. In addition, it is very convenient to manage your assets, accumulate or exchange them, transfer them, or monitor the price. All this is available in a crypto wallet.
Backup and restore access to your wallet
It is very inconvenient to save your code on paper and then, in case of data loss, enter a long set of letters and numbers to restore the functionality of your wallet. It is best to always have a backup copy. To make it, you need to find the file, it can be found in the folder C: \ users \ PC name \ appdata \ roaming \ cryptocurrency. Then replace a copy of this document with a blank document, and use your wallet again.