A cryptocurrency wallet or a Crypto wallet, as the name suggests, means a digital wallet that can send, receive or store crypto assets and other Crypto. There are a large number of free crypto applications available, serving every kind of crypto expert. The Crypto wallet or crypto wallets available are mobile wallets, desktop wallets, paper wallets, web wallets, hardware wallets, and many more.
The theory of a crypto wallet is to safely and securely handle and store your Crypto or other cryptos by a combination of private and public cryptographic keys. When retrieving online banking, your Crypto wallet login may also need your phone number and two-factor authentication for more security and safety
However, the private cryptographic key is the most important security feature of your crypto wallet, it is so secret that there are no ways to retrieve this information if you lose access to it. This means that you lost your Crypto forever and there is no way to get access to it again.
How to store Crypto Assets?
Cryptocurrencies can be stored in a number of ways, based on the security you need, how frequent you need to access them, and the general wallet functions you need.
If you are new to cryptocurrency, you may look into a fresher wallet that is very easy to use and uncomplicated to sign up for. It is also feasible to store your Crypto in the exchange wallet from the exchange you bought your Crypto from. Though it’s easy, it is not recommended for safety and security reasons.
What are different types of Crypto Wallets?
According to usage crypto wallets may be classified as software, hardware and paper. They are also further categorized as either ‘hot’ or ‘cold’ forms of storage.
A hot wallet is connected to the internet, whereas a cold wallet is fully offline. Software wallets may include web wallets, desktop wallets and mobile wallets.
What are Web Wallets?
A web wallet permits users to connect with the Crypto blockchain through a web browser interface and hosts their private keys and other ‘capabilities’ on an online server.
That is why a web wallet is also a hot wallet. Numerous web wallets are organized by a third party, like a cryptocurrency exchange, which allows users to store and flawlessly trade their cryptocurrency in a single interface.
Setting up an account on cryptocurrency exchange will automatically produce a user a Crypto wallet and in some cases, a series of supplementary wallets for each of the cryptocurrencies that can be traded on the exchange. The advantages of an exchange-hosted wallet are its benefits, ease of use and integration, and trading functionality on the exchange.
Setting up an account is like any account for an online service, yet users will need to complete Know Your Customers(KYC) checks by uploading a form of official identification. Though, hosted web wallets mean a users’ wallet keys are organized by a third party, leaving them at a risk of cyberattacks such as exchange hacks or scams.
What is a Multisig Wallet?
Multisig is a short form of multi-signature and means a type of digital signature technology that permits for two or more users to digitally sign a transaction.
An ordinary Crypto wallet uses single key technology, which means one corresponding private key is required to access the funds. A multisig wallet is composed so as to need more than one faithful party in order to validate transactions.
Multisig reduces any point of failure related to a single key. Multisig can also help businesses to manage their organization wallets or be used for bond transactions.
What is Desktop wallet?
A desktop wallet is a wallet that depends on the software that a user downloads and operates on their computer. Desktop wallet provides a user full control on their keys, which are stored in the computer as a wallet.dat file. For security reasons, a user is advised to password protect access to this file and to ensure that the desktop is free from malware or viruses before setting up a desktop wallet. It is essential to backup the wallet.dat file which will be needed to gain your funds in case you have trouble with your desktop in future.
What is a Mobile wallet?
As the name suggests, mobile wallets are controlled using a smartphone application and can be easily configured to assist daily Crypto transactions using QR codes. Mobile wallets are the app version of an exchange account and hence are connected to the same wallet, user login and account. In mobile wallets, users need to be very cautious about the risk of malicious apps and to take care to backup their private keys if they use a mobile wallet that permits them to control their own keys.
What is a Hardware wallet?
A hardware wallet is a physical electronic device that makes use of a random number generator to generate wallet’s public and private keys. This wallet allows a user to set up a security pin code to protect access to the device.
Users looking for secure and safe storage of their cryptocurrency for a long run often use a hardware wallet, which is “cold” as it is not connected to the internet and in this way its a safe alternative to users.
However, hardware wallets are somewhat hard to use than their software counterparts. They are considered as the most safe way to store and save cryptocurrency holdings, as they are resistant to cyber attacks.
What is a Paper wallet?
A paper wallet is an additional form of cold storage and is a piece of paper on which a bitcoin wallet is addressed and its private keys are printed as QR codes.
Though these wallets are secured against risk related to the hot wallets. As these wallets are physically flimsy, readers can make use of their thinking here. In this wallet, a user can not transfer his entire balance at once. To spend only a part of this wallet’s holdings, a user needs to transfer the entire balance to any other wallet and then spend some balance from here.
(This blog is exclusively for educational purposes, and we do not recommend buying and selling of any sort of currency)