Crypto Wallets 101: What you Need to Know
When you trade cryptocurrency, wallets are necessary.
They’re used to store your public keys, or your alphanumeric password/number used to spend/send your coins to another coin address.
These are 256-bit long numbers that are assigned randomly, as a private key with your wallet.
In short, they allow you to access, store, send, receive and track digital currency holdings whether it’s Bitcoin, Ethereum or much ICO tokens.
They work just like safety deposit boxes we use to store our most treasured possessions.
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There are many types of wallets, including the following:
A hot wallet for example is one that you install on your computer or mobile device. You are in control of the security of your coins using a hot wallet. Please note that since they are on a device connected to the Internet, they can be less secure.
Types of hot wallets include:
- Desktop wallets like those found at Exodus.io and Jaxx.io. A desktop wallet is one that is accessed from and lives on your personal computer.
- Mobile wallets can be stored on wallets on your phone. Sites such as Exodus.io and Coinomi.com are reputable programs to use.
- Online web wallets such as Coinpayments.com and Jaxx.io are reputable. In this case, a third party stores your coins on the cloud and can be secured with multi-signature wallets.
Some of the most respected ones to use include:
When choosing a wallet, make sure it allows you to control your private keys. It should also have features for backup and security, such as PIN codes. You also want to make sure the wallet you choose is compatible with different operating systems, too.
Types of cold wallets include:
A cold wallet can help maintain higher-levels of security to protect your coins by storing them offline. Offline storage keeps your coins and data out of the reach of potential hackers. This is arguably one of the safest ways to secure your assets with a cold storage device.
Some hardware wallets to be aware of include:
- Ledger Nano S
A word of caution, though.
None of us can afford to lose the keys to the safety box because we could lose ownership of our valuables if they wind up in the wrong hands.
So do not share any of your public keys, or any other crypto passwords with any one.
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