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<strong>Know</strong> <strong>The</strong> <strong>Right</strong> <strong>Way</strong> <strong>To</strong> <strong>Store</strong> <strong>Your</strong><br />
<strong>Crypto</strong>!<br />
https://coinscapture.com/blog/know-the-right-way-to-store-your-crypto<br />
Before you start cryptocurrency trading on an exchange or purchase it from a broker<br />
it is necessary to know about digital wallets for storing cryptos securely. <strong>The</strong> most<br />
common issue faced is discovering the right digital wallet. This article will serve as<br />
a quick guide for selection.<br />
What is a cryptocurrency wallet?<br />
A cryptocurrency wallet is a place where the encrypted passwords (private and<br />
public keys) of the coins are stored. In simpler terms, it is a secure digital wallet used<br />
to store, send and receive digital currency. And it works exactly the same way as<br />
your physical wallet works. <strong>The</strong> only difference is the cryptocurrency wallets are<br />
entirely digitized into coding and used to store anything from cryptocurrency to<br />
information. Some of the wallets store only a specific coin, whereas some can store<br />
more than one.
What are the elements of a digital wallet?<br />
<strong>The</strong> two most important elements of these wallets are private keys and a public<br />
addresses. <strong>The</strong> access to the user’s wallet is given by the private key and thus, if it<br />
falls in the wrong hands, it’s likely that the funds in the wallet may disappear forever.<br />
Whereas the public address is given to the other traders on the network for receiving<br />
funds.<br />
Types of wallets<br />
<strong>The</strong>re are five different of digital wallets available- online, mobile, desktop,<br />
hardware and paper.<br />
1. Mobile wallet - A wallet that runs through a smartphone app. All you need to do<br />
is download the app and create an account. Mobile wallets are very handy, as they<br />
can be used anywhere. <strong>The</strong> only risk associated is losing your assets if your phone<br />
breaks down or encounters a security breach.<br />
2. Online wallet - A web-based wallet is an online wallet. <strong>The</strong>y run on the cloud.<br />
This type of wallet requires just an internet connection and can be accessed by<br />
multiple devices. <strong>The</strong> online wallet should always be given an extra layer of<br />
protection as they are very easy to be compromised.<br />
3. Desktop wallet - <strong>The</strong>se wallets are downloaded to a PC or laptop and are<br />
accessible after installation. <strong>The</strong>y are very safe as compared to online wallets.<br />
However, if your laptop or computer is affected by the virus, hacked or external<br />
damage, there is a chance to lose all your funds.<br />
4. Hardware wallet - Hardware wallets are considered as the safest, yet more<br />
expensive. Because they store private keys on the USB drive. <strong>The</strong>y facilitate<br />
transactions online, but they provide storage offline which enhances the security<br />
of the private keys.<br />
5. Paper wallet - Paper wallets are the safest to store assets as compared to all the<br />
available wallets. A paper wallet is a physical duplicate of your created public and<br />
private keys or mnemonic seed or it can even refer to a printed sheet of paper. You<br />
can send assets by exchanging the cash to wallet's public address and you<br />
withdraw or send by entering your private keys or by scanning the QR code on<br />
the paper wallet.<br />
6. Multi-signature wallet - Multi-signature refers requiring of more than one key to<br />
authorize the transaction. This technology adds up an extra-layer to all the digital<br />
assets stored. Let’s understand with an example. If you have configured your
multi-sig wallet for 4-of-6 authorized. So, to make a valid transaction, 4 out of 6<br />
authorizer’s signs will be required.<br />
Digital wallet security<br />
When it comes to security, it is necessary to understand the following aspects:<br />
Hot wallets are connected to the internet. <strong>The</strong>y use private keys on behalf of users.<br />
<strong>The</strong>se are all online and desktop wallets. Hot wallets are more prone to hacking,<br />
possible regulation or other technical vulnerabilities.<br />
<strong>The</strong> cold wallet refers to a wallet that is not connected to the internet. <strong>The</strong>se are all<br />
hardware and paper wallet. When you use cold wallet all your assets are offline.<br />
Generally, they are more secure. However, it is always advisable not to store all your<br />
cryptocurrencies in the single hot or cold wallet.<br />
Tip- Always store the long term fund in cold storage and the ready to use in the<br />
hot wallet. It’s your coins; your way. <strong>The</strong> final decision is always yours. Just select<br />
wisely!!!