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Know The Right Way To Store Your Crypto

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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!!!

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