Cryptocurrencies — a thousand of it in the exchange market that build to achieve their own goal. But, one thing they are in mutual is to make their cryptocurrency use worldwide and have a huge amount of community. Many of them also build crypto wallet which allows their users to keep their cryptocurrency. There are even platforms solely build their own solutions for users to make transactions or just to keep their coins. They all differ in terms of blockchain tech that being used, security, supported cryptocurrencies and services. If you’re a beginner and do not know where to start from, this is the guide you must-read.
What are crypto wallets?
Crypto wallets = bank for fiat currencies, you get to deposit, withdraw or transfer out from it. However, banks have plenty of intermediaries, while crypto wallets usually have one or even none service providers.
As these wallets are operated by blockchain network, they recorded each of your transactions in the blockchain public ledger of the cryptocurrency you’re using. Crypto wallets use address code just like your bank account number. They are all usually ranging between 14 to 35 alphanumeric character and it is different according to the cryptocurrency. If you’re using a mobile phone, they are represented in QR codes for easily read purpose. You can receive and send cryptos by using this wallet address.
If a wallet address is being said as your bank account, wallet keys are your password for a bank account. It is also a series of numbers and letters, generated by the wallet you registered. This private keys only are known by you to secure your account balance against hacking, lose your private keys mean you’ll be losing the coins in that wallet.
There are a few types of wallet that come with different advantages and disadvantages. They can be different on the security layers and how easy they are to manipulate.
- Online Wallets — These are an abundance of crypto storage platform out there in the crypto industry. Only a very simple registration with little layers of security protection and they are free to use. The main purpose is to provide fast and flexible as well as easy to handle interface for a small number of trade transactions. Most of them did not implement encryption on keys and are easy to hack.
- Desktop Wallets — It is an open-source desktop wallet programs come with much higher security compared to the online wallet as they save your wallet keys on your computer. They are encrypted with a password and protected by your computer internal antivirus software.
- Mobile Wallets — The newest development on the mobile platform. Just a few clicks using your finger, you can create your own storage space in the blockchain network. Most of the mobile wallets apps allow you to check your balance easily and the most important they come with the payment system, where users get to pay through their mobile wallet.
- Hardware Wallets — If you’re looking for the best security wallet, this is it. These devices provide tons of security measures (PIN codes, physical buttons for transfer confirmation, passphrases, passwords, and others). But, this wallet cost a very high price somewhere from $50 – $5000 whereas most of them are free.
Keep an eye of the industry
This is crucial when choosing a wallet for your coins to be kept. Hardware-wallet or open source wallets are the ones that one should choose and go for. But because of the cost that it took, most of the people choose online wallets that are free to use and flexible. So, when using those online wallets, you should create a brand new and highly secure private keys for your wallet to avoid disappointment.
Let’s have a look at the recent biggest hack incident. Cryptopia, New Zeland based and it is one of the largest cryptocurrency exchange market experienced hack attack losing $3.2 million in tokens by unknown cybercriminals. Cryptopia in now re-open and allow users on the trading. The investigation is still undergoing and yet to announce who is the responsible hacker/s.
Final Words For Wallets
As seen from the above explanation, there are various types of wallets circulating in the markets, each of them holding their own pros and cons that you really should take into consideration. Online wallets are easy to use but somewhat lack of strong security measures. A great tips for you if you’re looking into online wallets: create strong passwords and private keys that not easy to be hacked or decrypt.