Jumping into the crypto-verse requires a thorough knowledge of this virtual currency. People have to know about the fundamental definition of cryptocurrency, but they also need to have a comprehensive understanding of all the relevant crypto terms. It includes knowing what a crypto wallet is.
What is Crypto Wallet
First introduced by Satoshi Nakamoto the founder of the first cryptocurrency, Bitcoin crypto wallets can be defined as a platform where users can store their private keys to maintain the security and accessibility of their digital assets. They also allow users to receive, spend, and send currencies like Ethereum (ETH) and Bitcoin (BTC).
Think of a cryptocurrency wallet as a USB drive to make it easier to comprehend. Your digital assets may appear to be saved on the wallet. However, it's actually just the information that links to the location of your cash on the blockchain or a public ledger.
Cryptocurrency wallets are available in various forms, from web-based software like Exodus to the hardware ones like Ledger Nano S, which comes in a USB shape. All these wallets allow users to use their assets as easily as using a credit card for online shopping.
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What Does a Crypto Wallet Do?
Crypto wallets do not work similarly to conventional wallets, where they can hold physical cash. They don't store your virtual currencies. Rather, your assets are stored on the blockchain, which can only be accessed with your private key. This key is evidence of the ownership of your assets which also enables you to make transactions.
Each wallet comes with its features. But they share common usages much already previously mentioned. They provide users with one secure location to manage their digital assets with private keys that their owners wholly control. Additionally, cryptocurrency wallets allow users to receive and send digital currencies from and to any location on this planet.
Is Crypto Wallet Safe?
Suppose you have been in the business of cryptocurrency for quite some time. In that case, you do realize that digital assets are still unregulated and that they are susceptible to the threats of fraudulent transactions. Unfortunately, these threats often come from exchange providers or cryptocurrency wallets.
As stated above, crypto wallets hold the private key that allows you to perform digital transactions using virtual coins or tokens. This key also serves as your digital identity on the crypto market. Anyone who obtains it might have a chance to conduct cyberattacks, including stealing your digital assets or performing fraudulent acts.
Cybercriminals have a sophisticated method to steal someone's asset or compromise a crypto user's wallet. Therefore, securing your virtual wallet is gravely essential, for it can also protect your coins or tokens against cybercrimes. Below are some of the methods you can do to protect your cryptocurrency wallet:
1. Consider Using a Cold Wallet
Cold wallets, also known as hardware wallets, are relatively less vulnerable to cyberattacks compared to its counterpart. They don’t involve any internet connection, making it a viable option to secure your private keys.
2. Employ Multiple Wallets
The creation of a crypto wallet is essentially unlimited. Thus, you can diversify your digital assets by employing more than one wallet. Keep in mind to separate the wallet for daily transactions from other stuff. That way, you can safeguard your digital currencies and reduce the risk of a cyber attack.
3. Use a Secure Internet Connection
Avoid public WiFi hotspots and only use a secure internet connection when you perform crypto transactions. Also, use a VPN for further protection when you access your home network. A VPN protects your location and IP address, securing your online activities from threats.
What is the Best Crypto Wallet to Have?
Now that you already know the fundamental knowledge about cryptocurrency wallets, it's time to look for one that fits your needs. Below are some of the most widely-used wallets for storing your digital assets.
It’s safe to say that the Exodus crypto wallet is the ideal option for beginners. It is free, but it also features decent customer support and cold storage as additional support. This desktop-based wallet is even the best because of its speed of transactions, various functionality, and ease of use.
The Exodus wallet review is hugely positive that its company spread its wings by developing mobile-based wallets for Android and iOS. Still, the desktop version is the primary offering of Exodus. However, it’s a closed source cryptocurrency wallet, which might be prone to security concerns.
Advanced users probably agree that Electrum is the ideal choice for a Bitcoin wallet for its high level of security and customizability. Known as one of the oldest open-sourced crypto wallets, Electrum allows users to adjust their preferred fees when performing transactions.
Another greatest asset of this wallet is that it runs on a light client, which is relatively easy to set up and doesn't take a lot of space on the computer. The primary downside of Electrum is that it only supports several currencies, including Bitcoin, ERC-20 tokens, and Ethereum.
3. Trezor Model T
If security is your biggest concern when selecting a cryptocurrency wallet, Trezor is easily your best option. The Model T of this cold wallet comes with a feature where users can access third-party exchanges, such as CoinSwitch. Unlike the previous model, the Model T comes with a touch screen.
The other great thing about Trezor Model T is its MicroSD card slot that provides double protection to your device. Also, it supports a massive number of cryptocurrencies, including Bitcoin, Litecoin, Bitcoin Cash, and many more. However, it’s not a convenient wallet for beginners, and the price tag is rather high compared to its predecessor.
A crypto wallet is a secure place to store your private keys for accessing your digital assets. They are available in various forms with distinctive features that can be selected as per needs or whether you are a newcomer or an advanced user. Crypto wallets are generally susceptible to cyber-attacks; thus, several protection means should be conducted to minimize the risk of losing assets without the user's knowledge.