The world of virtual coins has brought incredible innovations. These innovations include, for example, cryptocurrency wallets. We all know cryptocurrencies as a digital asset designed to function as a way of exchange. In addition to emerging as an alternative to many traditional methods, it is also a fundamental part of blockchain technology.
The absence of a cryptocurrency wallet would make it difficult to access digital currencies such as Ethereum, Bitcoin, Tron, etc. In addition, it would be difficult to send, store, receive or track them.
That is why, it is advisable that each individual who owns digital assets has their cryptocurrency wallet and knows how to use them to get the most out of it.
What is a cryptocurrency wallet?
A cryptocurrency wallet or wallet is software that allows users to store, send, receive and track digital currencies. For the aforementioned processes to be successful, the software allows users to store public and private keys and work with different blockchains.
The blockchain, therefore, keeps the data of stored transactions, while cryptocurrency wallets act as a safe that contains digital keys in the form of codes.
Types of cryptocurrency wallets
There are different types of storage for cryptocurrencies such as:
At present, mobile phones have become indispensable for the human being. Cryptocurrency wallets compatible with mobile devices have the advantage of offering a form of payment and storage of this type of currency anywhere.
Desktop wallets, on the other hand, are a type of wallets that are installed on a computer and give users full access and control over their cryptocurrencies, this type of wallets is widely used due to its comfort since they increase security with regarding mobile wallets.
A mobile wallet, when being transported runs the risk that the device that contains it is broken, lost, stolen, etc. and if a backup of the wallet data has not been made, the cryptocurrencies stored in it can be lost.
An online wallet is different from the other wallets since you do not need to install any type of software on your computer. One of the advantages of this digital storage is that it can be easily accessed from any device connected to the network, therefore it is very efficient.
However, as everything that has a remote access, faces security challenges, that is why people who use these wallets require the implementation of additional protection methods.
A Hardware Wallet is a device that is not connected to the Internet, so it offers extra security, these devices store private keys and in order to use them they require the wallet to connect to the Internet in order to send and receive cryptocurrencies.
While these wallets are not used are disconnected from the network, so the risk of hacking is drastically reduced.
Its only negative point is the price, since the rest of online, desktop and mobile wallets are usually free, but it is a price that is worth paying if we want our cryptocurrencies to be safer.
When generating a paper wallet or paper wallet, what is being generated is a public key and a private key within a blockchain.
These keys, are printed or written normally on paper (although it can be done in other types of materials), on many occasions when creating these wallets, in addition to the public and private key, a QR code containing this data is generated, in order to Read them with your smartphone.
Before owning a cryptocurrency wallet, it is essential to study the type of security available, especially since most online wallets suffer security breaches.
A paper wallet will never be connected to the internet, making it one of the safest ways to store cryptocurrencies, although its biggest disadvantage is the fragility of the material used to store it, since it can burn, break, get wet, get lost…
Cryptocurrency wallet security
Cryptocurrency wallets have different levels of security, in addition to those that the user must add by himself. Let’s see the most common.
Private keys are associated with a cryptocurrency wallet, and they are alphanumeric keys that create a password, this password will be necessary to access your cryptocurrency wallet and when the wallet owner wishes to make transactions.
In simple terms, a private key is the password that unlocks the wallet and allows access to it.
The greater number of characters, symbols, uppercase, lowercase etc. have this password, the security level of the wallet increases.
Google two-factor authentication (2FA)
A private key is a good measure to protect your cryptocurrency wallets, but for added security it is highly recommended to add the two-factor authentication from Google, as it is a sure way to block hackers.
Every time users try to sign in to their accounts, in addition to the password or private key, they will need a Google code that will be sent to their owner’s mobile phone. With the correct code, the user can log into his account easily.
This code varies after a few seconds, so the increase in security using 2FA is incredible.
Not all wallets offer the 2FA service, so if the wallet you use does not have it, you can consider switching to another wallet or increasing your security through more secure passwords.
Backup of keywords and wallets
Making backup copies of wallets and private keys and passwords is essential to have secure cryptocurrency investment.
This type of backups is advisable to perform it on devices external to the computer, mobile or device that contains the wallet that stores the cryptocurrencies.
Losing the mobile, a hard disk failure, formatting the computer, there are many ways to lose access to our cryptocurrency wallet, it is these backups that will make it possible to re-access our assets.
There is no perfect cryptocurrency wallet for everyone, since each person has specific needs and these vary depending on the moment.
While some may need to have access to the wallet constantly to make asset movements and will opt for a mobile wallet, others may prefer that their wallets do not leave their home and will use a desktop wallet.
The most obsessed with security will use paper wallets and hide them in different places and others will prefer the convenience of an online wallet to access from anywhere.
Hardware wallets, Paper Wallets, Online Wallets, desktop wallets or mobile wallets, in short all of them are useful and have their applications of use, the most important thing is to make proper use and remember that the security level of these wallets in many occasions is in the hands of the user.