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An Introduction to Crypto Wallets
https://bitcointrader2.com is a platform by which you can trade easily. It helps to interact with an entire network of blockchain. Both public and private user keys are stored in these wallets safely. They have very high security and are absolutely safe for both acts of sending and receiving currency. Without crypto wallets, there is no existence of cryptocurrencies. Depending on the primary work of the wallet, there are three main classifications, namely hardware wallet, software wallet and paper wallet. Each wallet is further classified into hot or cold wallets. Software wallets can be easily accessed and are convenient or user-friendly. On the other hand, hardware wallets are not so accessible but much more secure than software wallets. Paper wallets as the name suggests are printed materials which are becoming obsolete and unreliable with passing time. It is important to understand that crypto wallets do not store actual currency or money but generate essential information for the necessary blockchain transaction that the users want to make. Based on the generated pair of public and private keys, an alphanumeric address is generated. This address is used to identify the location of the transaction of sending or receiving the cryptocurrency in the blockchain. Funds and coins are transferable only from one address to another, it does not leave the network of blockchain. The public key can be shared to send and receive funds but the private key should never be shared with anyone else. As long as a user knows the private key, the cryptocurrencies can be accessed from any device without hampering the system.
Types of Wallets
Category of wallets are based on methods of storage and where exactly is the location of storage of cryptocurrencies. As already discussed earlier, they consist of a private and public key.
- Hot wallets and cold wallets: The simple difference in both being connected to the web or not. Hot wallets are crypto wallets which are connected to the world of the internet while cold wallets are not. It is obvious that hot wallets are more user-friendly, accessible, easily set up and very easy to use but less secured. In comparison, cold wallets do not require an internet connection, they have stored offline data and are much more secured than the hot wallets. Cold wallets are like safe vaults and are useful for HODLers. Direct trade from cold wallets is possible.
- Hardware wallets: Used for handling the public keys, this is a separate hardware device that looks like a USB with a screen and two buttons on the side. This device is generally not recommended for beginner investors. It can be connected to any laptop or PC and used to access the funds and coins. Hardware wallets provide more security than that of hot wallets and cost around 70-150 dollars. Hardware wallets are one of the safest crypto wallets available in the market.
- Paper wallets: As the name suggests, they are a piece of paper with a printed QR code. The wallets which allow the users to download the code for generation of a new offline address can be printed on papers. They are very secure but a number of errors on them have made them highly unpopular. Partial funds cannot be sent and these cannot be reused. These problems have made paper wallets almost obsolete despite it being one of the most secure options.
- Desktop wallets: A software which can be used on the desktop or laptop and turns into a cold wallet when not connected to the internet. This is also a safe and secured wallet. Having an anti-virus in the system is a must for the internet often threatens the security. These software are user-friendly, accessible, secured and involve no third party. These are software wallets which needs protection and extra security.
- Mobile wallet: As the name suggests, they are software that can be used on smartphones. They are easily accessible and user friendly because they use QR codes for transactions. Encryption is essential in mobile wallets because they are continuously connected to the internet and are open to malware and virus attack threats. They are gaining popularity because they can be used on the move.
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