Cryptocurrency Wallet Use Guide
Unlike most currencies, cryptocurrencies are digital; for this reason, especially when it comes to storage, it requires a completely different approach than the others.
Technically, you cannot keep your cryptocurrency in your pocket or under your pillow. Instead, you have secure private keys to access your public digital money addresses and to confirm transactions. By using private keys and public keys in these wallets, you can check the cryptocurrency you have and you can display the balance or transfer money.
How does Cryptocurrency Wallet work?
With crypto wallets, you do not actually keep your money physically in one place. In fact, your digital money is the transaction record stored in the blockchain. When users make a digital money transfer transaction, they approve this process and the private key must match with the public key. When the keys match, the sender’s balance decreases, while the recipient’s balance increases by that amount.
Types of Cryptocurrency Wallets
There are several different types of cryptocurrency wallets that meet different needs where you can store your cryptocurrency. There are five common types of wallets: desktop wallets, online wallets, mobile wallets, hardware wallets, and paper wallets. While desktop wallets can only be accessed from your computer, mobile wallets can be accessed from your phone. If privacy is your priority, you may prefer to use paper or hardware wallets.
To use the desktop wallets, you first need to download it and install on your computer. Thus, you can access your desktop wallet only from the computer to which you downloaded and installed it. The weakness of the desktop wallets is the security issue. Because if the computer is attacked by a virus or if it already has a virus, there is a risk of losing all the money.
Online wallets work through cloud systems. The strength of these crypto wallets is that you can access them from all smartphones that have a connection to the internet. On the other hand, it is vulnerable to attacks and theft because it keeps your private keys online.
Mobile wallets work with applications that you can download on your smartphones from online stores. They can be used in stores that use cryptocurrency as a method of payment in daily use. It is also difficult for these wallets to be protected against an attack on the phones or against viruses.
As can be understood from their names, these crypto wallets keep cryptocurrency through a hardware device. For this reason, they are safer than the wallets based on software. Though they do the transactions online, they store users’ private keys with hardware such as USB sticks. This offline storage is also called cold storage. It’s simple to use. It is enough for you to plug your hardware wallet into a device with internet and enter your password. You can then make and confirm any transaction. These wallets keep your money and your private key in the offline environment and keep it safe from any attack or theft.
The most reliable and easy to use crypto wallet is paper wallets. To use these wallets, you only need to print out your private and public keys. In paper wallets, which are simpler to use than others, money transactions are done at the address written on the paper. To withdraw or spend money, it is enough to transfer the information written on the paper to the software wallet.