Thursday, 21 June 2018

What is Cryptocurrency Wallet, How to Choose One?

A wallet is something where you store your money so is the cryptocurrency wallet with the difference that you store your virtual money which is cryptocurrencies. So basically, a cryptocurrency wallet is secure digital wallet to store, send and receive any digital currency. If you want to use any cryptocurrency, a cryptocurrency wallet is a must. Every cryptocurrency has their own wallets or there are some third-party wallets for some.


crypto-wallet
Crypto Wallet

How does a cryptocurrency wallet Works?


So yes, these wallets store virtual currencies(cryptocurrencies) however, there must be some entity in the form of which virtual currency is stored or measured. The tokens are stored in the form of public and private keys which interacts with various blockchains to enable send and receive feature and monitors the balance.


Some wallets you can look to


There is a wide range of crypto wallets as no wallet supports all the coins however few of the wallets support more than one coin. Crypto wallets are secure however the extent depends on the wallet you are using. Do your own research before using any wallet and use official wallet of the coin if available like litecoin core, Bitcoin core wallet Ethereum wallet or MyEtherWallet for Litecoin, bitcoin, and Ethereum based coins respectively.

There are some custodial wallets as well where you do not need to control your private key but are kept on third party company servers. Coinbase is such an exchange where you need to put your tokens in a custodial wallet. You have to have trust in custodians as they make transactions with your tokens on your behalf.

Security


Crypto wallets are secure but as said above the extent to which it is secured depends upon the wallet you are using. The security of your wallet is based upon the best practice.

1. Always use google authenticator for another layer of security.

2.You should not share your wallet password with anyone.

3. Do not store a large number of tokens for long if not in use.

4. Always take a back-up of your account because if you lose your wallet or private key you lose your money.

These wallets aren’t tied with any physical entity, however, all the transactions are stored on the blockchain. Before choosing any wallet, you have to be sure about your intent. There is an unending list of growing wallets but you should take your time to choose one for you. It’s always good to invest in cryptocurrencies and better than that if you are playing safe with your asset.