The ever-growing popularity of the Bitcoin cryptocurrency has led to the fact that more and more people are becoming interested in the issues of buying and selling this type of digital money. Someone was interested in the opportunity to earn a game on fluctuations in the exchange rate, someone was attracted by the anonymity and speed of money transfer, and someone decided to make an investment in the future in this way.
And the first problem that potential Bitcoin owners face is how to store this coin and how to protect their accumulations from theft.
What is a cryptocurrency wallet?
To store the vast majority of cryptocurrencies, special cryptocurrency wallets are used. In simplified terms, crypto-paper is a certain area of a distributed registry (blockchain) that stores a record about the status of your account (the number of coins on it, the history of all transfers, etc.). To identify and manage a crypto wallet, two types of keys are used, which are visually presented as a long set of letters and numbers:
- The public key is the identifier or address of the wallet; you use it to receive payments to your wallet.
- A private key is a kind of password that is required to confirm outgoing transactions.
Important! Remember that cryptocurrency transactions are irreversible. Do not share the crypto-paper private key with anyone. If an attacker gains access to your coins and transfers them to another address, they will not be returned in any way. Get more detail at profit revolution homepage.
Types of Crypto Wallets
Hot wallets require a permanent connection to the Internet, some of the information is stored on external resources, which affects the security of your coins. They offer high speed and almost instant access to transactions. What types of hot wallets are there and what are the most popular representatives of them?
This type of wallet is an application that installs on your PC. All keys are stored on your computer, the remote server only checks and validate transactions.
This type of hot wallet provides the most security for your funds. Weaknesses include the ability to install only on laptops or PCs. The most famous thin desktop wallets for bitcoin are Electrum, Jaxx, and Exodus. True, the latter two have browser and mobile versions.
This crypto-paper looks like a site on the Internet and all the functionality is implemented in the browser.
The advantages are accessibility from any place where there is internet through a browser. The main drawback is that control over funds is provided by service representatives. The most famous online wallets are Coinbase, Blockchain.info, CryptoPay, Xapo. The same class includes wallets of cryptocurrency exchanges and payment systems.
Mobile crypto paper wallet
This wallet is a smart phone app. A convenient way to shop for crypto anywhere where there is NFC support or through QR codes. The most popular among users were the mobile wallets Mycelium, Bitcoin Wallet, GreenBits.
Cold wallets offer the highest level of protection and do not require a permanent network connection to access cryptocurrencies. For this, users have to pay with some inconvenience associated with their work: slowness, high requirements for hardware resources, a higher price, etc. Consider the varieties of cold bitcoin wallets.
Like a hot wallet type, a desktop thick wallet is an application for your computer. The main difference is that you download a full copy of the Bitcoin blockchain to your hard drive. Thanks to this, you yourself check all transactions for correctness, i.e. Your PC becomes a full-fledged node in the Bitcoin network you have to pay for it with free space on your hard drive: a thick desktop wallet takes more than 200 GB.
The advantages of this type of wallet are a very high level of protection for your bitcoins, as you have all the keys and you are responsible for authenticating the transactions. The main disadvantage is that it takes up a lot of space on the hard drive and requires full synchronization with the blockchain to work, which with rare use can take several hours.