A cryptocurrency wallet is not as simple as the name suggests. Let’s look at what it is, how to download it and where to put it.
A cryptocurrency wallet is a tool you can use to interact with a blockchain network. Various crypto wallet types can be divided into three groups: software, hardware, and paper wallets. Depending on their working mechanisms, they may also be referred to as hot or cold wallets.
Are you confused yet?
Yeah, I know it takes time to understand the new laws and language of the digital metaverse. But once you in, boy, does it pay to get on the crypto train.
It enables users to send and receive digital currency and monitor their balance. So, if you want to use Bitcoin or any other cryptocurrency, you will need to have a digital wallet.
However, they don’t store any currency. The currencies don’t get stored in any single location or exist anywhere in a physical form. All that exists are records of transactions stored on the blockchain.
Simply put, the so-called ‘wallet’ is software that stores your private and public ‘keys’ while interacting with various blockchains.
When someone sends you crypto, all they are doing is simply signing off their ownership to your address. So now we come back to that confusing introduction.
There are three ways you can store and access your digital currency wallets. So, if you want to make one, then listen up.
The first category is software wallets or online wallets: keys are stored in an app or other software – look for one protected by two-step encryption. This step makes sending, receiving, and using your crypto like an online bank account, payment system, or brokerage.
Software wallets are downloaded and installed on a PC, laptop or mobile device. They offer a very high level of security, but if your device is hacked or gets a virus – you might risk falling into the scammer’s hands.
If you plan on making one, the process couldn’t be any easier. All you have to do is find a service online that does it for you. The idea here is that the service takes over all the storage duties for your crypto, but they take a small transaction fee from you in exchange.
Here are the top picks for the best crypto wallet services of 2022, according to Money.com:
Coinbase Wallet – Best for Beginners
Electrum – Best for Bitcoin
Mycelium – Best for Mobile
Ledger Nano X – Best Offline Crypto Wallet
Exodus – Best for Desktop
The second category is hardware wallets: keys are stored in a thumb-drive device that is safe and only connected to a computer when you want to use your crypto. The idea is to try to balance security and convenience.
This category has increased the security of unplugging your wallet, storing it safely or plugging it in, entering a pin, and sending the currency.
The third category is paper wallets: keys are written on a physical medium like paper and stored safely. This wallet, of course, makes using your crypto hard to use because digital money can only be seen on the internet.
When making a wallet for these two, this is when things get a little more complicated. To do this, you will need an SSD – a regular hard drive won’t cut it. This idea is because you will need to download the entire transaction history.
For example, if you choose Bitcoin, you will need to head over to Bitcoin.org and download the ‘Bitcoin core’. You can choose different types of wallets with various storage options, allowing you to access a maximum of 4 -6GB of storage.
Inside the folder, you will see a file called ‘wallet.dat’, which below will have the address code that will allow you to send and receive cryptocurrency.
And wah-lah! You have a wallet.
Now before you run off and give it a go, cryptocurrency may be a good investment if you are willing to accept it is a high-risk gamble which could pay off – but also that there is a strong chance you could lose all of your money.
It is vital before investing in bitcoin or other cryptocurrencies that you go in with your eyes open.
Your cryptocurrency wallets awaits!