What is wallet cryptocurrency and how crypto wallet work?
Wallet Cryptocurrency plays an important role in blockchain technology.
Because without a cryptocurrency wallet or crypto wallet, you cannot receive, store, transfer, or track digital currencies such as Bitcoin, Ethereum, Litecoin and many more.
Even now there are more than 1600 digital currencies already circulating in the crypto market.
Digital currency is designed so that we can control our money, become like a bank for yourself.
Therefore all fans of the digital currency must have a crypto wallet to store their digital money.
A cryptocurrency wallet is different from a physical wallet like the one in your pants pocket.
It contains physical flat money that you can leave at restaurants after you eat pizza as a means of payment.
The cryptocurrency wallet only records the value of your digital currency, it has no physical form but has value, like a cellphone purse when you want to call your girlfriend.
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What is wallet cryptocurrency?
Wallet cryptocurrency or crypto wallet is a program software that allows you to store private and public keys associated with various blockchain.
Which allows you to receive, send, or monitor digital currencies.
There are some types of wallets, some of which are only for single cryptocurrency, some are for several coins.cryptocurrency.
The function of the crypto wallet is more or less the same as a real leather wallet, it functions to store the cash we have.
It’s just that the crypto wallet does not place physical coins like physical money in your leather wallet.
In cryptocurrency, there is no physical form but only a number that has the same value as flat money.
The cryptocurrency wallet has a unique address that can be shared publicly.
Which allows one to send cryptocurrency using that address.
Each address has a unique combination of letters and numbers, so if someone sends digital currency to that address, there will be no mistake in sending the money.
Here is an example of a unique combination of cryptocurrency wallet addresses.
How does crypto wallet work?
In general, a cryptocurrency wallet is a software where you can see the total balance available.
And also you can make transactions, you can transfer some crypto coins to other users using public addresses.
The public address is a specific account number in the form of a combination of letters and unique numbers.
If a user will transfer some cryptocurrency values to you, you must give him a public address.
Public addresses are like bank account numbers, where even if you share them with others, they cannot access what is in the account.
Private key functions like a PIN in your account, you have to protect this from other people.
Because if someone else knows the private key of your wallet, then the security of your crypto wallet is in danger.
They can access your account and do something outside of your wishes.
A public key is a unique string of numbers that linked with your crypto wallet, this will add an extra layer of security to your wallet so it won’t get hacked.
The private key has a longer character than the public key, so this is very high security.
See the example below.
Private key 870cceeff82c538ad3a72b3daf8300c0e1153af2dc9598171091753951983ca1
Public key 1Q9RVP1yQSB3taGriKqqFQKrbhYxhxQFSi
If at first glance, they look different, it is true, but blockchain technology software can recognize that the two are interconnected.
Then there is no need to be a serious problem, as long as you can use the crypto wallet safely, it is enough to start investing in cryptocurrency.
Types of wallet cryptocurrency
Some crypto wallet providers have different ways to be able to access wallet addresses.
There are several types of cryptocurrency wallets, some of which are
The hot and cold wallet
A hot wallet refers to the type of crypto wallet that is connected through the internet.
For example, you send some funds to your crypto wallet at an exchange, like as at Binance, then you deposit funds to an account called a Binance hot wallet, this is easily accessible and makes it convenient.
Cold wallet refers to the type of crypto wallet that is not connected to the internet.
They have a physical store for offline keys, so cold wallet security standards are safer than hot wallets.
Because hackers will not easy to access them.
Software wallet cryptocurrency
A software wallet is a type of wallet that is connected to the internet or can be said to be a hot wallet.
In general, a software wallet included
- Desktop wallet, you need to install software on your desktop to be able to access your wallet.
- A web wallet or online wallet, it is stored in the cloud and you can access it with the internet with any device, the private key is stored in the cloud.
- Mobile wallet, you need to install software on your smartphone to access the wallet.
Hardware wallet cryptocurrency
Hardware wallets are one of the cold wallets, this is physical storage such as USB.
Providing higher security because it is not directly connected to the internet, so it is safer from hacker attacks.
But the risk is when the hardware gets an error and is difficult to access.
To enter the wallet you must connect to the device then connected to the internet.
A paper wallet is a type of crypto wallet where private keys and public keys can be printed in the form of QR codes.
So this includes a cold wallet because it is not connected directly to the internet.
With this paper wallet, from a random number generator will generate certain printable code.
If you want to make a transaction you must enter the private key or use QR code scanning.
But the weakness of this wallet is that you have to send all balances once sent, you cannot send in part.
For example, you will send 2BTC, and you have 10 BTC, then you must send 10 BTC to the web wallet or mobile wallet, then you can send 2 BTC.
What is the most secure wallet cryptocurrency?
In terms of security, a cold wallet is the safest crypto wallet, because it is not connected to the internet.
So you do not need security from third parties, you store it on any device offline, so it cannot be reached by hackers.
However, the cold wallet does not mean that it does not get a problem.
If the firmware on the device has a problem that makes it difficult to access.
You will lose your private key and this will lose your wallet access.
Meanwhile, hot wallets, they are connected to the internet and this is vulnerable to hackers.
So you have to pay attention to the security wallet of the provider whether they have good security standards or are quite risky.
With a high-level layer level of security will certainly make it difficult for hackers to steal private keys.
Even though the online wallet or hot wallet is vulnerable to hackers.
You must be smart to take steps to secure your wallet.
- Backup wallet. Store only a certain amount of funds for online purposes only, you can place most currencies in an offline wallet such as Ledger Nano or paper or USB.
- Keep software updated. Keep the software up to date so that you get better security, not only wallet software but also your device.
- Add a layer of a security layer, with a high level of a security layer, will be better, using a complex password and choosing a wallet that has a good reputation and adding a layer of security such as 2FA and pin code will certainly make the wallet safer.
Store the password offline and don’t lose it, this is just in case.
The transaction fee for the wallet
Using crypto digital currency has a lower fee than the fee from the bank transfer fee.
Maybe this is one of the reasons why many people want to use digital currency as a method of online payment.
You can even set the number of fees you will spend when sending money.
But the lower the fee will get lower priority so that your transaction will be confirmed, your transaction may be confirmed for an hour or even a day.
For faster processing, you have to adjust to a higher fee.
So in the case of fees to using the crypto wallet is not a big problem, there are even transactions that have no fee at all.
Is the wallet cryptocurrency anonymous?
The wallet is pseudonymous, like anonymous but not really.
All crypto wallet transactions are stored publicly and permanently on the blockchain.
You don’t find your home address there, but data such as your wallet address can be traced to your identity in several ways.
What’s the best wallet cryptocurrency?
We have summarized some of the best crypto wallets from several reviews.
Many give different opinions indeed, but we will try to trace according to suitability to the needs, and here the following review.
Coinbase itself is one of the crypto exchangers that provides more than 30 supporting languages
When you access the site they will automatically appear in the language where you live.
You can buy and store ERC 20 tokens through this wallet and also participate in airdrops and ICOs.
This wallet is suitable for beginners, but the consideration is security, they are still learning from the mt. Gox loss incident because of a hacker attack that losing more than half a billion dollars.
Trezor is a crypto wallet that has high-security standards, this is because they place on physical devices, which are not connected to the internet.
This is one of the best cold wallets, the choice of many crypto users.
Trezor also provides reliable backup and recovery protection.
So that when the device gets damage you can use seed recovery to get your crypto wallet back.
They do not provide a crypto trading platform like Coinbase, but there are some products that you can choose according to the budget and standard features of the wallet.
It seems that there is no other competitor for the best desktop wallet, it is still Electrum which is the best desktop wallet version.
It can run on Windows 7 or higher, Linux, Python, Android, also Mac OS X.
You need to download and install it on your computer, and must download it via their official website, not from other sources because it is vulnerable to phishing.
They have also had security 2FA, but if your computer is lost, crash or there is a problem with the device, this will cause the risk of losing access to your wallet.
So using a backup wallet is highly recommended.
At first, they used blockchain.info on their site, but now it is known they switched to using blockchain.com for their site
Blockchain is a technology that underlies cryptocurrency, you can also buy and sell cryptocurrency through blockchain.com.
They support 35 languages so this makes it easier for you to understand how to use the blockchain wallet.
Has a good security standard with three layers of security, email verification, 2FA, and backup security phrases.
This may be a tough competitor for Electrum, apparently, exodus also offers for mobile, desktop, and working with Trezor.
Of course, this provides an easier to choose software for users to adjust the device used.
You can download exodus for Windows, Linux, and Mac.
From a security perspective, it seems that Electrum is better than an exodus.
Even though the user places a private key on the computer and not on the exodus server.
However, if there is malware on this computer it can be vulnerable to data theft.
But the appearance of the exodus is more intuitive than electrum.
Mycelium is a Bitcoin wallet, received an award as the best mobile wallet from blockchain info in 2014, this wallet can only store bitcoin.
It might be a bit more complicated to use mycelium than other bitcoin wallets, but they offer integration with Trezor.
They do not offer desktop wallets but with a bank security grade in their application.
You can easily carry a bitcoin wallet anywhere and anytime.
Supporting multichain, this is the best choice for crypto wallets that have been used by many users.
Supports wallets for desktops, and also for mobile.
In terms of security, Coinomi places a private key on the device used, they don’t put it on their server.
However, their security has been an indication to be vulnerable to desktop wallets.
When users import the seed phrase to the wallet.
Along the process that seed phrase is actually sending to an external service by Google Spell Check.
With this wallet you can adjust the number of fees you will spend, and they support many coins, such as Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, Monero, Dash, Zcash, Tether, USDC, GUSD.
A cryptocurrency wallet is one of the best ways to receive, send, and also monitor cryptocurrency coins.
This is a breakthrough in the way of online payment, with low transaction costs, and lower than bank transfer fees.
But there are many crypto wallets on the market, so for users, it is sometimes difficult to determine the best choice.
Even this article you collected from several sources, and summarize it in one package.
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