Crypto Wallet: Secure Your Crypto Assets

A Crypto Wallet is a device that lets you store and transfer cryptocurrency. It stores the private and public keys of users. The wallet doesn’t mean it in the same way the physical wallet holds cash. The crypto wallet holds the private key to make transactions and it shows the balance in your addresses by reading the public ledger.

Breaking down the private and public keys

The term Key is a group of long strings with not recognized characters. The public key allows receiving the cryptocurrency transactions while the private key proves the ownership of the respective public key. The public key is open to anyone whereas the private key remains secure and secret.

For instance, the public key is like a bank account and the private key is the password or pin of the account. Public keys are used to encrypt data. Encrypted data is decrypted using the private key.

Types of Crypto Wallets

There are two categories of crypto wallets. One is a hardware wallet and the other is a software wallet. Software wallets are like desktop programs or browser extensions and it helps people to send, receive and store crypto.

Hardware wallets are physical devices that are plugged into the computer and it has the same purpose as software wallets.

Software wallets are called hot wallets and hardware wallets are called cold wallets.

Hardware Wallets

It is a device that stores crypto offline. You can plug in a hardware wallet from a USB port which is considered to be more secure. It interacts with computers in ways like a web-like interface, application, or separate software wallet. It tends to be more complicated to use when compared to the software wallet.

Software Wallets

It is a computer program that stores crypto online. These are unique in that they may change to different cryptocurrencies but the hardware wallet is mostly the same for many currencies. Software wallets are used on the web and are considered to be less secure when compared to hardware wallets. The software wallet application can be installed on either phones or laptops. It has three main types such as web-based wallets, desktop wallets, and mobile wallets.

Merits and demerits of Crypto Wallets

First, we’ll explain the merits or advantages of the crypto wallet.

  • Ownership of the money: The crypto belongs to you only if you hold the private keys.
  • Transaction whenever to whoever: The network is not controlled by anyone so anyone can transact at any time with anyone.

Here are some demerits of Crypto Wallets,

  • Full Responsibility: As there is no central authority and everything is decentralized, it’s up to you which means you own complete responsibility for anything that goes wrong or unexpected.
  • Slight difficulty in learning: To perform with a crypto wallet, the user must require basic computer knowledge and it takes time to get familiar with this technology.