What is a wallet?
As with many other terms in the world of cryptocurrency, we owe this word to English, which means “wallet”. Anyone who invests in crypto owns a wallet, otherwise you won’t be able to use your bitcoins or other cryptocurrency.
Without this wallet, it will be impossible for you to keep, spend or receive cryptocurrency. In other words, its role is to replace a traditional bank account. There is not only one type of wallet, depending on your use you will have to choose this or that type of wallet.
At the time of creating your portfolio, you will receive several pieces of information including:
– theprivate key
which will be useful for you to connect to your wallet, in other words it is like login credentials
– the public key
: to explain simply, if we compare with a bank account, the public key is equivalent to the IBAN code. The public key will be useful when you decide to make transactions.
Note that you will need a wallet for each currency
, you can’t make one to store different currencies. If we take the comparison with a bank account, you can not have an account with dollars, mixed with euros. These will be two separate accounts, so as not to mix currencies as well as rates. The different types of Hot Wallets (online)
It is the most used and the only type that is listed in our comparison.
It is an application on the web or an application that you download on smartphone.
The goal is to offer immediate accessibility, to allow users to use cryptocurrencies. Generally, this kind of wallet is recommended for daily use.
Do not forget that your account will be online, and that there is more risk following this use. In the event of an attack by a hacker you may lose full access to your account.
There is also the desktop wallet that downloads and installs as an application on your computer, without it necessarily being related to the internet. This means is rather used for small amounts, it remains less risky because it is hosted by you and not with a third party.
Cold wallet (offline)
This is the way to store outside the internet.
It exists in 2 forms:
Hardware Wallets
The primary objective is to keep all your keys safe, nothing is connected to the internet. So it’s less vulnerable, you’ll take fewer risks.
In this case, hackers have no access to your wallet, for this to be possible, it is necessary that the person can hold your equipment, note that some tools allow you to enter a PIN code, which adds additional security.
Don’t panic if you damage your hardware, as you can create a backup code to recover your crypto safely. It is a form of crypto wallet so simple that it is suitable for beginners.
However, hardware wallets are paid! We must not forget that it remains hardware, so you will necessarily have to pay to get it, because hardware wallets can take the form of USB key or external hard drive for example.
Paper wallet
This solution allows you to print your wallet in paper format, as its name suggests. You will be able to receive these papers using your public address. Most of the time, papers work through QR codes.
The advantage is that there is no trace on the internet, it is probably the one that holds the most security since there is no link with the internet, which means that it will be impossible to have your account hacked. The crypto must still be entered into software on your computer.
However, it is necessary to pay attention to the paper, because there will be a lot of information on it (pay attention to the water for example), some people store these notes in safes to avoid any risk.
Although ideal for long-term storage safely, it will nevertheless be more difficult to use them (exchange them or make transfers), and it will therefore not be easy to use on a daily basis, but rather to store for the long term in order to make the currency grow. Secure your wallet
As with everything, you have to be careful, because more and more scams are designed to take your BTC! Some small reminders, common sense, not to forget:
- Golden rule : trust only yourself when it comes to crypto, never let yourself be influenced by others and keep your private keys secret.
- Money rule : Remember to check the applications (or even websites) on which you create your account, it will take you little time and may allow you not to rush headlong into scams.
- Bronze rule : Remember to encrypt your wallets, it is a way that will allow you to protect yourself even more. So as not to lose everything because of a hacker.
