Ulas Crypto

Crypto Wallet - Cryptocurrency wallet.

What is a cryptocurrency wallet?

Crypto wallets is a software program that stores private and public keys that allow you to send and receive coins through blockchain technology. If you want to use cryptocurrency like Bitcoin or Ethereum, you need to have a wallet.

How does a cryptocurrency wallet work?

There is a misunderstanding of how the crypto wallet works, even though there are millions of people using it. When we talk about wallets, the first thing that comes to mind is a traditional wallet or pocket wallet where we save real money. Crypto wallet is not a traditional wallet because it doesn't save real money.

Actually, cryptocurrency is not stored anywhere or anywhere in the physical form. There is a record of transactions on the blockchain. Technically, when a user sends you all types of cryptocurrency, they actually sign ownership of the coin into your wallet address.

To enjoy these coins and unlock funds, the private key stored in your crypto wallet must match the public address that is the destination of the currency. The balance in your digital wallet will increase and decrease in the sender's wallet, only after the private key and public key match.

Actually, there is no genuine coin exchange. Coin shipping and receipt transactions are centered on transaction records on the blockchain and changes in the balance in your cryptocurrency wallet.

Cryptocurrency Wallet Type

There are many types of cryptocurrency wallets that are used to store and access digital currencies that you can choose from. Wallets are broken down into three main categories namely, software, hardware, and paper. The software has more sub-categories namely, desktop, cellular, and online.

Definition of cryptocurrency wallet types and characteristics they have:

• Desktop Wallet

This wallet is downloaded and installed on a PC or laptop. Only one computer or laptop where the wallet is downloaded and installed can access it. Desktop wallets give you the best security, but if your computer or laptop is hacked, there is a chance that you will lose funds.

• Online Wallet

Online wallets can be accessed from any location when they walk in the cloud. This wallet is very convenient to access. The thing to remember is that this type of wallet stores your private key online and is also handled by third parties. Therefore, there are many possibilities for this wallet to be hacked and vulnerable to theft.

• Cellular Wallet

Here the wallet runs in the form of an application on the phone. This is very helpful because you can access it from any location. They can even be used in retail stores. They are simpler then the desktop wallet as on the telephone there is limited space available.

• Hardware Wallet

This wallet is different from the software wallet. Here you store a private key on a hardware device such as USB. Hardware wallets are safer because they make transactions online and are stored offline. They are compatible with many web interfaces and also support different cryptocurrency. Users simply plug their device into any computer or internet-enabled device, enter a pin, send a currency, and confirm. Hardware wallets allow you to transact easily while keeping your money offline and far from danger.

• Paper wallet

This type of wallet is easy to use and provides a high level of security. The term paper wallet can mean prints or physical copies of private and public keys, it can also mean a part of the software used to produce public and private keys which are then printed. Transferring each cryptocurrency to your paper wallet is done by transferring funds from your software wallet to the public address displayed on your paper wallet. On the other hand, if you want to withdraw or spend coins, you only need to move the paper wallet to the software wallet. This process is called 'sweeping' which can be done manually by entering your private key or simply by scanning the QR code on the paper wallet.

How to secure a cryptocurrency wallet?

Wallet security depends on what type it is. Security intensity varies from one wallet to another. Most online wallets tend to be hacked or their funds were stolen just because they are connected to the web. There is a very low chance that the offline wallet will be hacked or the funds robbed because it is not connected to the web.

The precautions you can take to secure your crypto wallet are:

• Back up your wallet

The first step is to store only a limited amount of cryptos needed for daily use online. This can be anywhere from any device such as a computer or cellular, where the number of other cryptos will be very safe on the wallet offline. Offline storage will protect you from computer failures where your cryptos are vulnerable to being lost or stolen. However, those passionate hackers cannot be avoided. In an online wallet, there is always a risk of being hacked and funds stolen.

• Update software

The second step is to keep your computer or laptop software updated. This helps you improve security. You must update your wallet software and your computer or laptop.

• Add an extra security

The third step is to add an extra layer of security to your wallet. More layers of security, better. Setting a difficult password and ensuring that any withdrawal of funds requires a password is only the beginning. Use a wallet that has the best reputation and that provides two-factor authentication. And that requires an additional pin code every time the application is opened.