Cryptocurrency Wallet – Explained

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Have you realised how many bank charges are just paid over to banks to keep your money? Do they decide how much you can earn on investments? If you would like to take control of your finances, take a look at a cryptocurrency wallet and what it can do for you.

• What is a Cryptocurrency Wallet?

Cryptocurrency wallet is a software program that stores all your public and private information by networking with various blockchain. A blockchain is encrypted and holds all sensitive information that prohibits hackers to get into your account.

How does a Cryptocurrency Wallet work

Depending on the requirements you are going to be using the crypto wallet for, the software program will be downloaded onto your chosen devices. This software program will be encrypted with a public, and private key when money is sent using one of the cryptocurrencies.

The public key will be the information you give to the person sending you money. Your private key is the most important component of this wallet and should be kept safe at all times. If someone had to get hold of that key, they can clear out your account by sending all your crypto currency to themselves. Once the transaction is finalised, added to the ledger account, it cannot be reversed and your money is gone.

Types of Cryptocurrency wallets

To give you a better understanding of your options, have a look at the different types of cryptocurrency wallets.

1. Desktop Wallet:

The desktop wallet is suitable for downloading the software onto a laptop and PC. However, you will only be able to access your wallet from that specific laptop. Ensure to always make backups of your information on a secure drive.

2. Online Wallet:

Also known as a cloud wallet, you can access it from any online device, eg. a tablet. There will be no downloading of an application to run this wallet. Keep in mind that your private key will be stored online, thus making the cloud wallet riskier.

3. Mobile Wallet:

A mobile wallet is suitable for your phone. Often they will require more security by adding a security phrase to your account. All your backups are made directly onto the blockchain.

4. Hardware Wallet:

This wallet is seen as the most secure, as the information is stored on a cold storage device, eg. USB. Ensure to have a backup in another place other than on the hardware device.

5. Paper Wallet:

Yes it is paper; the private key is printed on a piece of paper. Thus, making this wallet very risky.

To determine which wallet structure will be the best for you, you need to ask yourself a few questions.
 What will I be using it for?
 How frequently will it be used?
 Am I interested in only one currency or different currencies?
 Where would I like to have access from?

Now have a look at a few recommendations.

1. Bread wallet –

Very beginner friendly and you can only use Bitcoin for this wallet.
You are only able to access it from your desktop.

2. Mycelium Wallet –

This wallet also supports Bitcoin only and is accessible from your phone. You will not be able to gain access from a desktop or the web. This option is not suitable for beginners.

3. Jax Mobile Wallet –

You can hold more than one currency in this wallet. It has a very user-friendly interface and is accessible across all platforms.

4. Trezor –

This option is a hardware wallet and is recommended for storing large amounts of bitcoin. It has very good security features, as it is stored in the cold storage device. It has a very open interface and suitable for beginners.

5. Nano Ledger –

Also a hardware wallet and suitable for multi-currencies. It has an easy onboard process and fairly inexpensive.

With all this information provided, you will be able to make an informed decision. Always remember to back up your data and keep your information safe.

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