Cryptocurrency Wallet: What is a Cryptocurrency Wallet? How to make your own Wallet? Read

  Cryptocurrency Wallet: You can store your crypto assets in a crypto wallet. (symbolic picture)

A crypto wallet is a medium to store cryptocurrency. In this, your cryptocurrencies are protected through private keys and you can store them in many ways, these are called wallets. As a crypto investor it is not necessary that you do cryptocurrency mining, you can buy and sell coins on the exchange. Apart from this, you can buy and sell it directly with other investors through peer-to-peer network. After doing this, you also transfer the 'keys' of the coins for access. We are telling you how it all works.

What are Private and Public Keys?

If we are talking about crypto wallets then it is important to understand what are private and public keys. Cryptocurrencies work on the blockchain encryption technology and in this technique combination of some keys is used. Public keys are used to identify those tokens and private keys are used to access them. Let us understand this in more simple words.

Take for example a payment app. Your payment app is your username from which you receive money in your account. The public key does the same thing in a crypto wallet, you receive tokens through it. In the same way you have a password in the payment app, with which you do transactions or check balances, in crypto wallets this work is done by private keys.

What exactly is a cryptocurrency wallet?

A virtual currency wallet or crypto wallet is a software or app that you can download to your mobile device. On this you can store your crypto assets. Not only that, you can use this wallet for cryptocurrency transactions. The crypto wallet has a password, so that your crypto assets are protected.

Cryptocurrency Wallet: You can store your crypto assets in a crypto wallet. (symbolic picture)

 

 

A crypto wallet is a medium to store cryptocurrency. In this, your cryptocurrencies are protected through private keys and you can store them in many ways, these are called wallets. As a crypto investor it is not necessary that you do cryptocurrency mining, you can buy and sell coins on the exchange. Apart from this, you can buy and sell it directly with other investors through peer-to-peer network. After doing this, you also transfer the 'keys' of the coins for access. We are telling you how it all works.

What are Private and Public Keys?

If we are talking about crypto wallets then it is important to understand what are private and public keys. Cryptocurrencies work on the blockchain encryption technology and in this technique combination of some keys is used. Public keys are used to identify those tokens and private keys are used to access them. Let us understand this in more simple words.

Take for example a payment app. Your payment app is your username from which you receive money in your account. The public key does the same thing in a crypto wallet, you receive tokens through it. In the same way you have a password in the payment app, with which you do transactions or check balances, in crypto wallets this work is done by private keys.

What exactly is a cryptocurrency wallet?

A virtual currency wallet or crypto wallet is a software or app that you can download to your mobile device. On this you can store your crypto assets. Not only that, you can use this wallet for cryptocurrency transactions. The crypto wallet has a password, so that your crypto assets are protected. 


Hot and cold crypto wallets or what?

Hot wallets are online on the Internet, which you can easily access and buy and sell cryptocurrencies from here. However, there is some concern about its security, because being active online, there is little fear of hacking on it. But investors doing active trading always keep some funds in the transaction in their hot wallet.

At the same time, cold wallets are offline. You don't have to keep your data in the cloud, you can keep your assets safe on a USB device or hard drive. But there is a problem in this that if there is any problem in the wallet and you are not able to access your keys, then your coins will be lost forever i.e. your wallet and currency are lost. It has happened to many in the last few years that they lost their USB drive, their hard drive got corrupted and coins disappeared forever, so you have to think about the pros and cons of both these wallets first.

And then come paper wallets, they are colder than cold wallets. In this, private keys are written on paper. Hacking in it is impossible. But then again the same thing, there are a thousand ways for the code written on paper to be damaged or lost. Or maybe you made a mistake while copying the code, after which your paper wallet will become useless, so whatever you have to do with your money, be sure to understand the risk first.

Store on exchange

You can also store your crypto assets on cryptocurrency exchanges, but an exchange is not a very secure place to store your coins. According to a report, an exchange loses an average of $ 2.7 million every day, or more than 200 million, and this figure will increase further.

If you trade with a reputed exchange, you will not face as much security issue. On the other hand, from the point of view of security, it would be better to keep your assets spread out in different places.



How to create your own crypto wallet

You will find many digital wallets online. There are many exchanges that run their own wallets. The two most popular wallets are Exodus and Mycelium. Setting up and using these apps is similar to using any online service. You download the app, login with your details and then transfer your cryptocurrency to this wallet by following the on-screen instructions.