Though it’s been more than a decade since Bitcoin was launched, still the majority of people don’t understand how a cryptocurrency works. This is because many people view it as gambling; you can either earn huge or lose everything in the blink of an eye. In this blog post, we are going to discuss a crypto wallet and how does it work.
Crypto Wallet Stores
A crypto wallet stores private and public keys necessary to perform crypto transactions, and provides a digital signature approving each transaction. You need to keep your private key safe and secure, which allows for you to unlock your cryptocurrency work to spend or trade your cryptocurrency.
Simply put, a crypto wallet doesn’t store or have any cryptocurrencies in it. It just stores the addresses of your digital assets. Users can choose from different wallet types: Online Wallet, Mobile Wallet, Desktop Wallet, Paper Wallet, and Hardware Wallet. Let’s have a look at these wallets below:
Online crypto wallets are accessible via your web browser. Such type of wallets is susceptible to insider hackers, frauds and online scams.
Mobile wallets offer access to your digital assets wherever you’re with your smartphone and provide more features than other wallet types.
A desktop crypto wallet is usually considered more secure than both a mobile wallet and an online wallet. However, this depends on how you take your online security.
Although hardware wallets are less user-friendly than desktop wallets and web wallets, the highest level of security they offer is matchless.
Paper wallets were quite common for cold storage of digital currencies before the advent of hardware wallets. If you want to feel fully secure with your crypto wallet, going with paper wallets is a decent move.