Cryptocurrency Wallet: Currency such as Bitcoin requires a wallet (such as a wallet or bank account) called a wallet for that currency.
Cryptocurrency Wallet includes a Desktop wallet (wallet on PC), a web wallet (wallet on Web), a mobile wallet (wallet on a smartphone), a paper wallet (wallet printed on paper), a hardware wallet (special wallet terminal). There are various types.
To put it simply, a wallet is an account that proves possession of crypto assets. Simply put, it’s a wallet.
Originally, crypto assets must be stored in a wallet and managed at your own risk.
Create your own crypto assets with dozens of digits (depending on the type of crypto assets) of large and small alphanumeric characters (wallet address) in each wallet, and save the crypto assets in that wallet address.
The moment you purchase a crypto asset from an exchange, etc., a wallet address that proves that you are storing your crypto asset is generated (actually, it works to generate the address).
When crypto assets are placed on the exchange, the crypto assets are stored in the wallet managed by the exchange.
The exchange is a hot wallet (which has the weakest security but can respond to requests such as withdrawal support by users relatively quickly) and a cold wallet (a network managed by the exchange). The wallet that is separated from is high in security but slows down to the user’s request), and it is in the state of being managed by two methods similar to the hardware wallet.
By the way, crypto-assets such as coin check and Mount Gox are stolen from hot wallets.
This is a very big problem in operating an exchange, and hackers who are willing to steal have more money to steal from a stock exchange that manages a large number of crypto assets than a private wallet. Big and efficient.
Therefore, it can be understood that it is the most dangerous in terms of security to keep the crypto assets on the exchange as compared to managing and holding the personal web wallet.
There are three types of Cryptocurrency Wallet that are managed individually.
1. A web Cryptocurrency Wallet managed on the network.
- Advantages: You can easily perform balance and deposit/withdrawal work simply by logging in.
- Disadvantage: There is a risk that the currency held will be stolen simply by hacking the ID or login password.Remedy (save private key and manage ID and login password)
2. A desktop wallet or a mobile wallet that installs applications on a PC or mobile phone and temporarily connects them to the network for management.
- Advantages: Since the app is installed on the device, you can usually log in with your ID and password to make deposits and withdrawals. Since the private key and encrypted file are used together, access is restricted to only the person (the device that installed or stores the private key or encrypted file).
- Disadvantage: If you lose your computer or device, you cannot recover.Remedy (Recovery is possible by writing the private key on paper or saving the encrypted file on an external device)
3. A paper wallet or hardware wallet that manages private keys with paper or USB devices.
It can be stored for the purpose of reviving it by using the above wallet together and can be stored for itself and managed by connecting to the application or web wallet only when making deposits and withdrawals or checking balance.
- Advantage: The best security environment because the private key itself is physically managed.
- Disadvantage: There is a troublesome thing that you have to manage by connecting to the above wallet or application each time.Remedy (Awareness of controlling money)
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