If you have been investing in cryptocurrencies for a while now, you must be aware of crypto wallets. Just like physical currencies are stored in wallets. Digital currencies will also have to be stored somewhere where they can be stored securely. This is exactly where crypto wallets come into action. So, let us look at what these crypto wallets are all about and how you can use them to secure your cryptocurrencies.
What Is a Cryptocurrency Wallet?
A cryptocurrency wallet is a type of platform that is either software or an application meant for storing cryptocurrencies. The wallet will allow you to store, send, and receive different types of cryptocurrencies safely and quickly. Some of these wallets come with really advanced features using which you will be able to carry out all your transactions safely and reliably. These wallets let you store your cryptocurrencies in various networks, while others have highly advanced security features. You also need a Crypto Wallet Passphrase to secure your wallet.
What Are Hot Wallets And Cold Wallets?
Before we know more about cryptocurrency wallets, you need to be aware of the hot and cold wallets.
Hot Wallets: Hot wallets are internet-enabled devices. These devices are extremely easy to access as they are on the Internet. However, they are more vulnerable to different types of security risks. When it comes to hot wallets, you always recommend that you store small amounts of assets only that you can quickly access for exchange and transactions.
Cold Wallets: Cold wallets are the wallet where cryptocurrencies can be stored in offline mode. So, you will only be able to accept it physically by having control over that offline device. However, these wallets provide you with additional levels of security. Cold wallets are used by those people who have huge coins in their accounts. They can be used to lock the funds for a long time safely.
What Are The Private And Public Keys?
You need to know about the private and public keys for cryptocurrency wallets. These keys are meant for securing digital wallets. You will be able to gain access to your cryptocurrencies by using public and private keys. For example, if you want someone to access your digital currencies through a wallet, they will have to take authority over the points through your public.
To receive coins, you will have to provide your public key. A public key is compared to an account number that can be shared with anyone. However, the private keys should always be kept private. They are just like the pin code of your ATM card. By using the private keys, you will be able to gain access to your funds that lie over a blockchain. So, the private keys should not be shared with anyone.
And this is what crypto wallets are all about. You also need a Crypto Wallet Password to ensure that the wallet is safe at all times.