Cryptocurrency is all the rage these days. So much so that many people have found themselves eager to invest in it. But, as many investors will tell you, investing in cryptocurrencies can be risky. After all, cryptocurrency isn’t backed by anything. Instead, its value is based on perceived value. Although cryptocurrency is still making serious waves, many are still wondering whether it’s a good investment, while others wonder if it’s safe to store.
As cryptocurrency markets have exploded more and more people are looking to start investing their money in Bitcoin, Ethereum, and more. However, with cryptocurrencies being so new, many investors don’t know how they should store their cryptocurrency assets. While we recommend investing in cold storage hardware wallets, like Ledger Nano S, there’s still some risk in storing your assets online. But if you are a cryptocurrency investor, you should know a few things.
What Is A Crypto Wallet?
A crypto wallet is a software app or mobile device that stores private keys for your cryptocurrency. The wallet holds your public and private keys, which are strings of numbers that your wallet uses to sign transactions. These keys are used to transfer or store cryptocurrencies securely.
Cryptocurrency wallets perform several functions like storing and holding a private and public key pair. The public key is used to send funds from your wallet, and the private key is used to access your funds. A wallet can also store other types of data that can be used to identify you.
So How Do You Store Crypto in Crypto Wallets?
Quick answer: You need your unique wallet ID to send and store crypto. Don’t share your wallet key!
You may have heard about cryptocurrencies, but you may not know how they work or how to store any cryptocurrencies you own. Crypto wallets are a convenient way to store all of your cryptocurrencies safely. There are several different types of crypto wallets to choose from.
Crypto wallets work like this: Crypto is an acronym for cryptography, which refers to the process of encryption. Cryptography is used to create private, and public keys; these keys reveal information and protect information from being intercepted. When you send crypto, you encrypt it first with the receiver’s public key, and the recipient, in turn, decrypts the crypto with their private key. This encryption/decryption process allows crypto to be sent from one user to another over the internet.
Types of Crypto Wallet
Android phones have built-in cryptocurrency wallets. But, if you want to store large amounts of cryptocurrency, you’ll need to buy a separate hardware wallet. We’ve covered three of the best hardware wallets you can buy, but there are many more out there. Today, we’ll tell you everything you need to know about three types of crypto wallets: paper, online, and hardware.
Cold wallets are not connected to the internet and store your private keys offline. Hardware wallets are physical devices that store private keys and can also be used to receive cryptocurrency funds.
A hot wallet is a type of cryptocurrency wallet that is owned by the user. Hot wallets typically exist on a personal computer, smartphone, or web-based wallet. Most users store their cryptocurrencies on hot wallets to make it easier to manage their coins.
The cloud wallet is a lot like a bank – it provides safe storage for your cryptocurrencies. But instead of keeping your crypto-cash in a vault, it’s on servers that are connected to the internet.
A paper wallet is a paper copy of your private key that you can use offline and without an internet connection.