The word “cryptocurrency wallets” has been in the limelight for quite some time. Statistically speaking, about 5 percent of Americans hold bitcoin. Many people have a lot of confusion about the concept of crypto wallets.
Although a fair proportion of people are aware of the typical functions of cryptocurrency wallets, to be on the safe side, here is what you need to know more about crypto wallets.
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- 1 Cryptocurrency Wallets: Things you need to know?
- 1.1 1. The working process of cryptocurrency wallets
- 1.2 2. Various types of cryptocurrency wallets
- 1.3 3. The security of cryptocurrency wallets
- 1.4 4. Transaction fees of the wallets
- 1.5 5. Most desirable features of a cryptocurrency wallet
- 1.6 6. Usage of single-currency and multi-currency use of wallets
Cryptocurrency Wallets: Things you need to know?
1. The working process of cryptocurrency wallets
Cryptocurrency wallets are software programs, aka digital wallets. These unique digital wallets help us to store and monitor private and public keys. Moreover, digital wallets also effectively serve the purpose of the interface between multiple blockchain networks.
For example, if someone wants to share a bitcoin with you, he will require the address of your wallet to operate successfully. Remember, the transaction never occurs in real coins.
2. Various types of cryptocurrency wallets
Understanding cryptocurrency wallets is difficult perhaps because there are multiple types of them. You never know which one is the best cryptocurrency wallet for you until you study them. We are listing them in the following section so that you can cherry-pick any of them according to your feasibility.
- Desktop wallets: As the name reflects, these wallets are downloadable on a personal computer or laptop. This particular type of ‘wallet’ guarantees the highest possible security, given that you ensure virus security.
- Mobile wallets: Again, as the name has it, they are installed on smartphones or mobile phones. People prefer mobile wallets chiefly because they occupy little space compared to desktop wallets.
- Online wallets: Online wallets are known for their high-performance and also be used from any corner of the world. Unlike desktop wallets, online wallets are highly vulnerable to problems like hacking and data theft. These issues exist mainly because a third party controls them.
3. The security of cryptocurrency wallets
The common perception of people regarding the security of cryptocurrency wallets is not an encouraging one. Frankly, if a notorious lad can unearth your private key, then you are in for a lot of hacking attacks.
However, you can also add an extra layer of security to avoid or minimize all such mishaps. For example, crypto wallets allow you mobile-authentication. In that process, a code will be sent to your mobile and only after confirming that code you will access to your mobile.
There are other methods in place to enhance the security level. However, safety will have much to do with the type of wallet you select.
4. Transaction fees of the wallets
Generally speaking, the transaction fees of crypto wallets are almost non-existent compared the standard bank fees. So much so, some transactions don’t require any amount of payments at all. Transaction fees also depend upon the type of wallet as well.
5. Most desirable features of a cryptocurrency wallet
There are so many things embedded in every cryptocurrency wallet. So the burning question is, what should be a standout factor you should look in a portfolio? Well, the first thing you need to contemplate while picking a crypto wallet is that whether or not it supports the currency you want to use.
6. Usage of single-currency and multi-currency use of wallets
If you want to do the transaction in multiple currencies that does not necessarily entitle you to utilize more than one cryptocurrency wallet. You can make your life a lot easier by using only one digital wallet which deals with multiple currencies at the same time.
We hope that all your doubts regarding this complex topic have now been addressed. Before entering the world of cryptocurrency wallets, thoroughly study these points and you shall sail through all the process without any hiccup whatsoever.
Featured image source: Freepik
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