How to Choose the Best Cryptocurrency Wallet

September 17

Crypto trading is one of the best ways to make money from this virtual asset. There are different platforms that make this possible. You should use the right platforms for your exchange. Conversion tools are also essential to help you understand the exchange rates. With a tool like BestChange, you can convert satoshi to usd, Bitcoin, and other currencies in the market.

You will also need a wallet to hold or store your virtual currency. Cryptocurrency wallets store the private keys that are required to access the balances registered in an address or public key of the corresponding blockchain and be able to spend them. Currently, there are several types of cryptocurrency wallets that can be categorized using two variables: ease of use and security.

Essential Features of a Cryptocurrency Wallet You Should Look Out For

Control Over Money

Cryptocurrency wallets can allow individual management (only the user owns the private keys), joint management (the owner and the company have private keys), or by a third party (the company owns the keys private) of the money stored in them. Depending on the money management control you opt for, the control and responsibility of the user and the safety of the funds in the wallet decreases or increases.

Validation

You can use crypto wallets to validate the transactions made, full validation (download the complete blockchain, full node), easy validation (only download the block hashes, simple node), or centralized validation (full node of a third party). Based on the type of validation used by the wallet, you must trust or not that a third party will carry out the correct proof of the transactions carried out.

Transparency

Bitcoin and other cryptocurrency wallets can be completely transparent (the application code can be audited and verified by the user), transparent (the code can be audited but cannot be verified by the user), or not at all transparent (the application code is closed, and the application is run remotely). Depending on the degree of transparency, the user will have to trust more or less that the application developer did not add secret or malicious codes that could cause them to lose their funds or be stolen.

Environment

Cryptocurrency wallets can be installed in vulnerable (virus-prone) environments with or without two-step authentication, secure environments (such as cell phones where applications are isolated), and very safe environments (such as physical cryptocurrency wallets. , gadgets ). Given the type of environment used, the user must activate mechanisms such as two-step authentication and put complex passwords on their wallets and devices to avoid the loss or theft of funds.

Privacy

Bitcoin wallets and other cryptocurrencies may or may not reveal information about their users to network nodes (such as the IP address), re-use or not the wallet addresses with each payment, and allow or not the use of the Tor browser to prevent other people or companies from associating transactions with the user’s IP address. Depending on the type of privacy that the wallet provides, the user must be more or less attentive to the information it reveals to the network.

Types of Cryptocurrency Wallets

Security is a determining factor of a good crypto asset wallet. Choosing a secure cryptocurrency wallet will ensure your coins are well protected from hackers. Take your time to evaluate the different wallets available and choose the most secure type. You can do your research or check online reviews that will help you pick out the most secure cryptocurrency wallet. That said, here are common types of cryptocurrency wallets rated according to their level of security and reliability.

Online Wallets or Purses

One notch higher in the pyramid are online bitcoin wallets: websites that allow users to mobilize their money independently, having exclusive control of their private keys and without having to install any software. In this type of purse (and in the next two of the pyramid), an abstraction of the private key is generated in the form of 12 or more words, called a seed or backup, which must be noted by the user on paper or other resistant medium and offline, in order to safeguard your money.

In online wallets, the probability of hacking users’ funds decreases drastically. It is not zero since a hacker could install some malicious code on the website and steal the seeds of the users who access the page. The unavailability of funds continues to be a problem in these cryptocurrency wallets, as they can suffer from temporary drops for various reasons.

Wallet apps

In the penultimate step of the pyramid are portfolio applications: software that can be installed on computers or mobile devices and serve as an interface to view balances in the addresses that the user has and mobilize money in them. They can generate a new seed or use a previously created backup and allow the activation of an extra code or key in the software to mobilize the money.

These applications eliminate the problem of unavailability of money (unless the device is damaged or the software is not nearby) and fully transfer responsibility for security to the user, who must keep his device virus-free, refraining from entering unsafe pages, connecting to free Wi-Fi networks and inserting any unknown peripherals, such as USB sticks or external hard drives, into the system.

Bitcoin Hardware Wallets

At the top of the pyramid are bitcoin hardware wallets, also called cold wallets or hardware wallets: physical devices that house the private key of the associated accounts offline, which allows signing transactions without exposing the seed or private key. These bitcoin wallets are similar to a Pendrive. They are connected by USB to the computer and represent the safest way to protect cryptocurrencies. These devices allow you to send cryptocurrencies even in insecure environments, such as other people’s computers.

The bitcoin hardware wallets are the only ones that generate a direct cost for the user. Their prices vary but can be obtained from $50 and up. Some recognized brands are Trezor, Ledger, KeepKey, and Digital Bitbox.


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