Types of Crypto Wallets Used by Crypto Enthusiasts

Types of Crypto Wallet - Paper, Online, Desktop, Hardware

Now that we know the terms used by crypto wallets users let’s dive to know more about the kinds of crypto wallet and their unique features. In case you missed our last post on terms used by crypto wallet users, here is the link.

If you are new to Crypto wallets and interested to know What are crypto wallets and How crypto wallets work, please check our last post here.

Types of Crypto Wallets

Crypto wallets are mainly categorized based on their storage, combination of public and private keys, accessibility, etc. Here are different types of wallets that are quite popular among crypto enthusiasts –

Paper Wallet

A paper wallet is a cold wallet used to store digital currencies. The process of accessing a paper wallet involves the printing of public and private keys on a sheet of paper. The keys are generated via open source wallet generator available like – BitAddress.org, WalletGenerator.net and BitcoinpaperWallet.com. As experts recommend users generating a paper wallet should unplug their internet and wipe the history after the keys are created to assure security and avoid hacking of your wallet.

Desktop Wallet

Any firm dealing with cryptos or digital currencies would launch his Desktop wallet for the convenience of its customers. Desktop Wallet are installable’s that could be installed on your laptop/desktop. As a desktop/laptop is mostly connected to the internet, you would need extra layers of security measures to protect your wallet like antivirus, firewalls, etc. Some of the leading desktop wallets available in the market are – Electrum and Bitcoin Core.

Mobile Wallet

With a need to access from any time and anywhere, Mobile wallets have gained popularity in the crypto world. The working is similar to the desktop wallet and provides hot storage both for Android and iOS versions. However, before installing a crypto wallet on your phone make get a review on features like Private keys, ease of use, security, back up and most importantly the development community if it’s active or not. Some of the mobile wallet available are – MyCelium, Edge

Online Wallet

The least secured wallet that offers hot storage is Online Wallet as they are always connected to the internet. The private keys are held in your browser and hence prone to DDOS attacks. They could be categorized further to hosted online wallets like Cex.io and coinbase or non-hosted online wallets like Metamask and myetherwallet.

Hardware Wallet

The most secure of the lot that offers cold storage and is a bit technical in terms of usage. As the name suggests, they are the hardware explicitly built to handle public and private keys. You can imagine as a USB drive as your wallet that would go online only when you connect it to a laptop for a transaction, hence secured and in control. Some of the examples of hardware wallets are Ledger Nano S and Trezor.

Did you explore any other crypto wallet? We would love to know about it. Please share your story with us on Twitter [@getnuo].

References

investopedia ; coinsutra; hobowithalaptop; @fastinvest

November 8, 2018

Terms You Should Know When using a Crypto Wallet

Just today I read the news of Turkish Police arresting 11 suspects in an alleged hack of crypto wallet accounts, where victims reported a loss of $80,000. As a cryptocurrency user, it is crucial for you to know the terms commonly used while registering for a crypto wallet, so let’s get started-

If you are new to Crypto wallets and interested to know What are crypto wallets and How crypto wallets work, please check our last post here.

Terms Used in Crypto Wallets

Hot and Cold wallets

The hot and cold wallets or hot and cold storage simply refers to whether the wallet is connected to the internet and available 24*7 or not. So a hot wallet is available online and connected to the internet, whereas cold storage or cold wallet is only available when you want to make any transaction. A quick difference

Feature	Hot Wallet	Cold Wallet
Connected to the Internet	All Time	Only while performing a transaction
Suitable For	Small day to day transactions	Long-term holdings
Mode	Online	Offline
Security	Medium	High

Public and Private Keys

To understand public and private keys lets take an example from a fiat currency world. A user is inclined to make an online funds transfer, he registers with the bank via their app/website, on registering they ask to set up a password this password in encrypted form gets stored on the server. This could be termed as a public key. Now when the user initiates a funds transfer, he is asked to log in again with the set password, and as an extra measure of security, he is either asked for an OTP [One-time password] or biometrics[fingerprint, face or retina scan] this could be termed as a private key in crypto world.

In cryptosphere this private key is of utmost importance for you to move your amount and also needs to be secured as once a hacker knows your private key, he can easily access your wallet.

Multi-Sig and Multi-Currency Wallet

Multi-Sig wallet or Multi Signature wallet usually refers to a wallet that needs inputs from multiple parties to complete a transaction. Just for example a joint savings account that allows money transfer only when all the parties involved agree to it.

On the other hand, usually a crypto wallet is allowed to store only one type of digital currency say a Bitcoin wallet or Litecoin wallet, but some wallets allow users to store multiple currencies in one wallet that is referred as a Multi-currency wallet.

Our next post would talk about types of crypto wallets and their security features. Stay Tuned.

November 6, 2018

What are Crypto Wallets and How Crypto Wallets Work?

Wallets or le porte-monnaie in French and la cartera in Spanish are an essential part of human civilization, while the name and utility remain the same the form has evolved innovatively. Isn’t? Wallets no longer need a pocket or a handbag; they exist on the digital world with an IP address in electronic form storing money and helping in all form of transactions. Commonly known as Mobile wallet or digital wallet are slowly making their way in an individuals life. Another electronic form of wallet that stores digital currency or cryptocurrency is a crypto wallet and today’s post is to know about this tiny piece of storage that plays a crucial role in cryptocurrency owners and traders.

Let’s get started –

What are Crypto Wallets?

Crypto Wallets are the software programs that store the private and public keys of the transactions happening on a blockchain network. So, for example, you bought 10 BTC from your friend A, now your friend A is basically signing off the ownership of 10 BTC to your wallet’s address. Now for you to access that 10 BTC you would need your private key stored in your wallet to match the public key available on the ledger, when your friend signed off from 10 BTC. Once the two keys match, there is credit that happens, and your account balance is increased. These private keys stored in your wallet are long hexadecimal codes, known only to your wallet and you.

The cryptocurrency wallets can store multiple coins or tokens at once, however most of the wallets available in the market support only a limited number of cryptocurrency.

Why You Need a Cryptocurrency Wallet?

If you are traveling from London to New York, would you be able to transact in GBP? Not necessarily unless you get your GBP exchanged to USD. Similarly digital currency or cryptocurrency is another form of currency that does not have a physical state, i.e., notes, coins etc. that you can keep in your pocket, and so to use it in crypto world you need a crypto wallet that could let you exchange your fiat currency to Ethereum or help you in trading bitcoins over an exchange.

How do Crypto Wallets work?

Crypto wallets never store your money unlike physical wallets or mobile wallets available for your fiat currency. They only store public and private keys that could be termed analogous to your pin number for your debit/credit card or bank accounts. Now let’s take a case when you are withdrawing some money from an ATM, you insert your card and pin, and in fact, the pin provided by you matches the one stored in the bank database transaction is successful, and cash is handed over to you. Similar is the case with a crypto wallet, taking the example of you buying a coffee with your crypto wallet. Say 1 BTC is the value of one cup coffee, you send the Bitcoin, i.e., you are sending the VALUE in the form of transaction or putting simply transferring the ownership of 1BTC to the coffee shop owner. Now, this sign off reflects in your crypto wallet and would decrease the account balance, but for the recipient, he has to match his private keys with the public address to which you sent the Bitcoins to, to get an increase in the balance.

This transfer of ownership of private keys provides individuals with total control over the funds associated with equivalent public keys. Hence it is crucial for each individual to keep your private key safe and secured just like you keep your PIN number safe.

Have you used a crypto wallet? How was the experience? Do share your story with us @getnuo our twitter handle.

November 1, 2018

BitGo Crypto Wallet Integrates Digix’s Gold-Backed Cryptocurrency

BitGo’s that attracted players for their patented multi-signature wallet technology is partnering with Digix to bring their DGX gold backed stablecoin. Digix that digitizes physical gold in a secure and trustless manner by backing every DGX by one gram of gold from London Bullion Market Association-approved refiners. The startup is adding compatibility with a gold-backed token whose value is not subject to the wild volatilities of the cryptocurrency world or foreign exchange fluctuations. The integration of Digix also helps deepen liquidity of its ecosystem that currently support 85 cryptocurrencies. This stable-price coin is particularly useful for payments, loans, and anything that requires a more stable store of value.

How Crypto Wallets Play a Vital Role in Crypto Margin Trading

Crypto Wallets are the essential part of crypto margin trading. These crypto wallets are provided by the crypto exchanges are used for trading leveraged short and long positions and for providing margin funding/financing to other traders. The funds are instantly transferred from one wallet to another assisting is a smooth trade. So what else does the crypto wallet help with, the Margin Traders? Let’s explore about Crypto Wallets and their place in Crypto Margin Trading

What are Crypto Wallets and How it works?

A cryptocurrency wallet or Crypto wallets is a software program that stores the public and private keys, interacting with different blockchain to allow individuals to send and receive digital currency and view their balance. If you are keen to use any digital currency, one of the prerequisites is to have a crypto wallet or digital wallet.

The working of cryptocurrency wallet cannot be compared to a physical wallet. The crypto wallets do not store currency, unlike the wallet you carry in your pocket. When an individual sends a digital currency to say ETH, he is actually signing off his ownership from that coin and assigning new ownership address of yours. To access these coins and spend it or use it for crypto trading the private key that is assigned to you should match the public key available for ETH. Once the match is made, the account balance would increase and that for the sender would decrease. There is no real exchange of coins, only a transaction record on the Ethereum blockchain and a change in account balance of the sender and receiver.

Crypto Wallets in Crypto Margin Trading

In the market, many types of crypto wallets available are categorized as Software[subtype – Desktop, mobile and online], Hardware, Paper wallets. Each of them differs in a way they are accessed and utilized.

But the most crucial categorization of wallets for margin traders is Hot wallets and Cold storage. This could be applied to any crypto wallet. Both of the strategies are a measure of tightening the security by exchanges to safeguard funds from hackers. Both cold storage and the hot wallet are security measures put in place by exchange platforms to safeguard user funds from any mishap.

Cold storage wallets are wallets that are offline most of the time and can be accessed only when the user wants to make a transaction, putting away the risk of being hacked. Example of a Cold storage wallet would be Hardware wallet that is accessed via USB drive and can be put on offline mode easily. Crypto Margin Traders could use this Cold storage when making a margin trade. It not only helps the funder/lender but even the trader to put his collateral in a secure way.

Hot Wallets, on the other hand, refer to “liquidity in hand” by exchanges in case there is a sudden request of withdrawals. Just imagine a bank in your neighborhood keeping “cash handy” for withdrawals. Example of hot wallets would be an online wallet or desktop wallet. So for Margin trading in case, a margin call is made, and the borrower is not able to fulfil or top-up his wallet, the exchange would release the collateral from the hot wallet to the lender.

While the experts recommend usage of Cold Storage, hot wallets are still to be used whenever the need arises. Would you like to share your crypto wallet story with us? Please post on to our twitter account

References

Dummies, blockgeeks.

October 25, 2018