Is Cryptocurrency Overcoming Traditional Currency?
Cryptocurrency: The Future Money!
So, firstly what comes to your mind when you hear the word wallet? Generally, when we hear the word wallet we think of a pocket or a purse used to stash money, identity proofs, etc. But what about Cryptocurrency wallet? So, let us know what cryptocurrency really is.
What really Cryptocurrency Wallet is?
The cash we use daily exists in physical form and can be stored at a specific location, but this is not possible in case of cryptocurrencies. So, to deal with cryptocurrencies we require a cryptocurrency wallet.
Cryptocurrency wallet enables us to store public and private keys, interact with the blockchain, monitor balances, send and receive cryptocurrencies. Can you believe in today’s date, there are more than 1400 cryptocurrencies! But many of us are still in dark about how Cryptocurrency works. Therefore, we will also explain how it works to you.
Working of Cryptocurrency Wallet?
To understand the working of a cryptocurrency wallet, you can consider the example of a traditional banking application. We can say that blockchain performs the same task as that of the bank, the public key is analogous to bank account number, cryptocurrency wallet provides the same services as your banking application and relates the private key with your login credentials.
Here the record of transactions to and from your public key(address) is maintained by blockchain in the same manner, as your bank keeps track of all transactions to and from your account. Banking application enables you to send and receive money and check balances. Similarly, the cryptocurrency wallet enables you to send and receive cryptos and check balances. The private key serves as the same purpose in cryptocurrency wallet as that served by username and password in a banking application. The private key allows you to receive cryptos because the public key can only be used to transfer funds but not to receive funds.
The different types of Cryptocurrency Wallets-
A variety of wallets are available for you to choose from. Some of the wallets store information online are termed as hot wallets, while others store information offline and are called as cold wallets. On the basis of this wallets are differentiated as follows-
Desktop wallet– If you choose a desktop wallet, then just download and install it on your PC so that it can be accessed from the installation device. This wallet might result in loss of cryptos if your PC is damaged, hacked or affected by the virus. Atomic Wallet, Exodus are few of the desktop wallets.
Online Software wallet– Online software wallets require an internet connection so that the number of devices can access them. However, you must be aware of the possibilities of theft and utmost attention needs to be given to the security provisions
Mobile apps– To use mobile application wallets, you just need to install an application on your phone and create an account. But make sure that your phone does not get damaged, otherwise you might lose your fund. Wallets such as Mycelium, Electrum etc are some of the known mobile wallets.
Paper wallet – You can send and receive cryptos by using Paper wallets too. For this, copy your public key and private key on the paper. And you can convert it to a QR code that can be scanned whenever you require
Hardware wallets– Hardware wallets are among the safest wallets as they store information offline in any physical device. Ledger Nano X wallet, Ledger Nano S wallet, Trezor One wallet are some of the hardware wallets.
Hope this blog helped you understand the basics about Cryptocurrency wallet and was quite useful for you.