It is like a real-time wallet but for digital assets and cryptocurrencies. Digital wallet Is a software program that stores PRIVATE and PUBLIC KEYS and It interacts with various Blockchain to enable users to send and receive digital currency and monitor their balance.
There are two types of wallet, The HOT and COLD WALLET. The reason why it is important to know these categories is because there are advantage and disadvantage to each type of wallet.
HOT WALLET- It is a wallet that is accessible on any device through the internet. Connecting to the internet has a risk of getting hacked. But it depends on what type of HOT WALLET. There are examples of HOT WALLET; DESKTOP WALLET, MOBILE WALLET, and WEB WALLET
COLD WALLET- It is a wallet that is not required to connect to the internet. The cold wallet can be more secure than a Hot wallet, But still, there are still an advantage and disadvantage for the Cold wallet. There are examples of COLD WALLET; DESKTOP WALLET, HARDWARE WALLETS, and PAPER WALLETS
ADVANTAGE AND DISADVANTAGE OF HOT WALLETS
The most common type of wallet. They are a software program installed on your computer to a coin’s client platform. There is also some offline app desktop wallet that doesn’t need an internet connection. Therefore, Desktop wallet is also a COLD WALLET.
-Very easy to use
-considered secure by using offline desktop wallets.
-Computer and laptop can be by invaded hackers
-Viruses and malware can infect the computer.
-A computer can be severely damaged.
*If any of these disadvantages happen, there is no chance to retrieve your funds.
WEB WALLET / ONLINE WALLET
A wallet accessed through the world wide web anywhere. While they are more convenient to access, online wallets stores private key and public key online, A quite risky method because some online/web wallet is controlled by a third party which makes them more vulnerable to hacking attacks and theft.
-Convenient, and fast with low cost
-Can store different types of cryptocurrencies in just one site
-Can be hacked through a web browser
-No chance to get back funds when hacked.
*Examples of WEB WALLETS: Coinbase wallet, Bitalo web-only wallet, BitGo web and desktop wallet, ETC.
A ⁃Digital wallet that works on an app on a mobile phone. it can be used anywhere in any cryptocurrency transaction
-Practical and very easy to use than other types of cryptocurrency wallet.
-Good to accept payment or send in payment on the go
-easy for QR code scanning
- In case we lose our phones, We might have a chance to recover ownership of our assets.
-Open to malware, Virus, and Keyloggers
-chance of losing authority over our phones by forgetting passwords or losing managing accounts.
*Examples of mobile: wallet HB Wallet, Android Bitcoin Wallet by Coinbase, Android Bitcoin Wallet by Blockchain Luxembourg, etc.
Examples of COLD WALLET are:
-Are offline wallets that allow users to store Private keys, Cryptocurrency on their device, it is like a USB device that has function buttons. It also has a screen where you can see transactions and confirmation to the said person.
-It has a screen. Most secure way to store crypto in long-term
-Strongest security amongst other wallets
-there is a risk that we might lose the device
-can get permanent damage
* Examples for Hardware wallets: KeepKey, Trezor, Ledger Nano S, etc.
- It is a physical copy or printout of your public, private key and QR codes scanned in transactions.
Paper wallet allows you to send and receive digital currency using a paper wallet.
-More secure and Hack proof.
-easy to make
-if printer didn’t work properly
-Could be damaged or lost through time
*Examples for Paper wallets: Generated with resources such as BitAddress.org, LiteAddress.org, etc.
What is a Private key, Public key, and Passphrase?
To be continued
Also, check out this Ethereum Wallet: HB Wallet
This wallet supports users to store Ethers, ERC20 and ERC223 Tokens. We can also receive free airdrops and use other amazing functions! It is Fast, Secure and Easy to use! Get it here for FREE! https://www.hb-wallet.com/download
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