You’ve probably heard about Bitcoins by now. But have you ever wondered how and where is the best way to store Bitcoins? This is what is known as a cryptocurrency wallet. Only with a wallet can you safely store your cryptocurrencies.
What is a wallet account?
If you have a cryptocurrency wallet account, you have access to your digital wallet. In this case, it is a cryptocurrency wallet. In your crypto wallet, you can manage your cryptocurrency funds. For example, you can buy and sell Bitcoins, Ethereum or Litecoin.
You can see the potential of such cryptocurrencies with the example of Bitcoin. In early 2011, the digital coin was worth about a dollar. In April 2021, Bitcoin reached a value of around $60,000.
In your cryptocurrency wallet, you can make as many transactions as you want. Trading in digital currencies is up to you. Since ISPs don’t charge a fee for cryptocurrencies, they get a percentage of the transaction fees.
How does a cryptocurrency wallet work?
The Bitcoin cryptocurrency has been around since 2009. More and more cryptocurrency wallets have appeared since then. From Coinbase and Exodus to Lumi and the eToro wallet. These are just a few examples of wallets that can be found on the market. In the next few paragraphs, we will explain how these wallets work and how secure they are.
All cryptocurrency wallets are based on different addresses and keys. You can match the address with a bank account number or IBAN. In this case, you will get the address for free, without a bank. You can easily unlock the code of your address. Only by publishing your address will you be able to receive payments. Your login details are kept secret.
The crypto wallet also generates two different keys. On one side, there is a private key and on the other, a public key. Simply put, you can think of the public key as a lock. You send a lock to a person so that they can lock the cryptocurrency. Once the currency is sealed and mailed to you, the private key comes into play. You can then unlock the lock using this code to receive the currency. The currency does not come to you physically, but stays in, what is known as a blockchain.
When choosing a cryptocurrency wallet, pay attention not only to usability but also to aspects such as customer service and security. According to various reviews of online cryptocurrencies, the most important factor is the security of your currencies. Therefore, many users do not choose just any wallet for their currencies, they try to use the safest cryptocurrency wallet that is available.
How do I create a crypto-purse or crypto-wallet account?
To use a wallet, you must first open a crypto wallet account. You can do this with any type of wallet you choose. You cannot buy or sell cryptocurrencies without a wallet. It is very easy to create an account or sign up for most online wallets. All you have to do is enter your name, email address and a secure password.
Once you have registered, you will be given twelve backup words to remember. Some users save these words on their computer or laptop. Others save them to their smartphone. It is probably safest to write down the 12 words on a separate piece of paper. You can download ready-made PDF files for this, in which you can write down the words.
You should also save this piece of paper in a safe place that no one knows but you. With these backup words you will be able to recover your wallet in case your PC, laptop or smartphone crashes.
Crypto wallets are no longer just for Bitcoins.
Can I switch wallets?
When you register with a crypto wallet provider and download the software or app, you will be asked if you want to create a new crypto wallet or import an existing wallet. Thanks to the import feature, you can always register with a new provider. This way, you are not tied to a single crypto wallet.
How secure is a cryptocurrency wallet?
According to popular online cryptocurrency wallet tests, different cryptocurrencies have different levels of security. Security always depends on the type of cryptocurrency wallet. Since most wallets are software-based and run, so to speak, in the cloud, there is always the risk that hackers can gain access to your wallet or that a system crashes.
Hardware-based crypto wallets, on the other hand, offer a very high level of security. It does not matter if the crypto wallet is “made” in Germany or “made” in the USA. As long as it is from a reliable company, you shouldn’t have any problems.
What types of wallets exist according to popular online cryptocurrency wallet reviews?
According to popular online cryptocurrency wallet reviews, there are different types of wallets. However, the functions of most of them are the same. It doesn’t matter if you have a mobile wallet or a crypto wallet on your iPhone as an app, whether you use a browser-based wallet on your laptop or if you use a USB crypto wallet, i.e. hardware. There are many different crypto wallet providers. So you have a wide range of wallets to look at.
What is the difference between different wallets?
The advantage of cryptocurrency wallet apps is that they are particularly easy and accessible at any time. Since you usually carry your smartphone with you during the day, you can also make transactions on the go. Online cryptocurrency wallets, which you can use on your laptop and computer, have similar advantages. You can open it directly in your browser.
The safest cryptocurrency wallets are definitely offline cryptocurrency wallets. They are also called paper wallets because you write your codes, addresses and keys on a piece of paper and, therefore, cannot be compromised by network errors.
Hardware wallets offer a combination of online and offline. They basically work like a USB stick. It remains unplugged until it is connected to a laptop or PC. Only then are you online with your wallet. Unlike other wallets, this crypto wallet needs to be purchased in advance.
Which cryptocurrency wallet is better?
According to various online cryptocurrency wallet tests, the winner of the cryptocurrency wallet test was etoro.com. For many users, it is the best crypto wallet because, among other things, it offers various payment options. For example, you can pay with PayPal and Skrill, which most other providers do not support yet.