Investors and traders alike are excited about crypto assets. But we usually find them in a fix. Where should they store their crypto for easy access and safety? We’re talking about the millions of people who bought cryptos years ago but can’t remember where they stored them. In truly astounding statistics, 20 percent of existing Bitcoins are either lost or stranded in digital wallets and deemed lost forever.
Cryptocurrencies are secure only when you take efforts to keep them secure. Experts advise crypto investors and users to make informed decisions while storing their crypto assets.
What is a crypto wallet?
A crypto wallet is a virtual wallet that helps you
-Send and receive digital currencies securely
-Store your public and private key
-Monitor your balance.
The secret keys are the only way to prove ownership of digital assets in Bitcoins. A private key is a 256-bit number, which can be represented in one of several ways. Here is a private key in hexadecimal – 256 bits in hexadecimal are 32 bytes, or 64 characters in the range 0-9 or A-F.
Why do you need a crypto wallet?
It’s simple. You can’t trade, exchange or manage crypto assets without a wallet.
Difference between a crypto wallet and payment wallet
A crypto wallet is a specialized wallet
-It can hold crypto assets
-BTC, ETH,NFT, tokens which can even be an art
-Support cross border payments
-Transactions are pseudo anonymous
Payments wallet (Paytm,UPI)
-Can hold only one type of asset fiat money (INR)
-Cross Border Payment is difficult (Yet to roll out)
-The government keeps track of transactions
-Personal Information is revealed to the opposite party
Where can you find a crypto wallet?
You can access a crypto wallet in many ways. From crypto exchanges, to hardware wallets and cold wallets, you can store your cryptocurrency in different devices.
Also read: Here’s how much money you would have if you’d invested in Bitcoin in 2010
What are the different types of crypto wallets?
To keep control of your private keys, you can choose to store your crypto on paper wallets, generally referred to as a cold wallet. There are different types of paper wallets such as software generated, digital files and real physical paper wallets. Create multiple copies and store them in different locations.
Software wallets & centralised wallets
Software wallets are an advanced way to store your cryptocurrency. You can easily access them from multiple devices such as desktops and mobile phones. Centralised wallets are also known as exchange wallets. These wallets are on the trading exchange and exchange application. Every cryptocurrency exchange has its own unique wallet system where you can easily store your crypto assets.Advantages of Centralised Wallets
-Provide an easy-to-use interface such as a web or desktop app
-Accessible any time
-Cryptocurrency has a sophisticated environment
-Provides an edge by an extra layer of security, reliability, zero down-time when it comes to transactions and trading
-Every update or upgrade is managed by the exchanges
-Transaction fees are almost negligible
One of the most popular ways of storing cryptocurrencies is through hardware wallets, which are physical devices stored offline that connect to your computer when you want to make a transaction. It is recommended that they be bought from an authorized manufacturer.
How can you protect your crypto assets?
Regardless of why you or your organization wants to enter this field, you must take security seriously.
Experts say you should protect your crypto assets. Here are a few ways.
Securely store your crypto assets
If you are investing a large amount in crypto assets, then it is advised that you keep your assets in wallets where you have access to their private keys
Expand your wallets
Given the increasing frequency and severity of hacking episodes, it makes sense to spread your digital wealth across more than one wallet.
Encrypt secure crypto wallet
Encrypting your wallet is one of the best ways to make sure that no one transfers funds from your wallet without your knowledge.
Keep software updated
Using offline wallets requires that you will always remain watchful about new security upgrades and fixes.
Lastly, investing in cryptocurrencies and storing them is a choice that you will have to make. The crypto industry is huge and you will learn something new every step of the way!