Crypto News US

• Crypto Wallets are used to store public and private keys.
• Different types of wallets offer different levels of Security.

What are Crypto Wallets

Crypto Wallets are just like the regular wallet that you use in your daily life. You store your cards and money in it. Crypto wallets are the same as physical wallets the only difference is that instead of money, you store digital currency in them. Although the basic functioning is the same, crypto wallets are still a lot more complicated than normal hardware wallets. They are also much more secure than normal wallets because they cannot be hacked easily. 

Unlike normal wallets, they are programmes that store your digital assets. These wallets have two main components, which are the Public key and Private key. Let’s Understand them in detail.

Public Keys

This is a key that is visible to everyone, and anyone can use this key to send crypto to you. This is like your PayPal ID. If you want to accept payment from any crypto wallet, then you need to share this key with the person who will send money to your account. These keys are important for initiating any transaction because transactions are not possible without them. 

A Public Key looks like this: 1ASUosE3iD1rfef6Pccw3UVF81t7F9fh7C

These public keys are cryptographic codes, and they are always paired with private keys. Anyone cannot have access to your wallet until they have your private key. Therefore, it is always safe to share your public keys to receive transactions.

Private Keys

These are the most important parts of your wallets because they are used to access them. They should always be kept private because anyone with access to your private and public key will be able to access your wallet and transfer funds from it. Hence, it should always be kept super safe. Therefore, sometimes people also call them secret keys, as they are always kept secret. 

Private keys are long, randomly generated pseudo-random codes. The complexity of a private key is very important because if private keys are more complex, hackers will have a hard time guessing the written code. Therefore, most of the private keys are often long.

Example of a Private Key: L3PT6Qua1xMKg3tpzewX9sY6wBwPXC4LyEUcBan6iVugUnB5391s

Since Private keys are very important, different types of wallets are present in the decentralised ecosystem, which offers different levels of Security. But it is often seen that additional layers of security users need to compromise ease of Use, but you can always choose the wallet that best fits you. Different types of crypto wallets are mentioned below.

Types of Crypto Wallets

Software Wallets

These are the most common types of wallets, which are used by most of the network participants. They are the easiest to use, and if you are a crypto trader, they are the best fit for you. We are talking about wallets such as Coinbase, Kraken, Exodus and Metamask. The benefits that these wallets offer are : 

They are easy to use, They process transactions very quickly, they provide many services like crypto conversion and a 24/7 support system.

The major disadvantage of these wallets is that you must trust the organisation with which you are forming them. They have access to your private key and hence Security is compromised.

Hardware Wallets

These are USB wallets that store public and private keys on a pen drive. You will always be able to access them by injecting your pen drive into your laptop. These USB sticks are very safe, as no one will ever be able to access them when they are not connected to your laptop. Hence, they are very secure and also easy to use. All you need to do is connect the stick to your laptop. But they also come with several disadvantages. If your stick is broken or lost and you have not stored your public and private keys somewhere else, you will have a hard time recovering your wallet or your assets will also be lost forever.

Paper Wallets

These wallets are the safest form of wallet because the public and private keys are stored on paper. Hackers will always have a tough time hacking these types of wallets. They have a QR code on them, and users can access their wallets by scanning the given QR Code. The disadvantage they offer is that a piece of paper can easily get lost, and it is a bit of a process to use them for transactions. So they are best for those who have large funds to transfer but do not trade very often.

Conclusion

Crypto wallets are essential tools for securely storing and managing digital assets. They consist of public and private keys, with public keys used for receiving transactions and private keys for access and security. There are different types of wallets, each offering varying levels of security and convenience. Choose the one that best fits your needs and preferences.