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Crypto wallet is a must tool for all cryptocurrency holders. Users need to choose a wallet and keep their cryptos safe in their control.
What is a crypto wallet?
Crypto wallet is a tool which users can save their cryptocurrencies there. The wallet can store your private keys, keeping your cryptocurrency safe and accessible. Users can receive, send cryptocurrencies anytime and anywhere. Usually the wallet is an application which can be installed on your phone, and also there are other types.
Which crypto wallet should you choose?
There are several available crypto wallets: online wallet, hardware wallet, paper wallet.
- Online wallet ( hot wallet): Users can’t have the private keys, instead, the keys are held by the application producer. Like most of online applications, the users are supposed to install the application of a crypto wallet, register an account and create a password. Deposit and withdrawal are the basic functions. Do remember to enable the two-step encryption, such as sms confirmation or google authentication. Coinbase wallet is one of online wallets.
- Hardware wallet ( cold wallet): Private keys are stored in a thumb-drive device that is kept in a safe place and only connected to a computer when you want to use your crypto. The idea is to try to balance security and convenience. Ledger is one of hardware wallets.
- Paper wallet (cold wallet): Private keys are written on a paper or stored in a safe place. This wallet is not using-friendly as finally you have to use it on the internet. Bitcoin Paper Wallet is one of paper wallets.
How to secure your wallet?
When you have cryptocurrencies assets, you have to deposit them into a wallet as we mentioned above. However, sometimes you are also in the risk of loosing your holdings. Let’s see why.
- Reason 1: Hacks happen. This can mostly happen to the online wallets. We can remember the most popular exchange hackings: Mx. Gox (2011), Kucoin (2020), Upbeat (2019), Binance (2019), Bitfinex (2016), Cryptopia (2019), Zaif (2018), Bancor (2018), Coincheck (2018), Coinbene (2019).
- Reason 2: You lost the backup/recovery phrases ( usually 12 words) which can recover your wallets. Some wallets provide backup phrases which you can recover your wallets anytime. For example, you change a new phone or lost the phone, only if you remember the backup phrases, you can recover your wallet depositing the original cryptocurrencies on any device.
- Reason 3: You lost the device or paper. This can happen to the hardware wallets and paper wallets.
- Reason 4: Data breach
We have to remember below tips to secure our wallets:
- Choose reliable and secure platform
- Control your private keys
- Do remember the backup phrases
- Never share private keys or backup phrases
- Keep paper documents in a secure place
If unfortunately, there’s a data breach case happens, 6 suggestions you need to remember:
- Stay clam
- Never share your private keys or recovery phrases
- Strengthen your access security
- Never pay ransom
- Plausible deniability
- Distributed backups
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