Create DALL-E images in Bing AI conversations

What is the best cryptocurrency wallet? 

Certainly, many of us had the idea of ​​entering the field of digital currencies out of curiosity or to invest in them, especially with the steady increase in the value of these currencies in the recent period. But many of the terms and concepts related to the field of digital currencies and their trading seem difficult and strange, especially with the development of this field and the emergence of many tools and currencies in it other than Bitcoin. Perhaps one of the most prominent of these basic concepts and tools in the field of digital currencies is the concept of a “cryptocurrency wallet”, which is indispensable for any cryptocurrency user. What are they, what are their types, and what are the differences between their different types?

What is a cryptocurrency wallet?

It is known that encrypted digital currencies do not have a physical presence on the ground, it is a series of encrypted huge data usually called the “Blockchain network”, and dealing with it is completely electronic, including its exchange, storage, payment transactions, and transfers, and the question here, if you wish In owning digital currencies, or want to receive digital currencies, how is this done? The answer lies in creating a “cryptocurrency wallet” which, contrary to popular belief, is different from a regular money wallet.

These digital wallets do not really hold encrypted digital currencies but rather provide the tools that you will need while interacting with the blockchain network. We will explain later.

So a cryptocurrency wallet in a nutshell is like your email address, inside which you keep all your messages. If I want to send you money in Bitcoin, for example, you must have a cryptocurrency wallet, which is the address where I will send you the amount, which is completely in your control of you.

Cryptocurrency wallets explained

If you search through Google for types of cryptocurrency wallets, you will find a lot of explanations and labels for cryptocurrency wallets, which may cause a kind of confusion, so I will try as much as possible to simplify this matter, as it is not as many explanations imagine, especially for beginners in the field, there is no There is a big difference between the types of digital wallets, most of them perform the same purposes, and the differences in terms of basic characteristics are slight, only the matter is related to the nature of your trading and use of encrypted digital currencies, for each category has a specific type that is most appropriate for it according to the nature of its dealings in the digital currency market.

In general, every trader in the cryptocurrency market necessarily owns a wallet, which consists of a wallet address called a “public key” which is a unique, non-duplicate address that is yours alone, in essence, it is a specific location on the blockchain network to which coins can be sent, and the other is The "private key" through which you can enter your wallet address and perform operations from within it.

You can share your public wallet address with anyone if you want to trade or receive money - units of cryptocurrency (this could put you at risk - we'll talk about this later), and the private key, which is 12 randomly generated words, is key that you should not disclose It is disclosed to anyone and must be kept securely and confidentially.

Cryptocurrency wallets list

First, you need to know that most cryptocurrency exchanges have their own wallets which means that you can trade and store your cryptocurrencies from a single interface. There are many platforms dedicated to cryptocurrencies such as ZenGo, Coinbase, Robinhood Crypto, Gemini, and many more, which are sites that enable you to perform many cryptocurrency operations, such as buying and trading in various currencies and monitoring the exchange rates.

There are many platforms and each platform has advantages and disadvantages, and the most things that distinguish the platforms from each other are the number and types of digital currencies that can be traded through them, the graphical interface and ease of use, and of course, digital security is the basis for evaluating any platform, although today it is difficult to penetrate any platform Cryptocurrency transactions are however not completely impossible.

Sometimes when you create an account via a platform it gives you the option to create a public address for your wallet, from which you can receive sent coins. There are also standalone wallets that are desktop or mobile applications and software, much like chatting and instant messaging applications, as you only connect to the Internet when you are connected to it.

Types of cryptocurrency wallets

As we noted above, hacking cryptocurrency exchanges are rare, but not completely impossible. Once you know your public wallet address, it will still be possible to hack (although difficult) which has made many people think of safer ways to keep their cryptocurrency, where the concept of Hot Wallet and Cold Wallet.

 

For further explanation, you will notice that all types of wallets mentioned above are Internet-connected wallets, hence the name hot wallets, meaning that access to them is available from more than one place and device at any time and is connected to the Internet most of the time, and herein lies its danger that it is vulnerable to penetration. It is known that any data found on the Internet is vulnerable to hacking in some way.

Cryptocurrency wallets review 

Simply, hot wallets are those wallets connected to the Internet, and they are either web interfaces called Web Wallets, in the same way, you browse Facebook, for example through a regular browser, or they are additional programs, which are installed on the computer called Desktop Wallets, or a mobile application called Mobile Wallets In general, these wallets enable you to access your public address and monitor what is inside your wallet by entering your private key online. As such, it is suitable for making everyday transactions and payments if you want to spend your cryptocurrency in the real world.

On the other hand, cold wallets, and we can say that they are those wallets that are not connected to the Internet permanently, which makes them provide the most security. These wallets are external storage devices, in which digital currencies are stored, and they are additional external devices such as a USB flash disk where you need to connect them to a computer to enter the wallet, which gives them high security as they can only be hacked by connecting them to a computer connected to the Internet Otherwise, your cryptocurrency will be less vulnerable to attacks.

Therefore, cold hardware wallets are considered by many to be the most secure wallets, as they can be placed in a special safe, or carried with you wherever you go, and whenever you want to trade or withdraw currencies, you can take them out and connect them to a computer and then perform your financial procedures through it.

Many companies provide cold wallet hardware such as LEDGER, which is rather expensive. The LEDGER NANO X wallet costs about 178 $, and it is used by people who want to hold large amounts of cryptocurrency for a long period, and rarely need access to their wallet.

What about paper wallets?

There is actually another type of way to keep digital currencies with the feature of cold wallets, and it is a traditional and simple way, where you can create your own wallet address, then write or print the public wallet address and the private address, and then save the addresses on a private sheet, without recording the data on any party Connected to the Internet, so the address of your digital wallet is unknown to anyone. However, the use of this method is now considered outdated and unreliable, but some resort to it because of fears of hacking, and it is an effective method (we will discuss this method in detail in another article), but it may also expose you to losing your currencies by losing the paper, for example, or any medium in which the wallet data was recorded.

 

What kind of wallet is the best?

It remains to say that the characteristics of encrypted digital currency wallets, despite their differences, are one, in the end, it enables you to save, receive, withdraw, and send currencies, and you can choose the right type for you according to the nature of your use, preferably those who want to use them permanently and continuously, hot currency wallets are also suitable in case You plan to hold a small amount of cryptocurrency, and those who want to leave a large amount for a long period in the hope of increasing the value of the coins usually prefer cold or hardware-based wallets.