Cryptocurrency has gained lots of attention and interest in recent times as more persons engage in crypto trading. However, as popular as the term, many people don’t know half of what a cryptocurrency wallet entails. They often get stuck on the basic concept of the wallet being nothing more than a digital version of a real wallet.
In actuality, crypto wallets are not just designed to store cryptocurrencies. Let us go deeper into exploring crypto wallets and all that you should know about them.
What is a Cryptocurrency Wallet?
A cryptocurrency wallet is a software program specifically designed to store private and public keys and allow users to exchange digital currencies with others through interaction with several Blockchain networks.
When a person wants to trade in cryptocurrencies such as Ethereum, Bitcoin, and Stellar (XLM), he/she needs a digital wallet to carry out all processes.
The choice of a crypto wallet to use is one of the most crucial decisions for a person who wants to trade or make investments in crypto.
Several factors are worth considering with regards to choosing a crypto wallet but ease of use and security top the list.
4 Things You Must Know About Cryptocurrency Wallets
Here are some considerations anyone looking to deal with cryptocurrency must note and observe.
1. Types of Cryptocurrency Wallets
Different types of crypto wallets exist for accessing the keys to your digital belongings. Here is a list of these digital crypto wallets.
- Online wallets: They run on the cloud platform and are easily accessible from any location as long as you have an online device. All users’ private keys are stored online with this wallet.
- Desktop wallets: You can download and install these wallets on your laptops or computers. This is a high-security option because you can only access the wallet on the system in which you installed it.
- Mobile wallets: You can also install and run your crypto wallet on your smartphone for easy access. They also consume less space than the desktop wallet and can be utilized anywhere.
2. Security Concerns of Cryptocurrency Wallets
Most users often wonder how secure their digital crypto wallets are on a general scale. However, there are varying degrees to the security of a crypto wallet.
First of all, the type of wallet and the service provider for each wallet determines how secure it is. For instance, online wallets are more vulnerable to malware attacks and security hacks than offline wallets such as paper and hardcopy wallets that are considerably more secure.
3. Usage of Cryptocurrency Wallets for Single or Multiple Currencies
Depending on your preference, you can get whatever currency wallet. If you want to deal with multiple currencies, you can opt for a digital crypto wallet that allows you to make transactions with multiple currencies from the same wallet.
On the other hand, if you plan to use only a single currency in all your transactions, getting a single currency wallet is the best decision for you.
4. What are the Transaction Fees for Crypto Wallets?
Transaction fees are not uniform from one cryptocurrency wallet to the next, so you need to find out the transaction fees associated with the wallet of your choice. However, regardless of what wallet you use, the transaction fee is usually a fraction of the regular bank charge for such transactions. Some specific transactions might also require that you pay a processing fee to the network miner.