In order to explain what this Cryptocurrency Wallet is, it is imperative to know the concept of cryptocurrency. Nowadays with the accelerated evolution of technology and the increasing necessity of secure electronic transactions, the creation of a secure mean of exchange came to work, that is exactly what cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Zcash, Dash, etc. provide, protected transactions and to control the creation of additional units of currency.
Why using a Cryptocurrency Wallet?
Think of them as real wallets where you store your cash with the benefit of being digital. They are used to collect, send and receive digital currencies like Bitcoin, Litecon, Ethereum, etc. Normally these crypto currencies have their own wallets and some others have officially recommended third party wallets. It very is helpful to know what they are and how do they work and that is what you are going to learn with this article.
How do they work?
Well, these wallets do not store the coins, technically speaking, the keep the “keys” to manage your currencies. Those “keys” are special codes, different for every user.
There are two different keys:
- The public key: This allows you only to receive currency directly on your account. As you can infer, this code is the one you provide to other users to collect currency, very different than the private key.
- The private key: This is for your eyes only. It permits to host transactions from your account to other destinations (other accounts). Without it there is no other way to manage your currency, in more simple words, while the public key allows others to transfer a send currencies to your account and for that instance is the one your share, the private key is the one that lets you make transaction and it is because of that it is only for you.
Great tips to keep it secure
- Keep your software up to date: It is well known that updates provide security enhancements in every aspect of technology. Make sure you have the latest edition of your software, not only your mobile but the wallet software and your computer. This will increase the protection significantly and tranquility.
- The more security layers, the better: Having long and complex passwords and protecting every withdrawal with an authentication code is a good start. Other ways to protect your investments are using wallets that have a good reputation and extra layers of protection using two-factor authentication or additional pin code (easy to remember) every time you open your wallet.
- Better to prevent than to regret: When you are working in a digital environment a data a backup is always needed, having your private key in different “cold” or offline storages are excellent ways to keep it secure and away from the hand of hackers and computer failures also it allows to recover your key in case you lost it or got stolen. The reality is, if you choose to use an online wallet there are inherent risks that can’t always be protected against.