Secure Crypto Wallets
Unless you have been living under a rock, you know that cryptocurrencies are now a thing. Often hailed for their decentralized nature, they went viral last year. Why? Well, because they let people transfer money between each other quickly and securely. On the top of that, they might make you rich in just a couple of hours. Unfortunately, the opposite is also true. Just as you may generate massive gains thanks to the market volatility you can lose your tokens just as quick.
Experienced traders are familiar with this phenomenon and have learned to see the signs way before others. However, the one thing no one is safe from is hackers’ attacks. Just imagine what a pain it is to see your tokens gone. Not because of volatility but because some unfriendly persons thought it would be cool to steal them from you.
To protect you from thieves, developers have created cryptocurrency wallets that store your coins. Since there are several types of cryptocurrency wallets we’ve decided to outline the basic and most commonly used.
Practically almost every exchange offers wallet services. Think of Coinbase, Binance or Coincheck for example. The single biggest advantage of this type of wallets is that you practically let the exchange take care of your crypto coins. You don’t have to open a separate account, to install a software or to manage private keys. You just buy some tokens and leave them in the wallet provided by the exchange. Despite being super easy to use, online exchange wallets are to most vulnerable to hackers’ attacks. Most recently a total of $700 million were stolen from Bitgrail and Coincheck. Furthermore, sometimes exchanges freeze withdrawals due to technical issues. In other words, think twice before you leave your coins in an online wallet.
Mobile and Desktop Wallets
These types of wallets are usually downloaded and installed on your device, being it a smartphone, tablet or PC. Once you install the software it generates your private keys and your wallet address, which you need when you transfer cryptocurrencies from one place to another. How do they work?
Imagine you buy some coins in an exchange but you don’t want to store them there because you know it is not safe enough. You can easily set up your wallet and transact your holdings from Coinbase let’s say to your wallet. Every time you want to trade your tokens you have to move them from your wallet to the exchange. A little bit complicated, I know. But at the same time much more secure. However, you should be completely sure that the network you use is secure enough when you operate. Otherwise, hacker’s could easily hijack your private keys and boom, your wallet is drained.
Cold (Hardware) Wallets
A cold wallet is any type of wallet that has no internet access. The most prominent example of cold wallets are those hardware wallets that often look like your average USB flash drive. They are relatively simple
to use but they are the most secure way to store your cryptocurrencies. You just plug your hardware wallet in your PC’s USB port transfer your coins and then plug off. As simple as that. Some hardware wallets have several layers of security which include passwords or private keys in case someone steals your wallet. Even if he does so, he would be unable to get your coins because he doesn’t know your credentials. Hardware wallets are hard to compromise because they are stored offline.
And remember, everything that is not connected to the internet is safe from hackers.