Reliable storage of cryptocurrency is the first thing every user who uses coins should take care of. In this article, we will examine at what are the most reliable methods of storing cryptocurrency, that is, cold and hot wallets. But before we start, we would like to notify you that there are alternatives to how you can improve security.
They go very well with hot cryptocurrency wallets. We’re talking about this Bitcoin blender right now. These are services that allow you to blend cryptocurrency, which completely blends the trail, and allows you to stay as anonymous as possible.
If you are interested in queries like “How much time does Bitcoin mixing process take?” you can easily find answers in the FAQ on the same website.
What is a cryptocurrency wallet?
A cryptocurrency wallet is a special software that allows you to store currency, as well as to perform various operations with it. But it is worth noting that access to cryptocurrency here is through a blockchain, so you need to have special keys to confirm the right to manage funds.
But what are these keys?
These keys are a unique set of characters consisting of letters and numbers. They come in two kinds:
- Public – they can be compared to a checking account in a bank. They are needed to replenish the balance of the wallet and receive payments from other users.
- Private – they can be considered a key to a safe deposit box. They allow you to gain full control over the funds stored in the account.
Cryptocurrency is owned not by the one who has the wallet but by the one who knows the private key. This is a specialized tool designed to interact with records in the blockchain. The cryptocurrency wallet itself can be considered a kind of link between digital assets and their owner.
What is the best cryptocurrency wallet for storing currency?
We have understood the terminology, so now it’s time to answer the question, what is the best wallet to use to store coins and tokens? There are two types of them: hot and cold. Let’s start with the cold ones. A cold wallet is a kind of storage medium that holds the keys for authorization in the system and for digital money transactions.
Such wallets are suitable for the long-term storage of cryptocurrencies. You can keep investments in them for years and wait for the growth of the rate. It will not be possible to make a quick transaction from such a wallet – keep that in mind. By the way, there are several types of cold wallets, the main of which are hardware and paper ones.
The first type is a small device that can always be kept at hand or in a safe. Anonymity can be attributed to the pluses of such a wallet because it does not store personal information about the user. Hot wallets are Bitcoin vaults whose private key is either on the Internet or on devices connected to it.
Various cryptocurrency exchanges allow them. The way this works is that customers are given a hot wallet that is securely protected by the company. Hot wallets are also called applications for computers and smartphones. These wallets are more suitable for short-term storage of cryptocurrency so that they can be easily and freely transferred.
We found out what cryptocurrency wallets are like. It’s up to you to choose which one to use. But we will give you some tips on how you can secure the process of storing coins in these wallets:
- Make sure that the secret phrase to restore the wallet is in a safe place. It will be better if you remember it forever.
- Beware of phishing. This is a type of scam in which scammers get a username and password to a wallet by imitating the site of some popular cryptocurrency service. Never click on unknown links, and don’t give your personal information to anyone.
Which wallet to use for storing cryptocurrency is up to you. Our team uses a variety – some people like hot wallets, and some like cold ones.