Digital Currency Wallet
Digital currency wallet is a software that interacts with different blockchains and is responsible for storing private and public keys. In the digital currency space, we are faced with various wallets that we can choose from depending on our needs. If we intend to enter the digital currency market, we should first of all look for a safe wallet to store our assets. Of course, it is not without grace to say that each person can have several wallets.
Before explaining the digital wallet, it is better to understand the concept of digital currency. Digital currency is a monetary unit that, despite being money, cannot be seen and used physically. The formation of these currencies is through zero and one codes, and they can be accessed through the Internet. Using these currencies, we can make our payments in the international space instantaneously.
The Nature and Functionality of the Digital Currency Wallet
This wallet, is like a safe to protect our property and capital. We have digital currency wallets in 3 formats: software, hardware and paper. All these three formats have the ability to view cryptocurrency assets separately. We can also see the history of all our transactions in this wallet.
Other things that can be stored in this model of wallets include public and private keys. These keys will be used to receive or send digital currency for users. The private key can be considered as a bank card password and the public key as an account number.
Types of Digital Currency Wallets
As mentioned earlier, the use of one type of wallet depends on the needs and choices of users. The level of security, access conditions, support, features and capabilities like these are factors that distinguish wallets from each other.
1. Warm Wallet or Software
Warm wallets can be installed on personal computers and mobile phones of users. An important feature of these wallets is the ability to store user information online. Due to its online feature, this storage can overshadow the security of the system and expose the system to the risk of cyber attacks. For this reason, it is necessary to do sufficient and necessary research in relation to the company that made it when choosing a software wallet. This wallet itself includes 3 different samples:
1.1. Desktop Wallet
These wallets are installed on personal computers and their use is therefore easier and simpler for users. Of course, it should be noted that the ability to install on mobile phones is also provided for users of this type of wallet. The important point in this regard is that it is possible to hack the device and access the wallet remotely.
One of the reasons for the popularity of this wallet among users is its simple and easy access. Desktop wallets have a simple and user-friendly interface. This feature makes this wallet easy to use even for beginners. In addition, it is possible for users to have complete control over their digital currencies through public and private keys.
1.2. Mobile Wallet
It is very similar to the desktop model bag; Because it is installed directly on people’s mobile phones. This wallet allows users to store digital currencies on their mobile phones. In this way, in addition to easy storage of digital currencies, these currencies can be used in daily payments that support cryptocurrencies.
1.3. Web Wallet
This wallet has the lowest level of security. However, it has the highest level of convenience in sending digital currency to others. In this way, we can easily access our wallet through any browser we want. But the noteworthy point in this regard is that the providers of this wallet also monitor and control and access our assets, transfers and wallet information, and will be at greater risk of hacking.
2. Cold Wallet or Hardware
One of the most reliable and secure wallets is the hardware wallet; Because users don’t need online space to store information and only need to connect to the Internet when transferring money. The important thing about this model of wallets is that they are not free; It means that we need to pay to use them.
3. Multi-Signature Wallet
This wallet allows users to sign a document collectively. Typically, the multi-signature algorithm eventually leads to a common signature. Multi-signature will make the cryptocurrency transfer process more secure; Because more than two or more private keys are needed to perform transactions.
4. Exchange Wallet
Most major exchanges around the world provide their users with the possibility of using online wallets. The feature that this wallet provides to customers is buying and selling or transferring cryptocurrencies. In the meantime, some exchanges also provide the possibility of offline asset storage for customers.
Up To Sum
To keep capital in the field of digital currency exchanges, we need to use digital currency wallets. The selection of these wallets depends on the conditions and qualifications of the users. We must have the necessary knowledge in the field of digital wallets to be able to choose the most suitable and safest option.