In general, people rely on banks to keep their ornaments, cash, or any form of physical asset safe. It helps in protecting these valuable possessions from theft or fraud. Now, this is the solution only for physical assets that are present in the real world.
So, what about crypto assets? How do we secure them?
One has to safeguard their private keys to protect the cryptocurrencies from hacks or other malicious activities. Crypto wallets are a suitable solution for keeping private keys safe.
Are you wondering what else a crypto wallet can do? Let us find out!
What are crypto wallets?
A crypto wallet is a computer software/mobile application that is similar to real-world wallets. It stores private keys and thus ensures the safety as well as security of cryptocurrencies. These wallets help to send, spend, and buy digital assets in a safe manner.
Crypto wallets store the encryption keys used for digital transactions. It also helps in keeping track of the location address of a particular crypto asset.
Types of crypto wallets
Hot wallets and Cold wallets are the two different classifications of crypto wallets based on their storage type.
Hot wallet consists of
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Web wallets
- They are browser-based wallets that facilitate flexible crypto transfers.
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Mobile wallets
- These are similar to normal mobile apps and they enable instant crypto payments On The Go.
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Desktop wallets
- They run on desktops (installed as software) and can be accessed only when necessary.
Cold wallet consists of
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Paper wallets
- Writing down the private keys on paper and storing them in a secured location.
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Hardware wallet
-They are USB-like devices and they offer the highest security to one’s crypto assets.
Hot Wallet and Cold Wallet - Which is better in security?
Hot wallets are online crypto wallets that store private keys in an online program. It facilitates the transfer of digital currencies from the owner to the end-user. On the contrary, cold wallets are offline crypto wallets that store private keys offline.
The risk of losing your virtual assets is very much lower in cold wallets than in hot wallets. At the same time, hot wallets enable faster transactions in no time.
How to strengthen the security of crypto wallets?
Other than choosing the perfect wallet type for storing crypto, it is equally important to add extra security to the wallet. Using the following techniques, we can toughen the security of crypto wallets.
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Invest in a backup wallet
It is good to use both cold and hot wallets to store cryptocurrency. In simpler words, keep the trading crypto in online wallets and the rest in cold wallets.
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Use a secure internet connection
Do not use any open network or public network while performing transactions. When using an insecure internet connection, the possibility of getting hacked is very high.
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Enable two-factor authentication
It is one of the essential steps to build concrete protection for a crypto wallet. If anyone tries to access the crypto wallet, the owner will receive an authentication alert on mobile. So, no one can easily get access to the wallet without proper authentication.
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Use a reliable password manager
Remembering private keys might be tricky. So, we can store private keys in a trustworthy and reliable password manager. If not, we can also store them offline.
These are a few ways to enhance the security of cryptocurrency wallets. However, there are also other techniques like using VPN to encrypt the transaction details, avoid getting phishing attacks, and more.
Conclusion
Cryptocurrencies have had undeniable growth over the past few years. The greater its growth, the greater the chances of risk. Some people indulge in evil activities to steal others' crypto. It is solely our responsibility to keep our assets safe from such people.
If you want to create a secure crypto wallet, it is more than enough to approach a professional cryptocurrency wallet development company. They will assist you in building a reliable and well-secured crypto wallet to store digital currencies.
