Curiosity they say kills the cat. Investors and entrepreneurs would want to know all about cryptocurrency so as to ascertain their mind
before investing their time and money.
Cryptocurrency is considered to be written under false name this is because of its nature of having an open source and public nature of transacting blockchain ledgers, there are few public data that can be used to recall back an investors identity.
For experts in the crypto market, the answer they would give will be that cryptocurrency is a little bit close to anonymous not completely.
In digital currency term, wallet in this context can be simply said to be an "account". Bitcoin wallet is where you store your bitcoin just like you store fiat currency in the bank account.
The word Bitcoin wallet is preferable and not bitcoin account because an investor is the only person that should have access to the bitcoin
stored in their wallet just the other fiat currencies you put in the bank account and the bank has access to your money.
We have different types of wallets an investor can use including online, offline, mobile, hardware, desktop, and paper.
Each wallet type identify to what type of medium the wallet is stored on and whether the data is stored online or not. Some wallets proposes more than one method of accessing the wallet depending on the type of currency.
The term "hot wallet" describes a wallet connected to the internet or that is online. It can be accessed from anywhere in the world and from any internet enabled devices.
- Desktop Wallet - One of the hot wallet category. This is the most common type of wallet. This wallet application is one that connects directly to a client's coin. Desktop are wallet application downloaded and installed on personal computer or laptop and it's ready and easy to use.
- Mobile Wallet - Mobile wallet is under the classification of Hot wallet. This type of wallet is simple and easy to use. It is a wallet that comes as an application installed on the mobile phones example; Android, BlackBerry and IOS.
- Online Wallet - The term online explains it, An online wallet is a web-based wallet. The data rather than been downloaded is based
on a virtual buyer server.
Some online wallets are made up of two wallets allowing coding of private data to prevent unauthorized access before being sent to the online server.
Some wallets let you control your private keys, some are protective that is you don't have access to control your keys directly. Online wallet is very popular.
Its advantage is that it can be accessed from location anywhere and from any web browser on enabled internet devices.
- Hardware Wallet - Hardware wallet is a dedicated hardware that is specifically built to hold cryptocurrency and keep it safe
This includes the Universal Serial Bus (USB) devices. These devices can go online to make transactions and get data and then can be taken offline for easy movement and security.
- Paper Wallet - These type of wallet can be used to print out a code for both a public and private key. This allows an investor to
both send and receive digital currency using a paper wallet.
With this option, you can completely avoid storing digital data concerning your currency with the use of a paper wallet.
A full node wallet is a type of wallet that downloads the whole blockchain of a coin. These wallets can take up a lot of space and use a lot
of energy since they need to download the full blockchain and keep it updated.
For examples of full node wallets are Bitcoin, Litecoin and Ethereum. If you don't have a lot of disk space free to commit to running a node, consider one of the other wallet options instead.
If you are using online wallets, be observant of browser extension malfunction otherwise, you may want to use a different browser for your online wallet rather than your daily browsing device.
"Cold wallet" describes a wallet not connected to the internet (for example a hardware wallet unplugged and kept in a safe). It is usually on a device or paper.
A cold wallet is the most reliable and desiable form of bitcoin wallet. A hacker will find it difficult to get in because they have to get hold of your device and password in order to access your cold wallet.
When it is said that cryptocurrency is in a "cold storage" - this means cryptocurrency is being held offline in a memory stick or "cold wallet".
Funds you want to use like cash should be in hot wallets, funds you want to store long term are best held in "cold storage" in an offline wallet.
Hot wallets are considered "hot targets" (i.e., they are targets for hackers). Thus, if you have a "hot wallet", make sure you have as many layers of protection on it as you can (two factor, strong password, all security settings on, etc).
- PAPER WALLET - This is in form of a paper. It contains two things;
- an address made public from the received bitcoin source.
- private key to gain access to bitcoin and spend it. One of its advantage is that it is not prone to attack from hackers since it is offline.
- HARDWARE WALLET - This is one of the safest and convenient type of bitcoin wallet. Hardware wallet comes inform of an access stick.
All you need to do is plug it in your computer to access and send your bitcoin. The hardware wallet does not need to be plugged into a computer to receive bitcoins.
- BRAIN WALLET - This wallet is the type stored in the brain. Bitcoin is not technically stored anywhere. What is stored is your
private key that will enable you to access your bitcoin address so as to receive bitcoin.
In other words, if you can store it off heart these two long stretch of character, you have yourself a brain wallet.