Summary of the First Webinar of 2024: Bitcoin
A digital wallet is the safe way to store our digital assets .
Opening a wallet is a necessary action to maintain a high level of security and proper storage of our digital assets .
In this article we will review together the different types of wallets and learn a little about their history up to the rapid development and the included uses .
We will discover the advantages of each of them . We will find out what dangers await us and what we should be careful of .
digital wallet –
Having your own private digital wallet will allow you to send and receive digital currencies such as Bitcoin , Ethereum and other alternative currencies at any given moment and with a direct connection with reduced fees .
Unlike a physical wallet that keeps the cash in the pocket , digital currencies are stored in the blockchain network , and the wallet is an interface that allows access to the coins .
Access to the wallet is through 12 words , which play the role of the ” private key “, and the operation is carried out with the help of the receiving and sending wallet address called the ” public key “.
Both together create a type of asymmetric encryption –
A simple encryption operation that uses two types of keys that mathematically complement each other.
Using this method the public key is used for encryption while the private key is used for decryption and authentication.
This is how encryption and identity verification of people communicating using the encrypted relay method can be diagnosed.
This method is relatively slow but considered very secure – this method is the most common in digital wallets for transferring P2P value .
Now that you understand how everything works, let’s talk a little about the types of wallets that exist and their different uses ,
In the old days , at the beginning of the crypto world, paper wallets were the most popular .
It is a sheet of paper with a QR code printed on it , where all crypto values are stored , and only through it can payments and transfers be made .
Since the private and public key are physically outside the network, this is a factor that significantly improves security and reduces the chance of hacking and fraud .
What’s the catch ? This is an ancient method , which can complicate the accessibility of our coins .
If coffee spilled on the page , or the dog ate the wrong homework , you can say goodbye to your coins.
With the development of the market and the progress of accessibility to the digital space and cryptocurrencies, different types were developed and thus arrived
Hot wallets – Online wallets Hot wallets stay online and allow us easy access to use our funds through an interface that is installed on the desktop of our computer or as an application on the smartphone .
You can also create a synchronization between the wallet on the desktop and the one on your mobile, thus synchronizing them .
Hot wallets allow easier sending , receiving and management of our crypto assets .
The user experience is more convenient than any bank , and credit card interfaces .
This is also the most common way these days , probably because it is the easiest and fastest to open – after all, we are known as lovers of comfort .
As long as we keep the application on our device , it can be transferred from anywhere and to anyone with the click of a button and without the intervention of an intermediary .
put
During the opening of the wallet, make sure that you set an access code that will secure the wallet ( one that is different from the opening code of your screen lock 🙂
You will also have to write the cluster of 12 words that you will receive on 2 copies on a sheet of paper and not in a screenshot. Various wallets already today will not allow screenshots and you ?
Here comes a critical stage for discovering personal responsibility – otherwise , it’s a matter of time until you say to yourself ” how did I not do this before “, from the experience of thousands of customers and passers-by .
The advantage ? Learn from the mistakes of others , here there is no representative from the hotline to restore your password .
There are a wide variety of hot wallets and some perform the backup using different methods , there are some that store in the cloud that is linked to your email with your consent , others that use facial features for backup and some that also connect to more secure wallets .
Exudos – is a highly recommended hot wallet , convenient and accessible to everyone , with a safe and simple user experience that will lead you step by step to your first transactions .
There are different types of crypto holders and as we know the well-known concept Hodler’s are the long-term holders and those who really like to secure and protect their assets and money .
For them, a new type of wallet has also been created that advances rapidly in order to enable a very important element, which is convenience , while at the same time not renouncing the central element – security .
It is important to note – during your journey around the world in the digital space, security will always come at the expense of convenience and accessibility and you will have to find the balance between the two while adjusting to your frequency and use.
Hardware wallets or as they are commonly called cold wallets , are the physical version of a digital wallet .
They look just like a USB device .
Similar to paper wallets , hard wallets store our crypto outside the network ( OffLine ). The hard wallets help investors , traders and long-term holders ( Hodler’s ) to keep a variety of currency types in the personal wallet in a more secure way .
These wallets come with a backup for restoration , if the device is lost or destroyed, access can be restored using 24 words .
In addition , the wallet has an access code as an additional layer of protection .
A little tip : keep the login code separate from the24words.
The only disadvantage of a hard wallet is that it is less accessible than a hot wallet , and makes trading operations difficult .
A hard wallet is the recommended wallet for optimal security .
Please note – it is important to match the type of hard wallet to the nature of use , the frequency , and the supporting interfaces .
Not sure which wallet to choose ?
When a lot of your capital ( it is individual ) is in the digital space you will always want to increase your security .
For example – upon entering a new apartment you will prefer to change the cylinder , later you will feel that almost everything you want is at home, so you will add another lock and some will prefer to tighten security and purchase a safe for their valuable products .
Thus , periodically reassess the security of the assets and the frequency of use .
It is likely that at the beginning of your journey you will not need cold wallets and when the time comes to choose one of these you will make sure that it holds the coins you hold and will not cause you unnecessary splits later on .
Ledger and Trezor are the leading companies for cold wallets and following them various companies came out with similar products in the cold storage methods they allow such as Ellipal or Bitbox .
If you are already familiar with the various niches in the crypto space, you may have already heard about 3 Web and the developments that are coming quickly with new decentralized applications .
In the case of the third generation of the Internet, the accessible use and the fast connection happen with the help of digital wallets and in the case of cold wallets it takes the user back in time a bit , therefore , the updates and the latest products of the hardware wallets already today enable a convenient integration between hardware wallets and 3 Web wallets .
And if the question comes up then …
Browser wallets – WEB3.0
They are wallets that can be accessed as an add-on through the web browser or as an application installed on your device .
They are accessible in browsers ( Chrome , Brave , or Safari ) and allow more direct access to Dapps for decentralized exchanges , for gaming , for NFT platforms , metaverse and digital real estate and for the purchase of coins that have just been launched .
Examples of web wallet 3 : Metamask, Trustwallet, Rainbow and more,the advantage of the browser wallet is that you can trade without going through the KYC process and they can be directly connected with different wallets that we use.
In terms of security, even in browser wallets you will get a backup using 12 words and it is important that you remember to write them down in two copies .
The risks in browser wallets are, among other things, the ease with which hackers can make you give them access to your private key in order to perform actions such as – the permissions when entering the game , launch events and the distribution of ” free ” gifts , various Metaverse areas , purchasing NFTs in pre-sale , receiving coins in a new DROP and more .
It is important to note – there is no case in which we will have to donate the private key of our wallet and it was created with such intention in the first place .
On centralized exchanges – Cex
Don’t let the wallet icon confuse you .
Exchanges like Coinbase, Binance offer a convenient interface with a wallet logo , and may seem like a seemingly private wallet , but in practice it is important that you know that you are depositing your money in the hands of a third party , and giving the sovereignty over your assets .
If you miss one of the fundamental values of the crypto field, you may witness regulatory changes , hacks , and cyber problems of one kind or another .
what are the consequences ?
– As soon as the money is not in your hands , it is exposed to threats of hacking , phishing , and scams .
– You are subject to the rules of that interface .
For example , during August 2021 , Binance decided to change the terms of use .
If until then the use of the platform was anonymous , Binance began requiring its customers to identify themselves ( KYC ) in an advanced procedure to enable the execution of withdrawal processes and various trading operations .
– If the country you are in decided one morning to stop supporting the trading platform you are using , you will have to be very creative to regain ownership of your assets . For example , Turkey decided to temporarily block Binance and thus challenge Turkish traders .
BYOB – be your own bank
Well , have you already convinced yourself that it’s worth keeping the money in your own wallet ?
Crypto wallets like Exodus, Ledger and Trustwallet are a necessary step in establishing our personal interface , and are the only way to ensure our control over our funds , investments and savings .
What is meant by control ?
Even in digital wallets there is confusion between wallets that are Custodial versus Non-Custodial .
Custodial | Non-Custodial |
We are in full control of the balances and funds | The wallet company responsible and having control over the balances and funds |
More secure , since we are the ones who hold and are responsible for the private key ( 12 words ) | Less secure , and the private keys are held by a third party |
The ability to recover is yours alone | The recovery of the keys can be carried out by them in case of loss. |
Examples – Exodus, ZenGo, Trezor, Ledger | Examples – Coinbase wallet Blockchain, freewallet |
How to know which wallet to choose ?
Each investor comes with their own desires and needs , and different goals that we will set together at the beginning of the journey .
Therefore , it is important not to take lightly any recommendation or friend’s opinion , but to adapt the need to our personal conduct .
From time to time we may need different wallets to perform different operations
For example , if you ask Hodler what his favorite wallet is , he will choose the hard wallet .
On the other hand , if you ask a skilled trader , he will tell you that wallet 3 . 0 WEB is the best choice .
The issue of fees can influence your choice , but let’s put that aside for a moment .
In conclusion , it is important to know that part of the introduction of the crypto world is the avoidance of a third party controlling or responsible for our assets .
This can be a disadvantage , but it can be turned into an advantage with the help of raising awareness and security .
If you are thinking about purchasing a wallet , wondering what the most recommended wallet is for you , not sure which application to choose or how to secure the backup of your private keys , we will be happy to assist at every step , together we can adjust the optimal solution for you .
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