A cryptocurrency wallet is a program or device that allows you to store cryptocurrency. Therefore, before investing in cryptocurrencies, you need to have an idea of what you are dealing with and how a cryptocurrency wallet works.
What is a crypto wallet and what types are there? Which wallets are the most popular and reliable?
What is a crypto wallet
A crypto wallet is a key instrument in the circulation of digital currencies. Its main functions are the storage and transfer of coins, i.e. sending and receiving them like exchange of gbp to euro. Also, with the help of a crypto wallet, you can buy goods and services, if such an opportunity is provided in the payment methods of the online store.
Since cryptocurrency is a digital asset, this means that in fact, the cryptocurrency wallet does not contain any funds, instead, all transactions are encrypted using unique keys.
So, when creating a new crypto wallet, each user receives public and private keys. The public key is the address of your storage and is only used to send cryptocurrency. A private key is a kind of password that is used to access and manage your funds.
According to a study by Statista, the number of cryptocurrency wallet users is growing rapidly. In the 4th quarter of 2016, almost 11 million customers trusted their funds to digital technologies, in the 2nd quarter of 2019 this figure exceeded 40 million, and in September 2021 the figure reached 76.6 million. Fall of the market. Agree, not every innovation can boast of such massive popularity.
However, along with the growth in the number of users of crypto wallets, unfortunately, the attention of fraudsters to them is also increasing.
Based on the report of the popular portal CipherTrace, in 2021, in the first two quarters, an amount of coins equivalent to $ 681 million was stolen from cryptocurrency exchanges and from wallets of custodian services. In 2018, this amount was $ 950 million, in 2017 – $ 266 million, and in 2016 it was even less – $ 152 million. Thus, one can see a downward trend in this indicator.
It should also be noted that the United States is the most vulnerable country for fraudulent cryptocurrency transactions for example usd to shib. This market accounts for more than 50% of all attacks. However, regardless of the geography of the users, the published numbers certainly highlight the importance of choosing the right cryptocurrency wallet.
Types of crypto wallets
Trusting personal funds to any storage, each user wants the service to provide him with their reliability and safety. Let’s see what types of crypto wallets exist and how they differ from each other.
There are 5 types of cryptocurrency wallets:
- Hardware.
- Online wallets.
- Mobile.
- Desktop.
- Paper.
Desktop
From desktop wallets, the following can be distinguished:
- Electrum;
- Exodus;
- Bitcoin Core;
- Armory;
- Knots;
- Bither;
- CoinSpace;
- Jaxx.
It should be noted that the official Bitcoin Core wallet has recently supported hardware wallets such as Ledger and Trezor. On May 2, 2019, a new version of the program was released, in which the Hardware Wallet Interface (HWI) was added.
So far, this is all implemented only as a command line and it may be inconvenient for beginners to work with HWI. However, “a start has been made” and the developers will probably automate this native application. The best desktop crypto wallet list includes 3 main: Electrum; Exodus; Bitcoin Core.
