A Guide to Cryptocurrency Wallets

As Bitcoin and other cryptocurrencies expand, hackers see new potential for thefts. How do you keep your digital investments safe?

  • Hot. Keeping money hot is the same as carrying banknotes and coins in your pocket. Cryptocurrency in such wallets will always be at hand in access from any device. It is good for quick sending to the exchanges or other people, but bad in terms of security, because the data, including the private key, are stored on remote servers.

Desktop Bitcoin wallets

Wallets for PC are designed to be installed on a computer. At the moment, such wallets are considered as one of the most secure. The PC wallet owner can control the level of protection and manage his bitcoins himself without any intermediaries. Basically, this method of storage is preferred by advanced users and people who want to store large amounts of bitcoins for a long time.

Mobile Bitcoin wallets

Mobile wallet is a special application for smartphones. The main feature of such applications is that only part of the blockchain is loaded on the device. And the rest of the information is received from trusted services, which can affect the security of this method of storing bitcoins. For this reason, it is not recommended to store large amounts of money on such platforms.

Online wallets

The easiest way to store bitcoins is to create an online wallet. There are many services on the Internet that allow you to create such a wallet. The most popular are:

  • Circle;
  • Blockchain;
  • Xapo.

Hardware wallets

A hardware wallet is a special device for storing private keys in electronic form. All transactions can be performed only through it.

  • Ledger Nano S;
  • KeepKey.

Paper wallets

A paper wallet is a document containing two generated QR codes. One of these codes is a private key that can be used to spend bitcoins. And the second one is a public key, used to get coins.

How to increase anonymity when using Bitcoin wallet

Bitcoin wallets are not completely anonymous. Almost all data, including public keys and transaction amounts, are publicly available. Although the use of cryptocurrency does not require binding to personal data and the transactions published do not show who exactly the transaction was between, the Bitcoin wallets address and the identity of its owner can be associated if desired.

  • Creating a new address for each new transaction;
  • Using special bitcoin mixers that distribute bitcoins between hundreds of wallets and return the amount to the owner, thus confusing transaction traces.

How to protect Bitcoin wallet

Like a normal wallet, a Bitcoin wallet also needs protection. And given that this currency is electronic and is used primarily in the network, and attention to such money requires more. To ensure the safety of your savings, it is recommended to follow some rules.

Wallet encryption

It is the first thing you have to take care of. Encryption involves setting a strong password. But you should understand that a password will not protect you if your device is infected with viruses. That’s why it is recommended to use additional methods of protection.

Multiple signatures

Multi-signature is an excellent additional security feature. This method implies that a transaction is executed if it is signed by several users at once. This method can be successfully implemented between family members, business partners or even one client if they sign a transaction from a second device.

Other ways

These may include backups to help restore your wallet in the event of loss or damage to your device. Also, you can choose not to store large amounts of money in one wallet. It is better to leave small sums for usual expenses on the account of your purse for the personal computer, smartphone or on a server, and the basic sum to store in offline purses. Lack of connection to the Internet will protect your savings from scammers and malware.



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Andrey Costello

Bitcoin-maximalist. Optimistic family man and miner with six years of age. I write about complicated things from the future for people of our days.