Crypto glossary #1: Crypto wallet

Our rewarding system is here, and to make it as simple as possible for our community to participate, we’re releasing a 3-part basic introduction to the crypto world. We’ll teach you all about crypto wallets, the way you can create and use one, transaction fees and different types of exchanges.

Let’s dive right into it.

What is a cryptocurrency wallet?

A cryptocurrency wallet, also known as crypto or digital wallet, is basically a software program which stores public and private keys. It enables users to interact with various blockchains, send and receive digital currency and monitor their balance. If you want to store our VIB token or any other cryptocurrency, you will need to have a digital wallet.

What are the different types of cryptocurrency wallets?

There are many different types of digital wallets, and they all provide ways to store and access your digital currency. They can be broken down into 3 main categories: software, hardware and paper wallets.

Software wallets run on desktops, mobile platforms or online, in a cloud.

· Desktop wallets are installed on your PCs or laptops. They can only be accessed from the computer, on which they were installed. Desktop wallets usually provide a high level of security, but can be compromised in case your computer gets infected with malicious software.

· Online wallets run in the cloud. The fact that they can be accessed from any location makes them very convenient, but as your private keys are controlled by a third party, they are vulnerable to hacking attacks.

· Mobile wallets are apps running on your smart phone. They are often very small in size because of the phone memory limitations. Their main advantage is that they can be used in retail stores, where cryptocurrency is accepted.

Hardware wallets are considered one of the most secure wallets. Even though transactions are made online, hardware wallets store private keys offline in a piece of a hardware device, usually a USB key. They are compatible with different cryptocurrencies and support a vast variety of web interfaces. Using one is very straightforward. You connect the wallet to your computer, enter a pin and make the transaction. Afterward, you just unplug it and store it somewhere safe. Good examples of hardware wallets are Trezor and Ledger.

Paper wallets are just that, a piece of paper with your public and private keys printed out on it. It can alternatively mean a piece of software which generates a pair of keys for users to print out. A paper wallet works in conjunction with a software wallet, otherwise users wouldn’t be able to send or receive cryptocurrencies, obviously. If you want to transfer a currency to your paper wallet, you transfer the funds from your software wallet to the public address written on your paper wallet and that’s it. If you want to withdraw the currency from your paper wallet, you first have to transfer it to your software wallet. That can be done by either entering your private keys or scanning the QR code from your paper wallet. The process is also called “sweeping”.

How do i get one?

We recommend using MyEtherWallet because the process of setting it up is very straightforward and it supports Ethereum based (erc20) tokens such as our VIB token.

To generate a new wallet, go to MyEtherWallet (https://www.myetherwallet.com/) and choose a strong password (we recommend at least 15 random characters) on the welcome screen. Click on the “Create New Wallet” button to confirm.

Download your wallet keystore file in the next step. The Wallet’s file name consists of a string of characters, starting with UTC-2017. Save the file in at least 2 different safe locations such as cloud storage or a USB key. After you’ve downloaded the keystore file, click “I understand. Continue.” to proceed.

This page is very important. You will be presented with your Private Key info. The Private Key can unlock your wallet in case you forget your password. It’s the most important information — it’s recommended that you save it to at least 2 to 3 different locations and that you don’t share your Private Key with anyone. It’s like the key to your home — you don’t share it with strangers. Besides storing your Private Key in digital form, you can also print a paper wallet. Just click on the “Print” button and save the printed wallet in a safe and dry location. You can also use a hardware wallet, such as Ledger Nano or Trezor, to keep your Private Keys safe. To proceed click “Next: Save Your Address” button.

To access your wallet you need to first unlock it with the previously stored keystore file and your password. On the unlock screen choose “Keystore File (UTC / JSON),” then select your wallet file and enter your wallet password. If everything is correct, the “Unlock” button will appear.

You can check your wallet balance by clicking the “View Wallet Info” tab. There you’ll see your public account address (used to receive ETH or other tokes, such as VIB), account balance and token balances. Save your public address for later. Treat your public address as you’d treat your traditional bank account number — you can share it with others, so they can send you ETH or any other erc20 tokens.

IMPORTANT: You can share your public address but DON’T share your keystore file or private key.

More tutorials for different wallets are also available here