27 October 2021
Today, the Cryptocurrency market is on another massive bull run, with the price of Bitcoin hovering above $50,000 and other Cryptocurrencies creating a buzz. So naturally, with the growing price of Bitcoin, new enthusiasts wouldn't want to miss the opportunity of the next spike in the value of Cryptocurrencies. Unfortunately, many of them enter the market without fully understanding all the nuances involved in dealing with Cryptocurrency wallets. Due to this, they fall victim to preying hackers and lose control of their Cryptocurrency savings. In any case, storing your Crypto in a wallet is highly recommended.
Crypto Wallets store your private keys along with the password that gives you access to your Cryptocurrencies. So it's safe and easy to access- allowing you to send and receive Cryptocurrencies like Bitcoin and Ethereum. A Bitcoin wallet is a device, program or service that generates and stores a “master file” containing the digital “credentials” that users will have access to send and receive Cryptocurrency via Blockchain transactions.
In simple words, a Bitcoin wallet is a software program that acts similar to your bank account that stores funds and data is required to access it. A Bitcoin wallet comes with a public key, similar to your account number, and a private key that acts as a password only you have access to. These credentials are used digitally to sign and verify Bitcoin transactions on a public Blockchain. Whereas in a private Cryptographic key, there's a PIN or security code for a bank account that should be kept private.
Also Read: Everything About Bitcoin Wallet & Address!
Importance of Crypto Wallet
A Crypto Wallet does not perform as a normal wallet that holds actual cash and, most importantly, doesn't store up your Crypto. Instead, the Blockchain holds your assets which can only be accessed through your private key. The keys which you hold is to verify that you’re the owner of your digital money and only you are allowed to make any transactions. This is why it's imperative to keep your Crypto in Hardware Wallets or, moreover, use trusted and easy to use wallet providers
A Hardware wallet stores your private keys in a device specially designed for Bitcoin transactions only. Hardware Wallets is in the form of external devices, i.e. USB sticks where your private keys are stored. Hardware Wallets are also resistant to computer viruses and don't allow fund transfers using plain text; in most cases, you'll have to press buttons to verify the transactions. They combine the safety of Cold Wallets and the ease of Hot Wallets.
Also Read: How To Track Bitcoin Transactions?
Why should you use a Hardware Wallet?
Hardware Wallets minimize the risks and are widely considered to provide the most secure storage option for Crypto coins and tokens. As you know Hardware Wallets provides offline storage, your coins, and private keys are stored securely in your wallet and not your PC, so you don’t need to worry about your computer being hacked. The stolen and lost wallets are all PIN protected.
Let's say you lost your wallet and thus don’t have access to your coins- in this case, you’ll need to use your recovery seed to restore your funds. It's a unique passphrase that you can store or write down anywhere in a separate place. Using your Hardware Wallet will be worth it if you plan on storing a large number of Crypto assets for a long period.
Pros of using Hardware Wallets:
- Your Private Keys stored in your Cryptocurrency Wallets are never exposed
- Verification is mandatory in your Hardware Wallets device before the Hardware sends out any Cryptocurrencies.
- In most, Hardware Wallets PIN Authentication is the security measure.
- You have full control over your Private Keys.
- You can make use of your Recovery seeds if your wallet is lost or stolen.
Cons of using Hardware Wallets:
- Damage and Loss may occur, hence it’s important to have your wallet backed up.
- Most of the Hardware Wallets will be higher than your price range and be expensive, a single Hardware Wallets cost ranges from $60 to $200
- You can Buy only one Hardware Wallet
- Hardware Wallet is not as convenient as other Wallets if you want quick access.
- Not all Cryptocurrencies are supported.
Best Hardware Wallets:
1. Ledger Nano S
2. Ledger Nano X
4. Trezor T
If you’re considering HOLDing, the safest way to store your digital currency is with a Hardware Wallet. The initial outlay of $100 or more may be stumbling, but if you value peace of mind, then this upfront investment may be worthwhile.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.