People who have already bought into cryptocurrency have had to learn how to use various types of exchanges and wallets.
It’s one of the real learning curves associated with digital currency. Because this currency truly is digital and can’t actually be possessed in any physical form – or even, in fact, as a file – it is moved, traded, sold, and spent in ways that are in a sense entirely original. And again, if you happen to have cryptocurrency already or you have in the past, you probably understand the basics. But there are plenty of people who don’t have such an understanding just yet, and if you’re in that group, rest assured you’re far from alone.
Thanks to booming popularity (and prices) throughout 2017, cryptocurrency is more popular than ever as a topic of conversation and a resource for financial investment. We’re now discussing the top cryptocurrencies as opposed to focusing solely on bitcoin, and investment strategies and debates about value potential are flying all around the internet. In this exciting environment, a lot of new people are buying into cryptocurrency, or at the very least exploring the idea. For anyone who might be in that camp, we wanted to provide a fresh, brief overview of crypto wallets and how they work.
If you’re unfamiliar with holding cryptocurrency, you’ll need to get used to the idea that there’s no such thing in the traditional sense. As noted, these currencies truly are digital, and rather than coming into your possession via any kind of file, they simply exist online. When you pay for cryptocurrency, you essentially a unique password (a private key) that allows you to access the existing store of your currency at its public address. So, when we talk about crypto wallets, we’re talking about different means of storing digital private keys and public addresses.
Types Of Wallets
While all wallets exist to store the digital information just described, there are hardware and software wallets, and it’s very important to understand the differences, as well as their respective values. A hardware wallet is typically a USB drive-like device that can store your cryptocurrency keys entirely offline, only to be used when you hook it up to a computer, phone, or tablet to conduct a transaction. A software wallet can come in a few different forms (online, on your desktop, or via app), and is basically a program that can store your keys. Software wallets are generally more convenient for transactions and occasionally double as exchanges where you can actually buy and sell cryptocurrency directly. Hardware wallets are often said to be more secure however given their lack of internet connection.
The Best Options
- Ledger Nano S – Possibly the most popular hardware wallet on the market, the Ledger Nano S is compact and modern, very much like a USB and containing a small display screen. It’s difficult to find reviews definitively claiming one hardware wallet to be more secure than others, but the Ledger Nano S is certainly among the top options.
- TREZOR – For a couple years now, TREZOR has been the chief competition with Ledger Nano S for the best hardware wallet. It’s not quite as pretty, and almost resembles a small remote control car key rather than a USB drive. But it certainly gets the job done, and from a performance and security standpoint is every bit the Ledger’s equal.
- KeepKey – KeepKey was launched in 2015 but is proving to be a serious competitor among hardware wallets of late. An August review pointed to a recent price cut as one of the reasons it’s become more competitive. But it’s a little bit different too. This is a somewhat larger device, almost like a small private hard drive for your crypto information. It also supports a wide range of currencies beyond bitcoin.
- Mycelium – Once looked at as something of a more complicated alternative to some other software wallets, Mycelium is now very popular, and relatively straightforward to use. This is a mobile software wallet that can be backed up digitally, and which is made to make sending and receiving bitcoin as easy as possible. It has a very attractive interface as well.
- Coinbase – Probably the most popular wallet among hardware or software alike, Coinbase has been around for years and has gradually expanded to include more services and more currencies. It has its issues now and then, but is ultimately still trusted by a larger base of uses than any of the others mentioned here. Additionally, it doubles as a digital exchange.
- breadwallet – breadwallet was originally just an iPhone option, but has since expanded to Android devices. It’s another mobile wallet, and one designed purely for ease of use. As the world becomes more crypto-literate some other wallets (like Mycelium) have caught up in this regard, but it’s still nice to go back to a program like breadwallet that was made for beginner convenience, yet sacrifices no security.
Get your copy of What is Bitcoin
This e-book on Amazon explains what Bitcoin is, it explains that Bitcoin (BTC) is a virtual currency, digital, not physical, and independent of banks. Useful links and resources for the newbie and advanced Bitcoiner or cryptocurrency enthusiast.
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