One of the most talked-about subjects on the internet is bitcoins or cryptocurrencies, in general, the best way to manage your funds, both to receive payments or make them, is through wallets. See below, how to create a bitcoin wallet, and what are the types and characteristics of each one. It is software used on different platforms that organize and store the user’s private keys, it is access to the wallet.
Types of wallets
The most important thing is to have access to the portfolios of reliable companies and ensure that they were purchased on the producer’s official website. Going through this, there are two distinct types of wallets, hot and cold.
The cold ones are the safest way to use, without a doubt, as they are stored on pen drives or offline devices. They can be used on computers and cell phones without internet access.
Hot wallets directly access the internet, usually mobile apps or software to use on your computer. They can run through the cloud and although they are less secure due to network access, layers of protection can be added to them.
It’s the most convenient way to store private keys, especially for beginners — all in the palm of your hand. Another advantage is that there are applications that support different cryptocurrencies, in addition to providing additional layers of security.
Repeating the above information, it is important to verify the origin of the application and avoid malicious clones that seek to deceive inattentive users. Make sure you only download it from the official store. After installation, open the app, create your new wallet, or redeem one of your own using the corresponding private key.
- Exodus Mobile ( Android and iOS);
- Edge App (Android and iOS);
Hardware wallet (cold wallet, flash drives and offline devices)
Electronic devices store private keys offline, away from the internet. The connection is made via Bluetooth or cable/ USB plug when it is necessary to authorize transactions but without a direct connection to the internet.
Some models also allow private key storage ( seed ) for different cryptocurrencies. You must carefully research the differentials of each model, in addition to ensuring the origin of an authorized dealer — safety is everything.
desktop or notebook
Look like apps for smartphones, wallets for desktops and notebooks consist of software that will automatically manage private keys. The most used are able to manage several cryptocurrencies, facilitating storage through a single password.
It is important to verify the origin of the software, as a corrupted file can lead to losses for the user. Be sure to download from each vendor’s website — third and final notice. Install and create your new wallet, or redeem one you own using your existing private key.
- Atomic Wallet;
Online or Cloud
Same functioning as apps and desktop software, but without the need to install anything. Many opt for this version, but it is necessary to trust the company a lot since it is not possible to audit the source code.
WRITE IT DOWN ON PAPER!
Before deciding which type of wallet to create, remember that when you create your new one, you will receive a master private key, which can be 12 to 24 words or an entire sentence in English — it can also be up to 72 numeric digits. Write this down on paper and keep it in a safe place, the order of the words or digits must be the same.
In case the cell phone is stolen or the computer is formatted, it is through this private key that the user can recover his wallet, reinstalling the software on the computer or the app on the cell phone. Without that, “Blau-Blau” cryptocurrencies, all is lost.
How does the wallet work?
The bitcoin wallet stores the private keys of cryptocurrencies, which can be distributed at different addresses on the network — enhancing privacy and security.
Private keys ( seed ) can generate millions of public addresses to receive bitcoins, similar to a bank checking account. This guarantees more privacy, as this way there is no single address with the entire balance of the user.
Holds different currencies
It is possible to store and manage different cryptocurrencies within the same wallet, but it is important to remember that each cryptocurrency has its specific blockchain, so they are different private keys.
Read: 10 best password manager applications
However, it can be said that a bitcoin address will only receive BTC submissions, while the address generated by the litecoin wallet will only receive LTC. These addresses, despite being composed of a sequence of letters and numbers, are different for each network. You cannot receive a cryptocurrency other than the corresponding address.
Advantages of the virtual wallet
Storing private keys in a virtual wallet ( wallet ) gains the benefit of mobility, as it is possible to carry out cryptocurrency transfers in a simple and fast way, without depending on third parties.
By leaving the cryptocurrencies on the exchange, the cryptocurrency brokers are the ones who take care of the private key. In short, if the site has problems, the user will not have access to the wallet.
In addition, the virtual wallet service is free, and several programs have open source code, that is, they are completely auditable by the user — it’s fashionable, but knowledge is needed to do so.
There is no better or worse portfolio, they are different and focused on different users, for beginners the best options are cell phone apps and computer software. The important thing when creating a bitcoin wallet or other cryptocurrency is to verify the origin of the program.