WHAT CRYPTO WALLETS ARE ALL ABOUT

It has come to my knowledge that a few number of people don’t know what crypto wallets are,how crypto wallets work,the different type of wallets,and their benefits.this would probably help to remove the factors stated above lets get started the first question would be what exactly is a CRYPTO WALLET?

DEFINITION:A cryptowallet is a device, physical medium,program or a service which stores public and or private keys for the sole purpose of cryptocurrency transactions.it also creates the function of being able to encrypt and sign information.

The second question to be answered is how does a crypto wallet work?

crypto wallets are responsible or are capable of storing keys be it public or private which are used to purchase crypto currencies such as bitcoin,ethereum etc they also provide digital signatures to authorize each transaction.Digital signatures can provide evidence of origin, identity and status of electronic documents, transactions or digital messages.you’ll need to keeps safe and secure your private keys which allows you to unlock your crypto wallet in order to trade or spend your crypto currency.

the next question is what are the types of crypto wallets available?

crypto wallets are of two major types which are the hot wallets and the cold wallets.

HOT WALLETS:A hot wallet is a crypto wallet that allows cryptocurrency user to store send and receive tokens.hot wallets are linked with public and private keys that help with fast transactions and protection of wallets hot wallets are also know as online wallets this is because they’re connected to the internet.example of such wallets are mobile wallets such as;coinbase,kraken and desktop wallets
COLD WALLETS:A cold wallet is a cryptocurrency wallet that is not connected to the internet. With cold storage, the generation and storage of the private keys is done in an offline environment.It is a physical device that is very similar to a USB stick. It signs transactions using the private keys that are stored offline. Online environments are vulnerable to hackers, who therefore actively attack online crypto wallets(HOT WALLETS) examples include;paper wallets etc

the kind of crypto wallets that an individual uses is chosen based on the purpose of the individual.

most individuals who use “hot wallets",use them for the purpose of business and making of payments or who intend on selling of his or her digital currencies after a short period of time,and also trading whereas in the case of “cold wallets",it is used my individuals who own large amount of crypto currency or who are interested in accumulation of crypto currency for a long term storage.

Hot wallets are widely used because of the fact that they’re generally FREE.

ADVANTAGES OF HOT WALLETS
•hot wallets are convenient to use due to the fact that they do not require the user to transition between online and offline to make crypto transactions.

•all kinds of crypto currencies can be stored on them

DISADVANTAGES OF HOT WALLETS
•The online nature of hot wallets make them vulnerable to being hacked

•hot wallets are also vulnerable to government regulations
ADVANTAGES OF COLD WALLETS
• the offline feature of cold wallets make them high secure and impossible to be hacked.

•cold wallets are also capable of holding a larger amount or quantity of crypto currency than hot wallets are capable of holding or storing.

a study shows that 100% of user crypto currencies are held offline in cold storage. Crypto.com has secured a total of USD 360M in cold storage insurance against physical damage or destruction, and third-party theft.

•cold wallets are not affected by government regulations

DISADVANTAGES OF COLD WALLETS
•The offline nature of cold wallets make their payment process very cumbersome

•cold wallets are most times expensive and are therefore difficult to acquire

•cold wallets have a limit to the different type of crypto currencies that can be stored on them.

if you have other questions on the topic contact me here
email-tonyjay651@gmail.com

telegram-@tonynwosa