CryptoCap – How to Store Cryptocurrency
How to Store Cryptocurrency: A blog about the different methods to store cryptocurrency ranging from hardware wallets, paper wallets and what not.
We have all heard of the concept of cryptocurrency and blockchain technology. But many of us still do not know where we store our cryptocurrencies. This is a common problem among many cryptocurrency users as there are plenty of options to choose from.
Not only that, but there is also a chance that you may lose your coins forever if you are not careful. This guide will help you make the right choice when it comes to storing your cryptocurrencies. We will talk about the different types of wallets available along with their pros and cons.
Types of Wallets
There are two main types of cryptocurrency wallets namely Hot Wallets and Cold Storage Wallets. Hot wallets are connected to the internet whereas cold storage wallets are offline. Let us take a look at hot wallet first:
Hot Wallet: These are used for daily transactions over a computer or mobile device. They can be accessed anytime as they are connected to the internet. These wallets contain your private key which must be kept safe at all times in order to prevent theft or loss of funds.
Storing your cryptocurrency can be as simple or as difficult as you want to make it for yourself.
If you are not looking for a way to get into the world of cryptocurrency but are just looking to store them, then there are options available to you.
The question that I always get asked by people that have recently purchased some cryptocurrency is “how do I store it?”.
It’s an easy question to answer and there are plenty of options available to suit all types of learning curves.
I will outline some of the options available in this blog post and hopefully clear up any confusion around what option is best for you.
Before I do though, I would like to stress the importance of making sure that you don’t leave your coins on an exchange if you’re not trading them.
Exchanges are great for trading your coins when the market is moving fast, but they should never be used as a wallet of sorts because they aren’t 100% secure.
How to Store Cryptocurrency
It’s no secret that cryptocurrency has been gaining a lot of popularity in recent times. With the rise of Bitcoin and Ethereum, a lot of people have started investing heavily in the booming industry. While many people are investing in coins, the question remains on how to store cryptocurrency?
Cryptocurrencies are stored in wallets. These can be physical or digital. Let’s take a look at some of the most popular ways to store cryptocurrencies.
What is a cryptocurrency wallet?
In order to understand how these wallets work we first need to know what a cryptocurrency wallet is. The term “wallet” does not refer to a physical wallet, but rather it is used for the management of cryptocurrency keys.
The first thing that you need in order to store cryptocurrencies, is a private key and a public key. These keys are used to sign transactions and are basically two complex strings of numbers and letters. The public key, which is the address of your wallet, can be shared with anyone who wants to send you cryptocurrencies, while the private key should never be shared with anyone because it allows access to your funds and should be kept secret.
When you send cryptocurrencies from your wallet, you sign a transaction using your private key which proves that you own the funds and you broadcast this signed transaction to the network where it is validated by miners and then permanently added to the blockchain (the database containing all transactions) and in exchange for their effort they receive a transaction fee.
So what does this have to do with wallets? Well, these wallets work as an interface between your private & public keys (aka addresses) and allow you to easily manage them. They can also provide additional features such as mnemonic phrases
Cryptocurrency is a type of digital currency that uses cryptography for security and anti-counterfeiting measures. Public and private keys are often used to transfer cryptocurrency between individuals.
Cryptocurrencies are a relatively new form of digital currency. The first cryptocurrency was Bitcoin, which was created in 2009 by an individual or group that used the pseudonym Satoshi Nakamoto. Transactions are recorded on a blockchain, which shows the transaction history for each unit and is used to prove ownership.
The anonymity of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion. However, cryptocurrency advocates often highly value their anonymity, citing benefits of privacy like protection for whistleblowers or activists living under repressive governments. Most cryptocurrencies are designed to gradually decrease production of currency, placing an ultimate cap on the total amount of currency that will ever be in circulation, mimicking precious metals.
Cryptocurrencies are digital currencies that were designed to work as a medium of exchange for financial transactions. In other words, it is a virtual currency that uses cryptography as a means of security. Cryptocurrency became popular with the introduction of Bitcoin in 2009 and has since evolved over the years.
Cryptocurrencies have their own ways of being stored. The regular way of storing cryptocurrencies is through a hardware wallet or through an exchange. But the best way of storing cryptocurrencies is through a wallet that you control yourself. This means that the private keys to your coins are in your possession, and not anyone else’s.
Storing your cryptocurrencies on someone else’s device (hardware wallets) or in an exchange, can be risky because you are entrusting others with your private keys (and hence your coins). In case of a hardware wallet, if you lose it, you lose your coins. In case of an exchange, if they get hacked or if they decide to close down their operations, you will lose your coins.
Therefore, the best way to store cryptocurrencies is by using a software wallet which runs on your computer (or mobile phone) and which gives you full control over your private keys.
The top 5 software wallets for storing cryptocurrencies are: