Crypto Wallet: What Is It and How to Use It?

Written by Anna Komashko
Written by
Investing reporter
ECOS community manager...
5   min.
Alternative investments 
Content

To store cryptocurrency coins, you should get a crypto wallet. In this article, we’ll talk about the varieties and functionality of this kind of solution. You’ll find out how to install and use it and which brands are worth paying attention to.

What Is a Crypto Wallet?

It’s a program/app or gadget that lets its users access, manage and control their cryptocurrencies. Each solution has two keys:

  1. Private. Only you know it and type it in to sign transfers.
  2. Public. Share it with third parties that will be sending funds to you.

It’s an analog to a traditional purse where you put coins and banknotes.

People use such devices and apps to:

  1. Securely store digital money
  2. Trade it
  3. Earn interest on it
  4. Transfer cryptocurrencies to and from any geographical location
  5. Access exchanges and decentralized finance apps
  6. Order goods and services from cryptocurrency-compatible stores

The functionality of different solutions might vary considerably.

Why Are Crypto Wallets Important?

Such devices prove that you own digital money. It’s not kept inside the app or a physical gadget. It remains within its native blockchain. You purchase or install a solution that stores the keys that grant you access to coins. If you lose these keys, you would fail to transfer virtual money to anyone or purchase products with it.

How Do You Use a Crypto Wallet?

To start using a crypto currency wallet, it’s necessary to:

  1. Download it
  2. Sign up for it
  3. Put down your private key
  4. Transfer tokens to your balance

Alternatively, purchase a physical gadget, install the software for it and transfer coins to it. No account creation is required.

If you would like someone to transfer tokens to you, share with them your public key. To get to know this key, click the Generate button. Wait until the money arrives and confirm the fact of receiving it. 

To transfer tokens to a recipient, ask them to share their public key with you. Specify the sum, sign the operation and confirm it. The interface will show you the commission for the operation.

What’s the Difference Between the ECOS Wallet and Crypto Wallet?

The ECOS solution offers the same functionality as any other one. Plus, it enables you to:

  1. Manage all your Bitcoin mining contracts from one place
  2. Start cloud mining
  3. Enjoy enhanced safety: all the coins are backed up with USDT
  4. Exchange different assets
  5. Access portfolios with high profit potential

This app is integrated into the ECOS ecosystem. It offers excellent facilities for cryptocurrency mining and investing. You can benefit a lot from joining it!

Understanding How Crypto Wallets Work

Inside the blockchains, digital money exists in the format of bits of data. When you go online and access the database, it detects all the bits related to your public address. You conveniently see the total sum of your tokens.

Selected apps and devices support an extensive range of coins. Others are compatible only with a handful of assets. You can send tokens only to an address that supports this token. If you send ETH to a Bitcoin wallet address, you’ll lose your money irreversibly.

Types of Crypto Wallets 

Feel free to select from two varieties: noncustodial or custodial. If you pick the former, you’ll be the only person who knows your private key. If you lose or forget it, you would fail to restore it and you’ll lose your savings irreversibly.

Custodial solutions allow third parties (trading platforms or security providers) to keep and restore the private keys of other people. 

Hardware Wallets

Here is the answer to the question “What is a crypto hardware wallet?”: it’s a gadget that looks like a hard drive and costs a few hundred dollars. 

You connect it to your computer and go online. Most likely, you won’t have to sign transfers manually, which enhances your security level.

Selected solutions connect to computers via Bluetooth. This doesn’t guarantee 100% security because hackers can intercept the signal.

Software Wallets

What is a crypto software wallet? It’s an app or a program that substitutes a hardware solution. Typically, they are distributed for free and exist in mobile or desktop format. The above-mentioned ECOS belongs to the mobile category.

Cloud-based software solutions are accessed as websites through regular browsers, either from a computer or smartphone.

Download only well-known apps. Random software often turns out to be malware in disguise.

Paper Wallets

What are crypto wallets made of paper? It’s paper where you put down your private keys. Their advanced versions contain not strings of letters and numbers but QR codes. Paper is more fragile than gadgets. It’s easy to lose it. If you rely on it, hide this precious document in a safe and avoid telling anyone about it.

Crypto Wallet Security

Do you know what is a cold wallet crypto? It’s a hardware one when it’s offline. When it goes online, it becomes hot. As long as it remains offline, hackers can’t attack it. On the flip side, you might lose or damage the device. If you fail to repair or retrieve it, you’ll lose your funds forever.

Virtual solutions are more likely to become targets of hacking attacks since they’re permanently online. However, cybercriminals prefer to attack trading platforms that store funds that belong to multiple users.

Custodial solutions are more secure than non-custodial counterparts. 

To restore your savings from a lost or damaged gadget/app, you may resort to the seed phrase. It’s a tailor-made random combination of words (usually nouns) that are not logically interconnected. You’ll get to know it when activating your gadget or creating an account in the app/program. It’s vital to store it just as carefully as the password.

Cryptocurrency Exchanges

You have the right of keeping your tokens on a trading platform. This option is popular among individuals who need to promptly react to market signals. 

The bad news is that the platform might go bankrupt or turn out to be a scam. Criminals target such businesses much more frequently than private apps. 

If the exchange goes bankrupt, some users might get their funds back. Institutions and traders who operated large sums will have the top priority. The authorities might compensate for their losses — but fail to find enough money for minor users.

Consider splitting your savings into two parts. Store one part in your app or on a physical gadget and the other on the exchange. For greater safety, distribute your savings between several storages of each variety.

Which Cryptocurrency Wallet Is Best?

The answer depends on your demands and habits. The target audience of mobile apps is those who check and manage their assets regularly. The more extensive the functionality, the better. For instance, the free ECOS app is great for those who frequently exchange tokens, use cloud mining and control Bitcoin mining contracts. 

If you hold coins, the best crypto wallet for you is hardware. To select a top brand, read customer reviews online. Such gadgets cost a few hundred dollars.

Conservative users put down their passwords and seed phrases on paper and put it in a safe. It’s the easiest method that guarantees full protection from online hackers.

What Is the Safest Crypto Wallet?

It’s hardware that remains offline and automatically signs your operations when you go online. On the flip side, it’s prone to damage. You might lose it or it might get stolen. The same may happen to paper.

Software solutions and accounts on exchanges can be hacked. No variant can guarantee full safety.

Wireless connection undermines security. It’s too easy to hack it.

The more reliable the brand, the better. An unknown app that claims to “store virtual money” might be malware in disguise.

Do I Need a Wallet for Cryptocurrency?

This solution will store the keys that let you reach the distributed ledgers where your digital money is stored. Without them, you can’t do anything with your assets. Alternatively, you may keep your funds on a trading platform but it involves much higher risks.

Conclusion 

A crypto wallet lets its users transfer and control their funds through a handy interface. Feel free to select from custodial or non-custodial, hardware, software and paper solutions. Hardware and software ones differ greatly in their functionality. ECOS serves as an example of a top brand. It’s a free mobile app that supports a wide range of currencies, boasts a user-friendly interface and has highly professional support. It’s a part of the extensive ECOS ecosystem where you can invest in mining, exchange assets and carry out many other functions.


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