S4B Crypto Contest - Season 5
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Greetings friends and welcome to my participation for the S4B contest season 5, where we required to talk about crypto wallets, the different types, and their needs . Hope you get to learn something new today as I attend to the hints as provided.
What is a crypto wallet? |
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Traditionally, a wallet is small pouch usually made of leather that keep our money for safety and easy access, therefore just like our traditional wallets, a crypto wallet is a digital pouch were we store, send, and receive cryptocurrencies like Steem, Bitcoin, Tron etc.
What is a crypto wallet? |
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What are the different types of crypto wallets?
There are basically different types of crypto wallets under two categories, hot and cold wallets. Hot wallets are crypto wallets that are always connected to the internet, while cold wallets are crypto wallets that are connected to the internet.
However, under these categories, there are basically four (4) types of crypto wallets, which are;
Software Wallets:
These are crypto wallets that we download and use on our computers or smartphones, such as;
Desktop Wallets: are software programs that we download and install on our computers to help us store our cryptocurrencies, for example Exodus and Electrum.
Mobile Wallets: like desktop wallets, are downloaded onto our smartphones to help us store and manage our cryptocurrencies, examples include Trust Wallet and Coinbase Wallet.
Web Wallets:
Web wallets are online wallets that we can access through the use of a web browser. Examples are MetaMask wallet and MyEtherWallet.
Hardware Wallets:
Hardware Wallets are physical devices that are used to store cryptocurrencies offline. meaning that this kind of wallet is not connected to the internet, for examples is Ledger Nano S and Trezor.
Paper Wallets:
Paper Wallets are physical printouts or documents that contains our public and private keys and are typically generated offline to enhance security.
| wallet type | Benefit |
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| Software wallets | Conveniency, but may be more prone to hacking since it's always connected to the internet. |
| Hardware wallets | Offers the highest level of security, but then they can be a bit expensive. |
| Web wallets | Accessible from any device with an internet connection but may have some security risks. |
| Paper wallets | They are offline and believed to be secure, but can be easily damaged or lost if not handled carefully. |
Why do you need a crypto wallet? |
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We need a crypto wallet for the following reasons;
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Keeping Our Cryptocurrencies Safe:
Just like having wallets and banks to store and keep our money safe, a crypto wallet is used to store and protect our cryptocurrencies.
Sending and Receiving Cryptocurrencies:
Crypto wallets allows us to send and receive cryptocurrencies, just like we send and receive money digitally using our bank accounts.
Managing Our Funds:
Crypto wallet gives us full control over our funds, which means that we don't need to rely on a bank or any other third party to manage our transactions.
Accessing Different Cryptocurrencies:
Crypto wallets supports different cryptocurrencies, hence having one crypto wallet allows us to store and manage different types of cryptocurrencies in one place.
Privacy and Security:
Crypto wallets offers us privacy and security as they use encryption techniques to protect our funds as they uses private keys, which we use to access our funds.
What is the purpose of a private key in a crypto wallet? |
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Secure Access:
Our private keys allows us access and control to our cryptocurrencies, a power key that crypto wallet owner only uses to open their wallet and manage their digital assets.
Transaction Authorization:
Our Private key is what we use when sending or transfering our cryptocurrencies to someone else, therefore it serves as a means of authentication to our transactions.
Wallet Recovery:
If we ever lose access to our wallet or forget our password, it is the private key that we can use to regain control and restore our funds, making it serve also as a backup key to our wallet.
Security and Encryption:
Private keys are designed to be very secure as they are created using encryptions, making them almost impossible to guess.
Ownership Proof:
Our private keys serves as our proof of ownership over our cryptocurrencies in a crypto wallet. Therefore, to prove that the assets in the crypto wallet belongs to us, we all get different private keys to our different wallets.
On this note, I like to invite @yakspeace, @edidiongeffiong and @triple-a to participate, here is the Link
NOTE: Always have a smile on your face, as you are never fully dressed without one.
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