Last Updated on 18 mins by cryptoevent

After being dismissed as a passing fad by financial pundits around the world, interest in it is growing Bitcoin and cryptocurrency indicates that the digital assets industry is here to stay. Cryptocurrency adoption rate surged over 178% in December 2021 and is expected to increase exponentially by the end of 2022.

While crypto (like Bitcoin) started out as a peer-to-peer payment method, today the industry features tokens that serve a variety of purposes, such as anonymity, information sharing, automation, and security.

What are cryptocurrency assets?

A cryptocurrency is a digital currency that lives on a digital ledger known as a blockchain. A blockchain is immutable, meaning it cannot be changed or deleted as it does not rely on a central server. Cryptocurrencies were created as an alternative to the centralized system governments practiced today. It was founded on the idea that anonymity and privacy are fundamental parts of human nature.

Why use a cryptocurrency wallet?

Some new cryptocurrency investors or speculators are leaving their cryptocurrencies on crypto exchanges. These can be described as a marketplace for selling and buying cryptocurrencies. True crypto purists tend to keep their cryptocurrencies in an offline crypto wallet. This is because a wallet guarantees that your funds cannot be accessed without your consent. If a cryptocurrency user intends to actively buy and sell cryptocurrencies, a crypto wallet is recommended for security and accessibility reasons. Wallets can also house digital valuables like NFTs.

How does a crypto wallet work?

Although each cryptocurrency wallet works slightly differently, they are all designed to provide secure access to any cryptocurrency you hold. A cryptocurrency wallet does not actually contain any cryptocurrency. Instead, it stores the private key that provides access to an individual’s cryptocurrency. The cryptocurrency itself is held on the blockchain.

The private key is the critical piece of information that needs to be kept safe due to cryptocurrency access.

Features of a cryptocurrency wallet

Simple and extremely safe

It works similar to any other software or wallet you use for daily transactions. It’s all about protecting your private key. Depending on your wallet type, the most secure offline wallet will be immune to hackers (hackers tend to target exchanges because they are online and see large amounts of crypto transactions).

Enables instant cross-border transactions

Due to the nature of cryptocurrency, crypto wallets provide a way for people to conduct limitless transactions. With no intermediaries like banks, there is no delay in the transactions.

Low transaction fees

The cost of transferring money is significantly lower than traditional banks.

decentralized

Crypto wallets are resistant to government intrusion (government can’t just make the company or platform hand them your crypto).

Classes of wallets: custodial and non-custodial wallets

A public key is essentially the address of your crypto wallet. This is a public data point, similar to your home address. To deposit cryptocurrency into a wallet, all you have to do is enter the public key as the deposit address. The two keys are used together to transfer crypto from one wallet to another. This is analogous to using your handle in a service like Venmo or CashApp.

Custodial wallets are financial services provided by a centralized organization, such as a cryptocurrency exchange. With the escalation of the war in Ukraine, several governments have banned custody wallets from completing transactions for individuals in certain locations.

Because non-custodial wallets do not require a delegation of trust to an institution, no institution may refuse to perform transactions.

Recommended crypto wallets on the market

• Ledger is a well-known brand in the world of cryptocurrency wallets. It is an offline wallet that has crypto security as one of its core pillars. Your account can be integrated with a variety of popular software wallets, including Crypto.com and Guarda, through the Ledger Live platform. Ledger also supports 2FA and supports more than 5500 assets.
• Atomic Wallet allows users to store over 400 cryptocurrencies and buy, trade or deploy digital assets directly from their wallets. Unlike some of its competitors, Atomic Wallet doesn’t allow you to connect your holdings directly to cold storage, meaning your assets stay online (which isn’t immune to hackers).
• Electrum is an unusual wallet as it only supports Bitcoin. It is free, open-source software that supports 2FA, easy connectivity to cold storage, and multi-signature transactions. Electrum only has desktop software.
• Exodus offers a good suite of applications, including a mobile app, a desktop client, and a browser extension. Its products allow users to buy, sell or stake cryptocurrencies directly from their wallets. It includes an interaction with Trezor’s cold wallet to facilitate the transfer of cryptocurrency from hot to cold storage. Exodus supports around 150 coins, including several large assets.
• Guarda is a free, all-purpose cryptocurrency wallet that users can access via mobile, desktop, or browser plugins. It claims to support over 400,000 digital items. Guarda users can keep their cryptocurrency in cold storage thanks to an interface with the hardware wallet ledger.
• MetaMask is free, open source and can store any digital assets generated on Ethereum (there are more than 500,000). It offers mobile and browser-based wallets but no desktop software. However, you can easily deploy tokens using the web applications associated with MetaMask.
• Trust Wallet is another storage device that works with a major cryptocurrency exchange. However, it is fully open source, which few competitors can claim. More than a million assets are supported.

How do I store cryptocurrency and what is a bitcoin wallet? appeared first on Coin Insider.