If you are in this article means that you are looking for information on the Cryptocurrency wallets. Well, if that is the case, then you are surely in the right place. This article will guide you perfectly about the Cryptocurrency wallets and how do they work.
Before getting to the detail, you must consider the cryptocurrency wallet similar to that of your own leather wallet. And the real-world cash as the Cryptocurrencies.
So why do we carry wallets? If we want, we can carry cash in our pocket. Well, the answer is very simple it is to safeguard your money from being lost or stolen. The same principle applies to the Cryptocurrency wallet and currencies.
Owning a Crypto wallet means that you will be able to exchange Crypto coins with other people.
Does a Cryptocurrency wallet work like a normal wallet?
Well, to some extent, you can say that the Cryptocurrency wallet works like a normal wallet. But it can be said only if you are storing money in it. Once you start exchanging Cryptocurrencies, it will no longer be a regular wallet.
Crypto wallets are supported by blockchain technology. So, in a way you cannot say that the coins are stored in the wallet. It is precise to say that the coin value is encrypted with the help of blockchain technology.
A crypto wallet address is just like an account. Whenever there is any transaction, you are asked to give the wallet address. Giving your wallet address to the other people is the same as giving them your account number for the transaction.
What are the Public and Private keys?
Now you know how the Cryptocurrency wallet works, right? And the wallet address is similar to that of any account number. To access the wallet there are two types of keys, Public keys, and Private keys.
The public key has nothing special about it, however, the private key allows only the owner to access the wallet. Just understand this with a real-life example.
For instance, you are at the bank, and you want to transfer a sum of money to another bank account number (employee). You first have to give your account number then a password to verify that it is you who is doing the transaction.
The same thing happens with the Cryptocurrency wallet exchanges.
Are Crypto Wallets secure?
In the above section, we have gone through the working of the Cryptocurrency wallets and the kind of keys they use. In this section, we will discuss its security features.
Crypto wallets are secure but if a person has your private keys, then he/she can easily access your Crypto wallet. But the key question still remains, what are the preparations made by the crypto wallet to stop that from happening?
There are many tools to protect Bitcoins. Having an anti-virus software can be the very step you can take towards safeguarding your Crypto wallet.
To make sure that you are not slacking off with the security. You can start by keeping your software updated. Regularly updating your software can help you. As hackers always try new methods to hack into people’s systems. So, keeping your software updated will make it impossible for the hacker. Secondly, you can even have two-step verification (quite popular among the all-new software).
It is very important to keep a very close eye on your Crypto wallet. This just to make sure that you know everything happening in your wallet. If you want to add some extra security to your wallet, you can back up your wallet more frequently.