A wallet is a software program that stores both public and private keys. This program is able to interact with various blockchain thus enabling the users to send or receive the virtual currency. A wallet is more like a bank account where you can monitor the transactions and balance. A wallet is a basic requirement when you want to purchase or sell different cryptocurrencies.
Unlike the traditional wallets, the crypto wallets do not store the currency but rather it’s a program where you can see all your transaction records. When a user sends the virtual currency to another user, it involves signing off the ownership of coins from one wallet to another. In order to ensure a successful transfer, you private key needs match with the public keys once they math the balance of the receiver will increase and the sender’s balance decrease. In reality, there is no coin exchange but you only see a signal of the transaction in your cryptocurrency wallet.
What is the security of the cryptocurrency wallet?
The degree of the wallet security depends on the type of wallet that you use and your service provider. That is, either desktop, mobile, paper, hardware, or online. Serving on the web is much riskier to keep your wallet compared to offline form of wallet. For the online wallets, the holders are exposed to a lot of vulnerabilities and the exposure to hackers is one of the biggest risks. It is very hard to hack offline crypto wallets because there is no internet connection and there is no reliance of a third party for security.
In order to keep your wallet as safe as possible, then you need to understand what two factor authentication is and how best you can use it. Hackers target those investors who fail to use two factor authentications. Google authenticator is one of the most popular authenticator and it is very easy to set up. You do not need an account to register. All you need is the app. For anyone to access your cryptocurrency account, they would need to access your mobile device physically. However, if you lose your phone, it can be a hard task to get back to your account.
As much as the online wallets seem to be riskier, it is important to take measures to protect your wallet. Regardless of the wallet that you are using, the moment you lose your private key is the same moment you lose your money. Also, remember that the cryptocurrency transactions are irreversible so you should ensure that you double check before transacting in your account.