Adrian Wertz, Keyream contributor.
There seems to be a never-ending feed of wallet ads flooding the advertising world and our social media feeds. Minimalist wallets, leather billfolds, modular metal and carbon fiber wallets—the list goes on—before you know it you’ve seen over a dozen wallet ads in a week. People do need wallets: whether it’s for plastics cards and identification or cash, there seems to be a special design out there that fits one’s style and needs.
This seems to be the same with the various cryptocurrencies—the blockchain-powered digital coins that are growing more important each day. New and current users of cryptocurrency are subjected to the bombardment of a variety of wallets in which to store these digital assets. Many factors influence the choice of crypto wallet. The more tech-versed and security conscious types might go for hardware wallets like the Ledger Nano S, which looks like a USB, keeps crypto offline, are difficult to use, and do not encourage day-to-day use of crypto. Others might go for digital wallet applications for desktop or mobile that have beautiful and easy to use interfaces like Exodus wallet (a favorite at Keyream). There are many to choose from and each vary in ease-of-use, utility, and design just as wallets in the traditional sense do.
A cryptocurrency wallet contains the public and private keys—the bits of data that account for the user’s piece of the pie of the blockchain ledger—of whichever crypto coin or token one is storing, and most (excluding hardware wallets) enable users to send and receive crypto easily plus monitor their balance.
There are considerable misunderstandings about crypto wallets. Relative to normal pocket wallets, crypto wallets don’t actually store any amount of currency. Crypto, such as Bitcoin, doesn’t get stored in any particular location. Rather, through the coin or token’s distributed blockchain ledger, digital assets are recorded to one’s public address. Exchanges and transactions between parties are recorded on this ledger, and a change in balance reflects in your cryptocurrency wallet.
There are two main ways that you’ll be able to store crypto. The easiest are software wallets, such as Exodus, which is located on your desktop, laptop, or mobile phone. These wallets are only accessible from the devices in which the application/software was originally installed on. While some wallets allow you to ‘restore’ one’s data onto another device in the event the original device is lost or damaged, each new device a wallet is downloaded on accounts for a new set of public and private keys. For example, this means that if one uses the same wallet software on their desktop and mobile devices the public and private keys will be different, and they won’t be able to access the balance of their desktop wallet on their mobile device and vice versa. This, however, isn’t really an issue, and using multiple wallets is actually good practice.
Digital wallets are sometimes referred to as ‘hot wallets’ which means that they are stored on devices that are connected to the internet making receiving and sending at any time possible. There are many to choose from, but each really do the same thing and work the same way. The main differences will be in the number of compatible digital currencies a wallet has integrated—that is, the number of coins or tokens that one could choose to store within the wallet—and how easy the wallet is to use
Hardware wallets, also called cold wallets, differ from software wallets in that they store a user’s private keys on a physical device, such as the USB-looking Nano S mentioned earlier, which ensures that coins and tokens are stored offline. These usually work in tandem with the hardware makers’ digital wallet, and to receive or send crypto to and from the device it must to connected to a computer via cord. When it is not physically connected to a computer, the device stands alone offline theoretically keeping digital assets more secure. For a new user approaching this method of storage, the learning curve could be daunting. While some companies are making these easier to use, they are currently unfriendly to use and take some extra effort and knowledge. However, hardware wallets do offer more security and may be the better option for users who wish to store their crypto long term.
Deciding which type of wallet to go with is just a matter of experimentation. It’s free to download and try pretty much any digital wallet. In deciding to try out a hardware wallet don’t be too surprised of the price tags ranging past $60.
In the currently foggy world of crypto, Keyream serves to contribute to accessibility and ease-of-use.