A digital wallet for cryptocurrency is very much like the leather wallet in your pocket used to store cash and cards. A digital wallet is capable of storing different types of cryptocurrencies, such as DasCoin. Most digital wallets ensure privacy and security while being able to complete transactions quickly.
There are two basic categories of wallets: hot wallets and cold wallets. Hot wallets are web-based or software-based. Cold wallets can be just paper wallets or hardware wallets.
The hot wallet vs. cold wallet debate has been going on ever since the two have been in existence. Although both serve the purposes of storing cryptocurrency, their methods are completely different. Hot wallets are usually free and are always connected to the internet, thus enabling faster transactions and easier everyday use. Cold wallets focus on security and are not connected to the internet. Hardware wallets are a form of cold wallets. Since they are not connected to the internet, they are less vulnerable to threats, such as hacking. In this article, we talk about how these wallets help in storing cryptocurrencies like DasCoin.
Since hot wallets are always connected to the internet and to exchanges, they can easily be transferred through exchanges. Hot wallets accommodate faster transfer rates and are easy to use. Cold wallets are never connected to the internet. To transfer the currency, there is a need of entering the private key and other similar steps to gain access or to get it into the exchange market. Hot wallets receive currency in much quicker time.
There is no denying the fact that cold wallets are more secure than hot wallets. Lack of connectivity implies that cold wallets will never be hacked. Hot wallets were prone to outside attacks in the past, but are becoming more and more secure. Two-factor authentication methods and KYC integration have increased their security. If you are planning to use a hot wallet, use an app or software wallet instead of the wallets which exchanges provide. These apps don’t store your private keys on their server making your valued currency much safer.
Hot wallets can be online wallets which are given to the user from the exchange, as well as software wallets which the users download from various platforms. They can be used for storing any type of altcoin. For cold wallets, this is not the case, although a paper wallet might not cost you a penny, hardware wallets, like Trezor, might cost you between $100 to $400.
It may be that cryptocurrency will replace the dollar and the euro in the future. Countries and businesses around the world have started accepting payment in the form of cryptocurrency. A day might come when we use cryptocurrency, like DasCoin, to make everyday purchases. Hot wallets enable the transactions very quickly since they are connected to the internet. Cold wallets are a bit more cumbersome for everyday transactions.
One simple tip for everyone is to keep small amounts for daily transactions in hot wallets and keep the rest in cold wallets. Digital wallets help make sure that your cryptocurrency can be easily traded.
This post was last modified on April 13, 2018 1:22 am