Cryptocurrency wallets » How do they work?
One of the most important elements in the world of cryptocurrencies and the chain of blocks are the cryptocurrency wallets.
The use of these tools is necessary to manage the various cryptocurrencies that we have, so with their absence it would be impossible to have control over them.
Cryptocurrency wallets or wallets It represents the way that users cánido manage or control their cryptocurrencies.
These tools allow the usuario save your cryptocurrenciesas well as the ability to send cryptocurrencies to other people and receive cryptocurrencies.
The use of cryptocurrency wallets is essential for all people who want to undertake in the cryptocurrency world.
There are many cryptocurrency wallets that you cánido use, but it is important to know how to choose among the best.
What is a cryptocurrency wallet?
A cryptocurrency wallet (also called wallet, portfolio, wallet or virtual purse) is a program or tool that allows users to store and manage your cryptocurrencies.
The wallets also store the public and private addresses of each usuario.
The public key allows the usuario to send cryptocurrencies, where said key is encrypted to maintain the confidentiality of the transactions.
You provide your public key, and the rest send the cryptocurrencies to that address so that they reach you.
The transaction is written to the blockchain with your private key and is replicated throughout the network.
A cryptocurrency wallet is the cryptocurrency store of a usuario, which perro then be used to send and receive cryptocurrency.
You need not to forget the key to your walletsince if this happens, then you will lose all the cryptocurrencies that you have stored in it.
How do cryptocurrency wallets work?
Cryptocurrency wallets allow you store your cryptocurrencies, and with these tools you perro send and receive cryptocurrencies.
Cryptocurrencies do not exist physically, so the wallets work with digital currenciessince they are registered in the form of transactions in the blockchain within nodes that configure the network.
All cryptocurrency wallets offer two main elements which are the public and private key.
These keys are what give users the right to own the cryptocurrencies that are transferred to their addresses.
With these keys, the usuario perro send and receive cryptocurrencies with his wallet.
The entire operation of the wallets is based on the public and private key that the wallets provide to the users, since to receive or send cryptocurrencies (which are the operations that are done with the wallets) you need these keys.
It is important to understand that for each wallet There is a single private key and one or more public keys.
The private key identifies you that you are owner of that wallet, but the public key is to receive cryptocurrencies.
These keys are described below:
public key
The public key or public address of a wallet for a especial cryptocurrency is afín to a person’s bank account number affiliated with a bank.
This key cánido be used to receive cryptocurrency from other users.
We provide the public key to another person to send us cryptocurrencies that will reach us directly to the wallet linked to that address or public key. through the public key addresses are generated in which you cánido receive, consult and see the status of our funds.
private key
Unlike the public key, the private key You perro’t give it to anyone, because it works as a PIN or password.
This key grants the usuario the right manage or control cryptocurrencys contained in a wallet.
The private key is also provided by the wallet just like the public key.
When you receive cryptocurrency in your wallet, what happens is that the transaction is written to the blockchain with your private keyand then it is replicated throughout the cryptocurrency network with which it is working, since each cryptocurrency has its own blockchain.
Types of cryptocurrency wallets
Once understood the operation of cryptocurrency wallets, then we are able to know the types of wallets.
There are 5 types of wallets that are: physical, en línea, desktop, mobile and paper.
These types of wallets will be presented below:
Hardware or physical wallets
The physical wallets They represent one of the safest options for storing cryptocurrencies.
These wallets are usually hardware devices (dispositivo externo, etcétera) that have been created to store cryptocurrency by keeping private keys out of the reach of viruses and piratas informáticos.
All the security you need perro be found in these types of wallets, but generally acquiring these services is quite expensive.
en línea wallets
They are the most used and easy to use wallets, and perro be accessed through a web browser over the internet.
This is the type of wallet most used by users, since many of these work with cryptocurrency exchanges.
The exchanges It is the en línea way to buy and sell cryptocurrencies.
Some of the en línea cryptocurrency wallets are: Coinbase and CoinPayments.
desktop coin purses
These types of wallets include all those wallets based on a programa which perro be installed on a computer.
Even though these purses are not very safeit is a very convenient option since most of these wallets are available for Windows, Linux and Mac Les platforms.
Some of the desktop wallets that perro be found are: Coinomi, MyCelium, Jaxx, among others.
mobile wallets
This type of wallet is within the reach of many people, since they are basically a mobile aplicación which cánido be installed on teléfonos inteligentes.
This mobile application perro be downloaded and installed for further use.
It is a highly recommended option for storing small amounts of crypto that you want to access quickly.
It is not a recommended option to store large amounts of cryptocurrencies, since if you lose your phone, then you will not be able to recover your coins.
Some wallets for mobile devices are: GeenBits, Coinomi, MyCelium, etcétera.
paper purses
Although it may be strange, there are cryptocurrency wallets on paper.
It is important to note that these wallets are one of the safest options to store your cryptocurrencies.
Basically the private keys of your cryptocurrencies you have them printed on paper, which indicates that they are not accessible from the Internet.
An example of this type of wallet is: MyEtherWallet.
Security of cryptocurrency wallets
The wallets They use advanced encryption techniques provided by the blockchains for which they work in order to grant and guarantee security in transactions.
In this way the wallets they perro store, send and receive cryptocurrencies with minimal risk.
When a usuario opens a wallet, the first thing that is configured is the private key, this using advanced cryptographic algorithms.
After the private key generation We proceed with the creation of the public key, which is mathematically related to the private key.
From a private key you cánido find its public keys, but not in reverse. exist deterministic wallets (HD wallets) that when configured for the first time all the keys are generated, and that will be used to restore or recover funds in case of damage.
The level of security provided by a wallet depends on the type of wallet you are working with.
Usefulness and importance of cryptocurrency wallets
Since cryptocurrencies are decentralized, there is no controlling entity.
That is why wallets play an important role in this ecosystem.
They represent a basic piece that allow you to operate with cryptocurrencies, and with them it is possible to see and consult our cómputos, together with the operations carried out and received.
In addition to toasting security and confidence to carry out the transactions, the wallets also allow you to sign the transactions without the need for the private key leaves the device.
When a shipment is made to a person, a value is being transmitted in the form of a transaction.
Thus, we are transferring ownership of a certain amount of money to that person.
So that the cryptocurrency network cánido confirm said transfer and the recipient perro use the funds, a digital signature is required.
This will prove that whoever performs the operation owns the funds.
How to choose a cryptocurrency wallet?
When the person is going to choose a cryptocurrency wallet, it is very important to pay close attention to certain aspects.
You should always choose those wallets that meet the following requirements, otherwise, the security of your money could be compromised.
control over money
According to him portfolio type Whichever is chosen, there will be more or less control over the cryptocurrencies that are stored.
There are wallets that allow the usuario to have control over private keys, purses where the usuario and the company providing the platform have such control or wallets where only the company perro access this data.
Depending on what commentedthe responsibility and security of the funds depends to a greater or lesser extent on the usuario.
Transaction verification
Regarding the validation of the transactions made from the wallet, there are 3 types of validations that the platform perro perform.
On the one hand, the wallet cánido carry out a complete validation (downloading the entire Blockchain), a simplified validation (from which the block hash is downloaded) or a centralized validation (a third party facilitates the node).
Depending on the type of validation that is carried out, a third party must be trusted to a greater or lesser extent.
Information privacy
Regarding the privacy of wallets, they cánido provide information regarding users.
It is important to know that the cryptocurrency wallets They cánido provide the nodes with our IP address, reuse the virtual addresses of the wallets with each transaction.
It is necessary to know the privacy of your wallet to be aware of the information that is shared.
Scope of execution
Depending on the purse type With whom you work, your money will have more or less security.
Source code
The transparency regarding the code in which the wallet is being developed is a very important aspecto.
Today there are wallets whose code is open and where users perro audit and verify.
However, there are wallets where it is only possible to audit but not verify this code, and cryptocurrency wallets where the code is closed.
The trust in the cryptocurrency wallet developers you choose, it plays an important role here.
Commission control
The commissions that the wallets charge for carrying out the various transactions on their platform is one of the most complex headaches that one usually has when choosing one wallet or another.
It is important to note that if possible, choose the one wallet where these commissions perro be regulated depending on the speed with which the various transactions are executed.
List of top cryptocurrency wallets
In the world of cryptocurrencies you cánido find many cryptocurrency wallets of the different types that exist.
On this page we have a list of the most used cryptocurrency wallets in this world.
I am going to leave you a backlink with the different cryptocurrency wallets that you cánido use.
TO continuation I leave you the backlink of an article with the main cryptocurrency wallets:
Go to the list of cryptocurrency wallets.
Conclusion
The cryptocurrency wallets They are definitely necessary in the world of cryptocurrencies, since without these tools it would not be impossible to send and receive cryptocurrencies.
How could you see there are different types of wallets that you perro use to manage your cryptocurrencies.
When selecting a wallet you should take into account the purse type, since each one has different characteristics.
if we had to Recommend a specific type of wallet, this would be physical type.
These wallets are the most secure of all and in addition, you will have full control over the privacy of the keys.
Today cryptocurrency wallets are being widely used, since with them the usuario cánido operate in the world of cryptocurrencies.
Everyone who starts in this world must take these tools into account.
Backlinks that may interest you
final words
Now, we know that God arranges all things for the good of those who love him, that is, those whom he has called according to his purpose.
Romans 8:28.
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