Wallet for crypto-currencies: definition, types, popular online services and hardware solutions

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The popularity of electronic money in the modern world is steadily gaining momentum. This is clearly evidenced by the rapid increase of the capitalization of “gold XXI century” – bitcoin. The ability to use digital coins for anonymous and cheap wire transfers, and also for profitable investment in crypto currencies is attracting more users.

However, unlike real money, digital assets cannot be put into an ordinary wallet. So before every future owner of the cryptocurrency raises an important question: where is the store of the accumulated electronic means? For this purpose there are special digital wallets, which allow their owners to safely protect coins and cryptocurrency to implement the transaction.

What is cryptocurrency wallet

Storage of digital coins is a program that stores records cryptomath on the hard disk of your computer (or other digital device), or a program designed to communicate with the Internet service, in which coins are stored. When performing each transaction, the program connects to the blockchain “Ledger”, where records are kept about the movement of all the moments, the cryptosystem checks the legitimacy of the payment and, in fact, takes the coins. Regardless of the form of a purse to gain access to their funds, the user must enter a private key storage which in this article will be given special attention.

Is it possible to store different cryptomonad in one wallet?

Digital coins of different kryptonite can only refer to the infrastructure of the network where they are emitted, so there is no possibility to put, for example, coins Ethereum to the bitcoin wallet. Promising, interesting cryptocurrency over time became more and users needed storage where they could keep coins of different cryptosystems. And soon, the market offered a solution – there are online services where you can access online wallets different kryptonite within one account (the coins are rotating, each on its network).

Multi-currency online wallet

This product can be described as a digital wallet, users simply log in to your account to access all your coins. Among such multi-currency stores are very popular online wallets of the following services:

  • Jaxx (https://jaxx.io/);
  • Exodus (https://www.exodus.io/);
  • Cryptomator (https://ru.cryptonator.com/);
  • Coinomi (https://coinomi.com/);
  • Virrex (https://virrex.io/).

Separate wallet for each crypto currency

Particularly pedantic users prefer to have a separate “electronic purse” for each particular cryptocurrencies – at first glance, this method allows to provide increased security of storage facilities. The owner gets control of his private key, and if the code recorded on the medium, not related to online mode, it seems that security cryptocredits practically threatens nothing. At the same time, not to mention two significant disadvantages to this approach:

  • variety of purses is not always appropriate for reasons of practicality. Open different wallets several times a day for payment in a particular currency – it’s just inconvenient for the active user, this variant is associated with a serious loss of time;
  • for each “e-wallet” needs to have its own private key, and if lost at least one of these keys, access to currency from this wallet will be closed.

What is a “hot” wallet

Electronic storage of cryptocurrencies are divided into two main types: “hot” and “cold”. Hot wallets are installed on the digital device and continuously communicate with the blockchain system, either directly or through the server of the online resource, where was the wallet. Constant communication ensures the possibility to carry out payments quickly, and do it anywhere in the world, of course, if you have a stable Internet connection. However, the vulnerability of the hot purses is obvious, their Achilles heel is in a constant network connection, so such applications can become victims of hacker attacks.

What is a “cold” wallet

Cold storage allows the owner of the amount of cryptocoins to protect yourself from such misfortune. It is also installed directly on the personal computer of the user, however not supported a permanent connection with the world wide web and is therefore unavailable for online criminals.

Because of its autonomy, this type of purse is more suitable for the storage of crypto-currencies than to implement instant transactions.

The private key is entered only at the time of transaction, consider the basic methods of safe storage:

  • Key on paper
  • After the generated key and bitcoin address, you should record them on a sheet of paper. The user then needs to securely hide it from prying eyes. Scan the password is risky: it increases its vulnerability. Even more reliable way is to encrypt the key using a special resource bitaddress.org. “Declassify” the resulting code is able only the person who knows the password, this creates another obstacle in the way of their fraudulent schemes.

  • Slicing key
  • Among the cryptographers practiced a special move called “secret sharing”. Its essence lies in the fact that the key is broken up into a certain number of components which do not contain valuable data. To restore the code, you must collect a specified number of its components. Even if you will be stealing one of the pieces of this “puzzle”, the master key remains safe.

  • Offline signature
  • This method is suitable to the user dealing with large amounts of cryptocurrency, it consists of the following steps:

    • installation on the first device hot wallet (without entering secret codes), this requires access to the Internet;
    • the formation of the transfer of funds;
    • copying the transaction file to another PC with the entered keys with wallet with support for signatures in digital format;
    • the signature of the transaction;
    • transfer file to a computer with Internet access and end of translation.

    The security of this method lies in the fact that the operations with the key are performed without Internet connection. It is recommended to backup the data in case of possible problems with the device.

  • Multipoles
  • This method is suitable for use in companies with large financial turnover. You create multiple keys, the number of which depends on the number of top employees jointly or severally liable. Thus, to use the means alone is impossible, to transfer the necessary signatures of all responsible.

    Speaking about cold wallets, it should be noted that despite their high level of reliability and security from attacks by cyber criminals, absolute guarantee the safety of the funds they give. Physical media is not insured against breakages and losses, so the user should take care in advance about backing up all necessary data.

    Hardware wallets

    A popular kind of storage for cryptocurrencies are hardware wallets which are small in size gadgets, developed specifically for the storage of bitcoins and other cryptocurrencies. These wallets boast a high level of security, they allow you to keep the private keys to access the coins separately from the equipment connected to the Internet. Jordan Tavener, the founder of the famous service Buy Bitcoin Worldwide, compared to the hardware wallet with a personal underground vault, equipped with armored door. What features create this brand new reputation as reliable device? Among the main advantages of the hardware of the purse should be highlighted:

    • the possibility of verification of transactions with the help of the screen, which also serves for data visualization required by the user;
    • easy in the settings of the gadget – setup is intuitive, even an inexperienced owner;
    • minimizing the risk of exposure to hacker attacks;
    • additional protection of the wallet with a PIN code that will not allow you to use the gadget attackers, if the wallet will be stolen;
    • compactness and portability.

    Popular hardware wallets

    Consider some of the hardware wallets, which has won the greatest popularity among fans of the cryptocurrency.

     

  • Ledger Nano S (https://www.ledgerwallet.com/)
  • This device confidently holds the leading position among off-line storage of electronic media. Ledger Nano S equipped with a screen and a stylish design. Besides, the gadget will not cause significant impact on the budget its future owner. The asset of this wallet should include the following advantages:

    • the ability to have full control over their funds from the owner in which the access to the stored bitcoin to third party “booked”;
    • offline mode scriptactive, which eliminates the risk of impact on their safety ON the computer.

    The disadvantage of this hardware wallet can be considered the need for constant inspection and testing to eliminate potential system failures.

     

  • Keep Key (https://keepkey.io/)
  • This hardware wallet on sale in 2015 and almost immediately gained popularity among cryptanalytical. OLED display Keep Key is large, which determines the possibility of a comfortable use of the device. The key benefits of the gadget should include:

    • support for these platforms as “Linux”, “Windows”, “MacOS”, “Android”;
    • the ability to work with many different altcoins;
    • integrated in the device application from the exchange ShapeShift, which you can use to exchange currencies;
    • safety when setting the parameters: the key is a system with a random generator;
    • the opportunity to work with such Bitcoin client like MultiBit, Mycelium and Ethereum.

    A significant flaw Keep Key is the dependence of its functionality from the software that is installed on the user’s computer.

     

  • Best wallet (https://trezor.io)
  • Wallet “Trehzor” can be called one of the pioneers among the “offline wallet” for cryptocurrency. With the help of this gadget you can safely work with the tools even if you connect the wallet to a computer infected with malware. The best wallet developers have taken care of providing the users the following possibilities:

    • the introduction to the algorithm underlying the work of the client, which creates transparency and increases the level of trust;
    • transactions with minimal risk of failure in the functioning of the wallet;
    • rapid installation, eliminating the complex registration steps;
    • the presence of characteristics of thermal and water resistance.

    Dependence “Trezora” the characteristics of software installed on a PC or mobile device, its relatively high cost can be attributed to the cons of this device.

    Conclusion

    Whichever of the presented purses to store cryptocurrencies have chosen the user, it needs to clearly realize that the safety of his funds not in the last instance depends on its responsibility and forethought. It is risky to rely on the specifications of the device. It is not excluded that in the near future the market will be gadgets with the function to interact with Baccano and other systems. That is, the connection will be via a separate Protocol, which will only support these devices. While this has not occurred, each holder crypto be sure to carefully store information associated with digital assets.

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