Take Care of Your Investments!
If you are thinking about investing on bitcoins and other cryptocurrencies, besides choosing between all of the different types of electronic currencies out there, the next thing you need to consider is the electronic wallet that you will use to save your investments. There are multiple options on the internet but you need to select one that fits best with your needs, so we will give some keys to select the perfect electronic wallet for you.
1. Understand How Electronic Wallets Work:
First, we need to clarify that an Electronic Wallet is the digital place that stores your cryptocurrencies. It’s the equivalent to a bank account, because as an owner, you have a unique number from where you can make or receive transfers. They store the necessary private passwords to access the registered balances in a public password of the correspondent block chain to make use of them.
2. Find a safe and easy-to-use Electronic Wallet:
Currently, you can classify several types of Electronic Wallets according to these two aspects. However, security and accessibility are not directly related. In this manner, is very common to find electronic wallets with the highest security standards but very complicated to understand and use. Conversely, we can find the easiest and most practical electronic wallets but not necessarily the safest ones.
3. Know the different ways to Store your Cryptocurrency:
The exchange houses:
They are the most used and act as a cryptocurrency “bank”, because the users introduce their actives in an assigned address and then, this type of electronic wallet is in charge to manage them. They move the money of users to one or even more central wallets. From that point, they follow payment instructions, sells or purchases of their clients.
This type of electronic wallet is useful for the exchange between cryptocurrencies and fiduciary money. However, these services are more likely to hacking, fraud, service falls and other risks. In these cases, the money can appear as “unavailable” or simply disappear for no reason. Besides, they tend to change their terms and conditions under their own rules, closing accounts and generating other inconvenient to users.
As some examples, we have:
We are talking about websites that let users to move their money in an independent way. They have exclusive control of their private password and without the need to install any software. In this type of electronic wallet, the page generates an abstraction of the private password in form of 12 or more words called “seed” or backup. The user has to write this series of words in a paper or another resistant and offline place to safeguard its money.
In online wallets, there is less probability to be hacked, but still users suffer the risk that some hacker installs a malicious code in the website and steal all the “seeds” from the users to access the page. The unavailability of funds is still a problem in these wallets that can suffer from temporary falls for different reasons.
As some examples, we have:
You can install this software in computers and mobile devices. They work as an interface to visualize the balances and move the money in the addresses that any user owns. They can generate a new seed or use a previous backup and they allow the activation of a code or extra password in a software level to move the actives.
These apps eliminate the problem of unavailability of the money, unless you don’t have your device with the software at a determined moment. They transfer the entire security responsibility to the owner who will be in charge to keep its device free from virus. Avoid entering in insecurity pages, connecting to free Wi-Fi networks or inserting pen drives or any other external device in the system.
As some examples, we have:
They are in the top of the “pyramid” that we mentioned before. This means that they have high security standards but it may take a while to learn how to use them properly. Cold wallets are hardware or physic devices that store the private password of the associated counts offline. This allows making transactions without exposing the “seed”.
These wallets are very similar to a pen drive, because you connect them to the computer through a USB port. They represent the most secure way to store cryptocurrency and send them even in insecure environments like third-party computers. Hardware wallets are the only electronic wallets that generates a direct cost for the user. You can find them from 50$ onwards.
Some recognized brands are:
- Digital Bitbox
4. Identify your needs and possibilities:
There is no such thing as “the perfect electronic wallet” that adapts to every person. Each one of them comes in different platforms with diverse features. Electronic wallets contain private passwords, secret codes that let you make use of your cryptocurrencies. In this manner, bitcoins are not the ones who need to be stored and protected, but the passwords that give you access to them.
In this manner, know that an electronic wallet can be an app, a website or a device that manages your private passwords for you. It’s very important to consider your needs and select the one that gives you an appropriate balance between security and practicality. With bitcoins or any other cryptocurrency, you have the privilege but at the same time, the responsibility to safeguard your own money!