Here is the guide you all were looking for! Guarda Wallet presents – what is a cryptocurrency wallet and how to choose one.
What is a cryptocurrency wallet?
A cryptocurrency wallet is, first of all, a program. This software is meant to store your private and public keys, interact with blockchains and enable users to manage their crypto coins and tokens. So, if you are about to use any crypto – Bitcoin, Ethereum, Litecoin, Ripple, it doesn’t really matter – you will need a secure wallet.
How do cryptocurrency wallets work?
There are millions of people around the world using cryptocurrency wallets daily. However, only a small number of them actually understand how these services work. You see, crypto wallets do not really store your coins. Let’s break this down. If you put money into your ordinary wallet, it is literally in there. If you “put” some funds in the cryptocurrency wallet, your BTC (or any other currency) does not get located there. In fact, cryptocurrencies cannot be stored anywhere at all, as they exist on a blockchain and do not have any physical form.
A cryptocurrency wallet is a mediator helping you interact with the blockchain and keep your data safe. With your wallet, you can check the balance, send or receive funds, exchange cryptocurrency and perform other blockchain-related actions.
If your friend sends you some ETH or any other coin, they are just making you the owner of the coins. To access and manage the funds, you need a private key. The private key is stored securely in the wallet itself (you can check how to access Guarda Wallet private key in here). If the public key and the private key match, the transaction will be performed.
Cryptocurrency wallet types
There are several types of cryptocurrency wallets for a user to choose from. Majorly, there are three categories – hardware, software, and paper. Software wallets can also be of various kinds: Web, Desktop, Mobile or Chrome Extension. As Guarda wallets are software, we will cover these types a little bit deeper.
Web Wallets are accessible from any device. It is usually said that online wallets are more vulnerable, but if the service you are using is non-custodial, you should not encounter any problems with your cryptocurrency wallet. A reminder – custody-free wallets do not have access to your personal data (including private keys and backups), so you are the only owner of the funds.
Desktop Wallets are meant to be downloaded and installed on your computer. Due to the fact of them being a program, the Desktop cryptocurrency wallet you are using is only accessible from one device. Desktop wallets are a secure pick – just make sure to get good cryptocurrency wallet providers!
Mobile Wallets are applications that help you manage your funds on the go. Guarda Mobile wallets have the same functionality as the Web and Desktop versions. Our wallets are lightweight and perfect for mobile use. Just like their “big brothers”, Guarda Mobile wallets have exchanges, purchases, and cryptocurrency special features.
Chrome Extension cryptocurrency wallets are meant to help you use dApps (decentralized applications) or make speedy cryptocurrency purchases online. An Extension cryptocurrency wallet appears on the top right of your browser – you can access it anytime you need to make a transaction and save a good amount of time from redirecting.
How to choose a cryptocurrency wallet?
The level of your crypto wallet security may hugely vary. Before you have chosen a cryptocurrency wallet, you need to pay attention to some important factors:
- Choose non-custodial wallets. As we have already explained before, the wallet providers do not have access to your personal information. Custody-free wallets do not have an option of your data leaking somewhere or being stolen in a hack. Overall, having a non-custodial cryptocurrency wallet enhances the security level drastically.
- Do your research. Check the social networks of the wallet you would like to start using. Is the development team active? Do they answer the questions of their community? If yes, do not hesitate to ask something and get familiar with the people behind the wallet. Besides, it is quite handy to check the reviews for your cryptocurrency wallet on various platforms.
- Check the support line. If you are new to the cryptocurrency world, you may stumble on many situations in which you need help. This is what wallet support is for. If the customer service of your cryptocurrency wallet works efficiently, it is a great karma point for your wallet provider.
- Decide upon the wallet type. You can see that there are many types of wallets available on the market. First of all, decide whether you would like to have a single-currency of a multi-currency crypto wallet. Generally, multi-currency wallets are handier – you do not have to have a bunch of separate programs for each of the coins you are interested in. Then, choose the platform. A note here: Guarda wallets work across various platforms, so, in most cases, you do not need to worry about getting stuck with one computer or smartphone.
- Try out the wallet and check its functionality. Some wallets for cryptocurrency are not functional enough. Sure, they keep your coins, but they do not have purchases, exchanges, and other perks. If you are interested in having those, it is better to check everything before jumping on a bandwagon.
After checking all the abovementioned features and proving that your wallet of choice is worthy, you can be sure you are about to start your crypto journey safely!