These digital wallets have become fundamental tools in the development of the world of cryptocurrencies.
This is for a very simple reason: we are talking about a world created by algorithms in which each cryptocurrency is a kind of digital asset which has to be “saved” somewhere. That site is the virtual wallet, where we can save them by taking different security measures such as creating private keys.
The names that we can designate to these gadgets of the network are many:
- Bitcoin wallets
- Cryptocurrency wallets
- Crypto wallet
- Bitcoin wallet
- Digital wallets
- Cryptocurrency wallets
And as many options as we can think of.
The important thing is the idea behind the matter. In other words, since we are operating in the virtual or digital world, we are going to need such a portfolio.
But beware, what we are going to be saving is the keys, which is what is necessary to spend our bitcoins, since with the first ones we have access to the previous ones.
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Ideally, that portfolio would be ours, as in the case of classic portfolios, but unfortunately on the internet we will have to trust this type of provider, for the moment.
What is the fundamental function and characteristic of a Bitcoin wallet?
The answer is obvious: keep our digital money in a safe place.
In the same way that digital wallets kept our tickets in our pocket, these digital wallets keep our Bitcoins, Ethereums, Ripples, in our digital spaces, since we will have a unique address for this.
Well, as we see, we are dealing with a subject in which security is very important, with which we are going to see that we can classify companies that work in this field according to their apparent security. I say apparent because we are talking about theory, and in practice things are still not entirely clear, at least in the world of cryptocurrencies, still in the making. It will take many years to see what they really are, the safest ways.
The least secure digital wallets are supposed to be exchange houses, followed by online wallets, their software applications and, lastly, cold or hardware-type wallets, considered the most secure.
If you follow me, you will have realized that security is a fundamental element in choosing a cryptocurrency.
In the same way that we choose a broker, a bank or a safe, we will try to choose the one that we believe will be most secure in the face of possible thefts, which are more common than we would like on the internet.
The other important variable in this case would be ease of use, which would be the inverse of security. In other words, the safest companies are those that would have, in theory, less ease of use.
Cryptocurrency exchange houses
These cryptocurrency exchange houses are the giants of the sector where we can make speculative sale and purchase in those markets and are the ones used by many of the traders who want to make their fortune in this world of cryptocurrency trading.
These types of companies are, therefore, focused on buying and selling, and we will even be able to open accounts with our FIAT-type currency, since they act like traditional stock brokers, for example, only that the cryptocurrency markets are not centralized in the exchanges. .
According to what has been seen with this type of exchange houses, there are many problems with server crashes and at least until now, there is more propensity to suffer hacks in these services than in the typical wallets of physical type cryptocurrencies such as Nano, for example. .
For example, many of these houses are some of the well-known names in the crypto world, such as: Poloniex, Bitrex, Kraken, Bitstamp, Coinbase , etc.
As the name indicates, this type of services or companies are already more specialized in the purse / wallet service.
Like brokers of a similar type, you will not need to install any software and we can use these wallets on your web servers, for which we will need access to the network with our mobile or computer.
Typically, they will generate a private key that we will then have to save preferably securely, such as on paper.
In these types of companies, the cases of hacks so far have been considerably less than in the exchange houses, but they are certainly not invulnerable to possible attacks.
Software type Bitcoin wallets
In this case I return to the example of brokers.
Like the case of Interactive Brokers , to put a case, we can download a platform to our computer or mobile and with it we can use the cryptocurrency wallet service in a way that always seems more professional.
To me, particularly in the world of brokers, I have always liked being able to carry out my operations on platforms of this type, although online platforms are more practical for simple trading, as in the previous case.
I suppose something similar happens in the world of digital wallets.
Although in this case, as it is quite simple, compared to doing technical analysis on broker platforms, I think that both types of platforms are equally valid.
In these cases we will have to have our computer or device as well protected as possible, because here security will depend a lot on us.
For example, here it is recommended not to browse rare pages and use quality antivirus , among other things.
This type of wallets is the widest on the market since we have many of the giants of it: Exodus, Electrum, Coinomi, etc.
Cold wallets or hardware type purses
As we can understand, we are talking about physical devices in which we are going to store our cryptocurrencies.
The classic type in this type of storage is that of the typical USB system with a small gadget similar to the previous one.
With this type of wallet we will already have to make a purchase of that item, which makes the product more expensive. This is recommended for people who have decent cryptocurrency portfolios.
Obviously, if you only have $ 200 in cryptocurrencies, there is little point in spending $ 90 on one of these gadgets.
Known cases of this type of wallets are: Ledger and Trezor.
Which Bitcoin wallet to choose?
Well, you will have to choose the one that best suits your needs and characteristics.
As the example I gave you, the hardware type are not suitable if you only manage a couple of hundred dollars.
Now, if you manage wallets of tens of thousands of dollars or euros, things change, and in fact it becomes imperative that you look for the most secure storage systems.
What’s more, a quite valid option on this subject is to diversify between different options so as not only to have the “eggs” more distributed, but also to see which one works best.
Despite everything you hear about hackers, do not think that these are so common, or at least not more so than the thefts of mobile phones and wallets on the street.
There is always the risk, both in the physical and virtual world.
In the current crypto market, however, the largest number of digital wallets available are software-type, especially with mobile installations that seem to be the most widely used system in the world.
Despite the fact that hardware types are reputed to be more secure, this does not mean that other types are not, or that there are some, in particular, as good and safe as any.
Cryptocurrency wallet trend
Going back to that topic, that of comparing virtual wallets with that of physical wallets, I think this is a crucial point to understand the importance of the trend we are entering here.
If we realize, the world of cryptocurrencies is slowly introducing what looks like the future of money.
What will happen in the future with traditional wallets?
Well, it seems that they are destined to disappear.
It seems that we are still far from it, at least in the whole world, but let’s not fool ourselves.
The advanced countries already have all the necessary resources to implement such a system.
Something that is still unthinkable, but that will be the final thrust for the traditional portfolio will be the adoption of the digital monetary system by the states of the advanced world.
In the future and using as an “excuse” the fight against money laundering, terrorism and the like, the states will end up forcing the creation of digital monetary systems in which it will be mandatory to have this type of purse, because a traditional wallet will no longer serve any purpose. , more than anything because physical money will be prohibited.
Time to time.
Meanwhile, I hope you choose the best cryptocurrency portfolio.