While cryptocurrencies like Bitcoin and Ethereum become more and more integrated into our daily lives, the decision of what crypto wallet you should use has never been more important.
But this important decision can oftentimes be confusing and intimidating for beginners or “newbies” in the cryptocurrency world. For too many people, it’s unclear as to which wallets do what and where to go to find the best and safest wallet providers.
Today we will cover the basics of digital wallets and clear a few things up.
What is the main function of a cryptocurrency wallet?
To understand crypto wallets, you need to understand the basics of how cryptocurrency works, and in that, you will understand that the e-wallets used to store digital currency aren’t actually storing any coins themselves.
Instead, they interact with a blockchain network and generate the data and information needed to send and receive cryptocurrency.
Keys and addresses
The important information that makes a cryptocurrency transaction possible, is the pairs of both public and private keys and an alphanumeric identifier, referred to as an “address”. An address is what specifies where or who on the blockchain cryptocurrency will go to during a transaction.
Private keys are used to gain access to a specific wallet, and should never be disclosed or shared. But what happens if you lose your private keys? You’re locked out of your cryptocurrency stores - that’s what.
In case of getting locked out of your cryptocurrency wallet, a coin base wallet recovery service or any other reputable recovery service can help.
Different kinds of cryptocurrency wallets
There are various types of crypto wallets, all with different pros, cons, and specialized purposes. Some are more secure than others. Let’s go over them now.
These hardware wallets are actual physical hardware devices. Most hard wallets are essentially USB sticks that you can insert into a PC. Hardware wallets are one of the more secure forms of wallets, as there is no threat of cyber-attacks, yet are still vulnerable to theft, misplacement, or destruction.
Some note that hardware wallets aren’t very beginner-friendly. These wallets usually cost anywhere from $70-$150.
Hot wallets and cold wallets
Whether not a cryptocurrency wallet is hot or cold depends on if it’s connected to the internet or not.
A hot wallet has an internet connection and therefore offers higher ease of use. These wallets are fairly easy to set up and allow users to quickly access their funds on a daily basis. But unfortunately, the internet connection that comes with hot wallets, also makes them more vulnerable to attacks.
In contrast, cold wallets are stored offline and don’t require any internet connection in order to function. This obviously increases the security level and consequently, people often use cold wallets for storing large amounts of currency that they don’t plan on moving around much.
Many people often choose to use hot wallets for smaller daily transactions, and cold wallets for their larger sum of savings.
Web Wallets like Coinbase
Web wallets are crypto wallets that are accessed through, you guessed it, the web. Although web wallets are not as secure as hot, cold, or hardware wallets, they do in fact offer the highest ease of use. Web wallets like Coinbase are best for those that plan on making small transactions and want to gain access to their wallet quickly.
Coinbase wallet recovery services are experienced in regaining loss of access to web wallets, so not all hope is lost if you lose one of your private keys.
An important takeaway - understanding wallet recovery services
Losing your private keys isn’t the only instance when a Coinbase wallet recovery service would save the day. A person might find themselves in a load of trouble if they accidentally, delete their wallet, experience a hardware failure or data corruption.
Coinbase wallet recovery services and others like them are essentially companies that can help people get access to their wallets again.
Through brute force attacks, these cryptocurrency wallet recovery service providers try millions of passwords in rapid succession through the use of algorithms and specialized software.
Deciding where you store your digital coin is an important part of the cryptocurrency process. Each person will require a different kind of wallet, based on what their needs and expertise levels are.
While some wallets are more secure than others, the risk of losing private keys is always present, and therefore, Coinbase wallet recovery services might just save your finances someday.