Cryptocurrencies are constantly growing in importance. Bitcoin is the most important and widespread currency. The major players in the economic fields have also begun to pay attention to this important technology.
The field of cryptocurrency has become more and more attractive to the general public. Even small investors who do not have a technical background are starting to take an interest in investing in Bitcoin and other cryptocurrencies.
One of the most important tools that any user needs to deal with Bitcoin and other digital currency is the wallet. As its name indicates, digital currency wallets are tools used to store currencies to protect them and facilitate access to them later.
Cryptocurrency wallets are used to store these currencies. Cryptocurrencies cannot be considered a tangible asset like the cash you carry in your pocket. Rather, those coins are nothing more than a few codes stored in the blockchain network.
For example, each currency, Bitcoin, consists of a set of codes – or code – different from any other currency. That is why every coin within the network is unique by default, which on the other hand is easy to track.
Based on the above, you can understand the idea of cryptocurrency wallets. It is a wallet that allows you to keep your currencies’ code or tokens for them. Although it seems complicated, it is not.
This is where Bitcoin wallets provide an easy-to-use experience similar to banking applications on smartphones. Anyone can trade their currencies very easily at any time.
How to hold digital currencies
Users usually buy Bitcoin, Ethereum, and others through sites that offer this service. Which can be described as an exchange or currency exchange service. Where the user pays an amount of money in dollars, euros, or any physical currency in exchange for an equivalent amount of bitcoin or Ethereum.
Of course, when you buy your cryptocurrency through these platforms, it remains within your balance on the platform. Perhaps this has made users wonder about the need to buy wallets in light of the possibility of holding coins on those platforms.
Perhaps the answer to this question is simple. Leaving your cryptocurrency on cryptocurrency buying platforms makes it an easy target for hackers. Because hacking the platform will result in hacking all the accounts on it, and losing money from it.
Cryptocurrency wallets are divided into two types. Hot wallets, cold wallets. The first is known by this name because it is connected to the Internet. These wallets usually come in the form of easy-to-use websites or apps.
Cold wallets are completely disconnected from the network, and therefore more secure. These wallets can come in the form of PC applications or in physical form.
Physical cryptocurrency wallets are the most popular and secure type. Which comes in the form of a flash memory that can be connected to your devices via the USB port. Each wallet has its own secret number that prevents access to its content except its owners.