Cryptocurrency Wallet is a program that offers a solution for storing, sending, and receiving various cryptocurrencies, such as the Patreon Token. In order to be able to choose the most suitable wallet, you will need to consider a number of factors. This post can help you make the right decision.
- What is a cryptocurrency wallet?
- What is a seed phrase?
- Custodial and non-custodial wallet
- External links
What is a cryptocurrency wallet?
The cryptocurrency wallet, as I mentioned earlier, is a program that is also capable of sending, receiving, and storing various cryptocurrencies, such as the Patreon Token. These are solved by the wallets interacting with the ledger of the given cryptocurrency, ie the block chain. these programs are available for desktops, cell phones, and even stand-alone hardware.
Cryptocurrency wallets can be said to work similarly to emails. If you want to send or receive email, you will need a program (eg Outlook, Gmail). Just like receiving emails, you will need an address to receive Cryptocurrencies such as the Patreon Token. And like your email address, feel free to share it with anyone to send you cryptocurrency.
For example, this is a Patreon Token address: 0xe48eF3C5025105c44c4628337F4b34B52f6C3ecA
But before you get your address, every time you create a wallet you will get a private key or seed phrase. Like your email password, never share it with anyone.
If possible, store the private key or seed phrase offline. It is best to store it in a safe place on an external drive detached from the machine and written on a piece of paper.
What is a seed phrase?
Nowadays, a 12-24 word easy-to-remember initial term is used instead of a private key. This is called a seed phrase. When you create a new wallet, the seed phrase is automatically generated and must be recorded in the same way as the private key, as it performs exactly the same function. It is important to know that the person who owns the seed phrase has control over the wallet.
The private key is a long sequence of letters and numbers that gives you access to your cryptocurrency wallet. Whoever owns this secret code exercises control over the wallet. The cryptocurrency address is created by the wallet from the private key itself. However, the private key cannot be decrypted from the wallet address. So it’s completely one-way.
For example, if your phone is stolen and you had a cryptocurrency wallet on it, but you memorized the seed phrase, don’t worry. With a seed phrase, you can restore your wallet and access your assets again at any time.
Important: Always store the seed phrase in a safe place!
Custodial and non-custodial cryptocurrency wallet
In this respect, it can be said that there are two types of wallets that do not give leave and those that give full leave.
An non-custodial wallet is where only you can access the seed phrase or private key. It is solely and exclusively under your control. In this case, you get complete freedom and all responsibilities are yours.
Excellent examples of unguarded wallets: Metamask, Trust Wallet
A cryptocurrency wallet in custody is most similar to a bank account. In this case, your seed phrse or private key is in the hands of a particular company. By doing so, they exercise control over your cryptocurrency, so you are fully out of service.
There are several dangers to wallets in custody. For example, a company goes bankrupt, freezes your account, commits fraud, or steals your cryptocurrencies. In such cases, you may even lose all your assets.
Important: If you store your cryptocurrencies in a wallet that is in custody, find out carefully about the company that operates them.