Playing with Cryptocurrency: Part 3- Wallets
What is a crypto currency wallet? It is basically the same as the wallet in your pocket. A cryptocurrency wallet holds your currency. There are three main types of wallets. The first is an online wallet with an exchange. The second is an app for a phone. And the third is a hardware wallet. Actually there is also a paper wallet and desktop wallet, but I’m not going to go into those.
This is usually linked to an exchange. Think of it like going to your bank account online and transferring money in and out. That is what this would do. The difference between an online wallet and your bank, however, is that your bank is insured by the government. So, if someone steals the money out of it, the government will cover the const. A cryptocurrency wallet isn’t insured. So if someone steal your money from it, you are screwed.
A Mobile Wallet
This is an app on your phone. The nice thing about mobile wallets, is the currency is stored with you. You can take your phone out and use the mobile wallet to pay for things and make currency transfers. But, since this is stored on your phone, if you drop or break your phone you might say goodbye to your money. So, if choosing a mobile wallet find out if there is a way of backing up your currency. Then if if the phone gets lost, stolen, or broken you can recover your money.
Of the three listed here, this is the most secure. This is a small USB flash drive that stores your currency. The drive is secured and password protected so that only you can use it. The catch with this is, don’t break it or misplace it. This is the recommended method of storing your cryptocurrency if you have large sums worth.
Now, that I have my online exchange which wallet should I use? For my experiment, I decided to go with a mobile wallet. If for some odd reason I become rich in cryptocurrency, I might switch to a hardware wallet. And, with currency exchanges getting hacked as often as they are, I wanted to avoid losing what little money I have. The wallet I chose is jaxx They support a large selection of currencies and setting up the app was pretty easy. At the moment there are dozens of cryptocurrency wallets so you have plenty to select from.