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Cryptocurrencies have become such an important part of our news and economy lately that there is hardly a press release commenting on the rise in the price of some currencies, the fall in the price of others, or the global change being driven by these currencies and their holders every day.
These are the reasons that have led us to research and write about various topics in the world of blockchain and bitcoin that we know are the future of business and life.
After writing many articles about simplifying blockchain and digital currencies, especially bitcoin; It’s time to talk about one of the world’s hottest topics, which is cryptocurrency ownership.
What are digital currencies?
In short, digital currencies are currencies like pounds, riyals, dirhams, and dollars, but they are non-sovereign and non-institutional, and their value is not tied to assets like gold or oil.
Rather, their values are entirely determined by supply and demand and are often decentralized; That means no state, institution or even a bank can see the details of your transactions or receive commissions from them.
The biggest advantage – or in the eyes of some, the biggest disadvantage – is that digital currencies have no real existence, they are digital, that is, they are codes and ciphers, and that makes their operations instantaneous and easy to transfer any amount of money and it arrives immediately, no matter how much and where you transfer.
As with traditional currencies, you’ll need somewhere to store your digital currencies, but since they’re digital and have no physical presence, you certainly can’t put them in your regular wallet or on one of the wallet’s shelves of the closet, or even put them in a closet!
Important terms about cryptocurrency wallets
Cryptocurrency wallets are not an easy topic at all, but it’s not impossible either, and in order to understand it and know what the experts mean when they talk about the best cryptocurrency wallets, you need to be familiar with some jargon:
private key
Private keys are the most important thing in cryptocurrency wallets and many comparisons are based on them as we will learn later and these numbers should only be known to you as they are the key to your account and digital currencies and if there is a hacker or a thief accesses it, he can easily steal your money and dispose of it as he pleases.
wallet address
A digital wallet address is a code generated by running hashing algorithms twice, which is similar to the process of turning the private key into the public key… It’s a one-way street, meaning no one can get the public key from the wallet address , and you can send this wallet address to other people to transfer cryptocurrency to you.
Seed phrase:
A seed string is like a backup for your cryptocurrency wallet, a security measure in case you forget your private key or your wallet is damaged in some way, and it’s a phrase of 12 or 14 words that you can use to somehow access your cryptocurrency access.
Cryptocurrency wallets usually provide your seed strings and ask you to store them, store them and keep them in a safe place.
Although the seed strings are a protection method, anyone accessing them puts you at risk of losing your cryptocurrency and all your savings.
Hot wallets:
Hot wallets are digital currency wallets that are connected to the Internet regardless of their form, and this makes these wallets practical as operations through them are simple, easy and fast, and cold wallets are two major classifications of digital currency wallets and we’ll talk a lot about it.
Cold wallets
Cold wallets are offline wallets, unlike hot wallets, and their advantage is that they are more secure and almost immune to hackers, and that is because they are not connected
It depends on its physical presence, as we will see when we talk about the types of cryptocurrency wallets in detail, and it is worth noting that cold wallets are the best choice for long-term investors.
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