Posts Tagged ‘Cryptocurrencies Hardware Wallets’

What is a cold wallet or hardware wallet, and how are they different from hot wallet?

Monday, October 12th, 2020

If you have ever spent time reading cryptocurrency forums and discussions, you have most probably heard of cold wallets and hot wallets. Cryptocurrency enthusiasts and experts have had long debates on which wallet is better. This seems to be an ever-growing argument, one that will probably never end.

Today, I will talk to you about what cold wallets and hot wallets are? How are they different from one another? And which one should you choose?

First, let us talk about the basics, and then we will move on to the comparison:

The basics:

Cold wallets are physical devices that you can buy from the market or online that you use to store and manage your cryptocurrency. While hot wallets are not physical devices but are rather digital cryptocurrency wallets. There are other wallets in the market as well. However, these two are the most commonly used.

Hot wallets:

Digital currency wallets have existed ever since the creation of Bitcoin. Hot wallets are found in two forms, online and desktop wallets. You can also download these wallets on your IOS and Android devices. Mobile hot wallets are often considered as hybrid wallets because of their mobility.

The best thing about owning a hot wallet is the fact that they are completely free and can hold all digital currencies.

First, let us discuss “the all crypto holding” factor. An ‘” ICO” is created every time a new cryptocurrency comes into the market. The ICO is only functional if there is a place to store it. People who create digital currency are usually the same people that also make a wallet to support it.

The more common cryptocurrencies like XRP, Litecoin, and Ethereum all have different digital wallets for them as well. Each wallet has its unique functions, customization, and features to choose from. Less popular or less common cryptocurrencies mostly have one wallet with basic functions such as trading, selling, and buying.

An important point for hot wallets is the fact that they can hold less common and new cryptocurrencies, while cold wallets do not offer this feature.

Another point that makes hot wallets popular is the fact that they are free to use. All you need to do is find a hot wallet that matches your needs and then register to use it. The free factor is the main reason why these wallets are so popular, especially for the new crypto users.

Cold wallets:

As I have mentioned before, cold wallets are physical, digital currency holders. Cold wallet devices are lightweight, compact, and easy to carry, so you can take your crypto wherever you need to go.

However, these wallets are not free, and they are not that cheap either. A cold wallet can set you back at least $100 or more for a more advanced device.

Another con of cold wallets is the fact that you can only store a small variety of coins. Other than OPOLO wallets, that lets you store over 109 cryptocurrencies, most cold wallets only let you store mainstream cryptocurrencies.

Why do people buy cold wallets, when hot wallets are free?

After reading the statements above, you might be wondering why anyone would buy a cold wallet, when hot wallets are free and offer more services. The answer to this question is simple, it’s the security!

I did not mention this feature above because it is so important that it deserves better representation, rather than a small explanation.

If you have been following digital currency news, you would have noticed the many stories related to cryptocurrency hacking. People have lost thousands and millions of dollars through crypto hackers.

Hot wallets are extremely vulnerable to hack attacks!

All hot wallets store your credentials on a cloud or an online server. As we already know, online servers are not that difficult to hack. You could be a victim of malicious software or a scam, and you can even just be a target to someone who knows your digital currency worth.

Even though most hot wallet websites have taken many security measures to ensure the safety of your crypto. It only takes a small loophole, such as a website update, to lose all your digital currency. This has happened before and will continue to happen in the foreseeable future.

Some websites like coinbase offer 100% insurance if you use their hot wallet. However, this is quite rare and is quite reassuring. But other websites can also scam you with the same promise.

Most hardware wallets such as OPOLO have taken such extreme security measures, even if you connect your cold wallet to a corrupt computer system. Your digital assets still cannot be hacked.

Conclusion:

When choosing a digital currency wallet, be it hot or cold, security should be your first, second, and third priority. For that very reason, I will suggest that you choose a cold storage wallet. However, if you are completely new to the crypto scene and are not heavily investing in digital currency, you can opt for a hot wallet to learn the trade. But, once you start spending big in the world of crypto, always choose a cold wallet!

What is Cryptocurrency? (A beginners guide to all you need to know)

Friday, October 2nd, 2020

Cryptocurrency is an online digital currency that is used for the exchange of goods just as fiat/paper currency is used. Cryptocurrency is backed by cryptography, making it impossible for these coins/tokens to be double spent, copied, or faked. In more simpler terms, cryptocurrencies are a finite number of entries on a database, and these entries cannot be changed until certain conditions are met.

Cryptocurrencies are backed by blockchain technology, which is an online public ledger where all transactions related to cryptocurrencies are stored and are completed by a collection of computer networks. People who make these transactions happen are called miners. These miners receive a small amount of cryptocurrency for their services. For example, a bitcoin miner will receive payment in bitcoin, while an ethereum miner will receive payment in ethereum.

 

Background: (history of digital currency)

 

You may be surprised to know that bitcoin wasn’t the first digital currency to exist in the world. Back in the ’90s, technological boom companies tried to produce and distribute digital currencies but failed. Digital currency systems such as Flooz, Beenz, and Digi cash stepped up in the market but eventually failed. There were several reasons for the failure of these currencies; some of the most common ones were; frauds committed by companies claiming to be them, lack of resources, and tension between company employees and their bosses.

 

Crypto History

All of these companies also used a reliable 3rd party approach, which means that companies supporting these currencies were trusted, verified, and facilitated transactions. However, because of the failures of these companies. People just did not trust digital currencies anymore, and this idea was seen as a lost cause for a while.

But, innovation needs only a few or one committed and skilled individual. A man people can get behind and make magic happen. For a digital currency, this man or group (still unknown) went by the alias of Satoshi Nakamoto, who gave the world bitcoin, the very first successful cryptocurrency in the world. Satoshi developed a person to person electronic cash system. A system that is 100% decentralized, which means there is no controlling authority or hidden servers. This currency is for the people, run by the people, and is visible for everyone to see.

 

How does cryptocurrency work?

 

A decentralized network such as bitcoin requires each individual to do his/her part to make it work. This is where the term Blockchain comes in. A blockchain is a public ledger of all the transactions that have ever happened on the network and will happen. This ledger is publicly accessible, meaning anyone with a computer and internet connection can get access to it.

 

Cryptocurrency

Each transaction that occurs is made up of senders and receivers public keys (a combination of random computer-generated numbers & alphabets) and the number of coins transferred. The sender must also sign off the transaction by his generated private key. This process is known as cryptography. Then after a bit of time, this transaction is made public. However, for this transaction to be completed, it first needs to be confirmed.

Now, this is where the cryptocurrency miners come in, and only miners can confirm a transaction. This is done by solving a cryptographic puzzle. The miners make these transactions legitimate and then spread them along with the network. After which this transaction is added to the database. When this transaction has been confirmed, it becomes unchangeable and cannot be reversed no matter what. For doing this, the miner receives a reward and a small transaction fee.

The entire cryptocurrency network is based on trust and the agreement between all parties involved over the legitimacy of all balances and transactions. Each individual acts as a cog in a machine; without one cog, the entire machine breaks down. But there is no reason to worry, as rules are built and programmed into this network, these rules prevent this system from breaking down.

 

The legal side of cryptocurrencies:

 

As digital currency is becoming more common around the world, financial institutions of almost all the countries in the world are trying to understand this fairly new concept of money better. These law enforcement agencies, tax collectors, and judicial systems are all finding ways to incorporate these currencies in their economic system.

Legal Cryptocurrency

Ever since the emergence of bitcoin as the first useable and trustable cryptocurrency. There has been a lot of concern over its decentralized nature and the anonymity that comes with its use. Financial institutions around the world are concerned that people will use these digital currencies to obtain illegal services. These institutions are worried that individuals can use this form of currency to do money laundering, tax evasions, and purchase illegal items without any fear of being caught.

There are a few countries in the world that have banned cryptocurrencies in their economy. A few examples are Bangladesh, China, Russia, Vietnam, and Bolivia.

 

How to store cryptocurrencies?

 

If you are a user, fan, or just a geek, you must have heard that millions of dollars’ worth of cryptocurrency have been stolen through online frauds and hackers. The digital currency being virtual is stored differently than standard currencies.

Technically, when you store cryptocurrencies, you are actually storing its private keys, these are used to sign off transactions. These keys need to be securely stored. People write these keys on pieces of paper, save them in USBs or files in their computers.

However, the safest way to store cryptocurrencies is through the use of a hardware or cold storage wallets. Hardware wallets have become very popular in recent times, as these wallets are completely offline. Moreover, these hardware wallets are encrypted with passwords and key phrases.

Even though these hardware wallets are safe. Some are safer than others.

 

How to choose hardware wallets?

 

OPOLO Wallet

 

Here is a list of things you should look for while choosing a hardware wallet:

⦁ It should have a minimum of EAL6+ security certification for both hardware and software( most only have it for one)

⦁ It should have multiple currencies integrated within it.⦁ It should have a screen size that is easy to use.
⦁ It should have long passphrases and keyphrases for access
⦁ Its mnemonic system must be secure.
These are the basis upon which you should choose your cryptocurrency wallet.

Have no product in the cart!
0