Thanks to the crypto boom in 2021, the term ‘cryptocurrency’ has become word of mouth. The concept of digital assets is investing more in new-age investors than ever! Today, almost everybody wants to be a part of the crypto industry and reap up to 100x profits in no time.
However, the crypto industry isn’t just any random website where beginners can enter and start their journey. To kickstart your journey as a beginner, you first need to know the basics. Among the first things to do is obtain an Ethereum wallet.
Being a fresher, we understand your confusion around Ethereum wallets, their functions, and what they are. So in this article, we’ve briefly listed what a cryptocurrency wallet is and how it works, particularly on the Ethereum wallet. Let’s get started.
But, What Is An Ethereum Wallet?
In simple terms, a crypto wallet is a digital piggy bank, one that is used to store all your digital assets safely. These wallets are tools, or rather software, based on cryptography and capable of memorizing the public and private (secret) keys used to receive or send tokens, i.e., to sign transactions made in cryptocurrency.
Now, talking about ‘Ethereum’ wallets, it is a piece of hardware or software that allows the users to interact with the Ethereum Blockchain. Without it, it is impossible to demonstrate ownership of digital assets; thanks to them, the Blockchain works, or rather, fully expresses its functionality. All transactions within the online exchange are possible only if you have a wallet, and one of the most important is the Ethereum wallet.
Besides, just as you try to protect your physical wallet or bank account, you must also take all possible precautions to keep your digital wallet safe. Therefore, several parameters must be considered when it comes to guaranteeing and protecting the security of the cryptocurrencies stored therein.
Essential Characteristics Of An Ethereum Wallet
These are the parameters considered during our evaluation, the fundamental properties you should look for in any wallet.
- Ease of use
- Safety
- Customer care
- Cryptocurrencies available
- Privacy
Ease Of Use
The so-called usability is essential to keep in mind when talking about cryptocurrency wallets. It becomes even more so if whoever deals with cryptocurrency wallets is a neophyte.
In general, if a tool such as an Ethereum wallet is not easy to use, it will likely not attract many users. Unfortunately, currently, there is no shortage of choice: the number of suppliers has grown to a truly incredible amount, and not all of them emphasize ease of use.
Overall Security
In cryptocurrency trading, the level of security you can rely on plays a central role. Especially if you are starting in this fascinating world, or if you haven’t traded for a long time, if, in short, for one reason or another, you are not able to weigh all the risks well, you should make sure you are well protected.
Along with ease of use, security is the focus when using a cryptocurrency wallet. Fortunately, it is easy to recognize the characteristics capable of giving clues on this aspect. Some examples are 2-factor authentication or the ability to make regular backups.
Customer Service & ‘Control’
Good customer service is another essential thing, especially for starters. An Ethereum wallet with good customer service can help the user in any problematic situation and, possibly, at any time of the day or night, is not an element to be overlooked.
Especially at the beginning, in fact, but not only, new traders often encounter obstacles. This problem may be linked to the specific terminology in use and, therefore, easily overcome. But, of course, it can also be a costly problem if not resolved.
Typically, good customer service is tied to a capable and motivated team of developers. Regarding the control issue, a factor that must be paid attention to is the “key,” or one’s secret access key.
Available Cryptocurrencies
Another key feature when creating an Ethereum wallet is the selection of available digital currencies. In particular, this aspect is significant for those who also want to trade one or more less popular and widespread tokens.
Since the cryptocurrency market fluctuates continuously, many providers constantly expand their offerings. For this reason, keeping up to date with news is always good.
Anonymity & Privacy
For a small number of users, anonymity and privacy are also important. In this case, it is preferable to take advantage of a reality where transactions are constantly provided with new addresses, thus making them much more difficult to trace.
Those who want to remain anonymous, or as anonymous as possible, will also have to pay attention to the data they must enter when registering. In addition, there are notable differences between providers in terms of privacy, already upon registration.
Different Types Of Ethereum Wallets
For those who want to open a cryptocurrency wallet, you are spoiled for choice, as many types of wallets are available. Let’s explore them in the following section:
Online Wallets
The most common form of the digital wallet is the so-called online or hot wallet. They are often found directly on broker platforms; in this case, brokers who trade Ethereum are being discussed. To trade regularly every day, they are the most practical solution.
Also, you don’t need to download a compute-intensive blockchain to use online wallets. Online wallets have the great advantage of being free, which makes them, together with their ease of use, the most used by users. Furthermore, useful mobile apps are now available to access wallets anytime.
On the other hand, however, they present more significant risks in terms of security, even if there have been no reports of hacker attacks on these wallets for quite some time now.
Wallets On Computers And Mobiles
Many other providers allow the user to save a program directly on the computer, i.e., on their desktop, which is why these wallets are also known as “desktop wallets .”These software solutions allow you to manage your currency on your PC.
When choosing this option, you should protect your PC as much as possible due to the danger of viruses, malware, and hacker attacks. The same goes for mobile wallets because it’s easier to lose a smartphone than a laptop.
Hardware Wallets
This option guarantees the highest level of security: the virus infestation on the PC, in this case, would not play any significant role on them.
These cryptocurrency wallets are also known as cold wallets. The keys are memorized using devices specifically designed for this purpose and therefore are never online: connect the device in question to your PC only when the keys need to be used.
Some even have a screen that displays private keys, addresses, and wallet balances. These wallets are great for long-term storage and are perfect for saving the so-called “seed phrase” for restoring the wallet should it ever be lost. However, a hardware wallet is associated with a relatively high acquisition cost.
Paper Wallet
To make them easier to keep, they can be encrypted in QR codes, but in any case, they must be kept in very safe places, preferably a safe.
In addition to the paper wallet, there is another offline solution: have you ever heard of the so-called “brain wallet”? In this case, it is assumed that only your memory is used to store the string of numbers, letters, and symbols.
If you can memorize a 40-digit string and never forget it, you have discovered the safest type of wallet. If you choose this option, you must know everything is solely entrusted to your memory.
Ethereum Wallet – Conclusion
So if you want to access tokens in the cryptocurrency market, an online wallet is the best solution. Also, consider downloading a mobile phone version in addition to all the elements mentioned in this article.
On the other hand, those who need to keep a large sum of Ethereum or other cryptocurrencies should consider a hardware wallet to keep safe, ideally locked in a safe.
