I am writing a series of articles, to assist non-technical users and newbies to the world of Crypto to understand more technical concepts. My main goal is to enable the non-technical audience to have conversations with the more technical audience.
How do we manage our money currently?
We have been carrying wallets in our pockets for many years. This is not the most secure way, but we need to carry some Fiat Currency or cash to spend. A little more secure way which we use to safeguard ur money, is to our it in a bank , and then use debit and credit card facilities the transactions we do.
What is a Crypto Wallet?
A Crypto Wallet is nothing else than a secure digital version of our wallets. I am sure we have all seen that there are hundreds of different crypto currencies out there and the majority of these each has their own wallet. Crypto wallets are used to send and receive digital currencies or tokens.
We need to understand that there is no actual currency in a crypto wallet. The only things that is stored in a wallet, is a private key, which is a digital security code which only you know and should never ever lose . The private key shows ownership of a Pubic Key, which is a digital security key linked to a certain amount of crypto currency.
Warning: Some Crypto Wallets are dangerous, and contains malware. NEVER EVER TRUST MINING OR WALLET SOFTWARE THA YOU DO NOT KNOW.
Wallet Types
Online Wallet - Each of us using Steemit, has an online wallet, where we ca send and receive Steem and Steem Dollar.
Desktop Wallet - A Desktop Wallet can be downloaded to your PC, and then the Wallet resides on your desktop and not online.
Mobile Wallet - A Mobile wallet is installed on your SmartPhone.
Hardware Wallet - These wallets looks like USB sticks, and can be stored in your safe at home. When you plug them into your USB device, they go online for transacting and you can take them out and store in the safe again.
Paper Wallet - You can print out the QR Codes for Private and Public Keys. When you scan the QR Codes, you can transact 100% offline. This means that cannot really be hacked, but you should never ever lose this print out as anybody that gets hold of them can then steal your money.
Security for Wallets.
Wallets are built to be secure. There are a lot of malicious people in the world, looking to steal your money. I would highly recommend to use other authentication methods in conjunction with the standard wallet security. If you use something like Google Authenticator you will be ask to type in a 6 digit code every time you log into your wallet.
Is a Crypto Wallet like a bank accunt.
A lot of people are under an impression that a Crypto Wallet is like an online bank account. It is actually not. A Crypto Wallet have more of the characteristics of a Bank than a bank account. When you control your wallet, you actually control your own bank. We do not need banks anymore, you are your own bank.
A few key things:
Never lose your private key, you cannot get it back. It is not like a password which you can reset. Nobody knows your public key except you and your wallet.
When you use Google Authenticator, always save the key that is provided when you go through the set up process. If you lose this key and you lose your phone, you will not be able to get back into your wallet.
Read a lot about wallets before using them. It is a dangerous minefield.
Some of my other in Laymen's Terms Post.
Smart Contracts in Laymen's Terms
What is Quantum Computing in Laymen's terms
Artificial Intelligence in Laymen's terms
Blockchain and Digital Signatures - In Laymen's Terms
Trustless - What does it mean in laymen's terms?
Cyber Attacks explained in laymen's terms
Machine Learning - In laymen's terms
Internet of things and what it is in laymen's terms
Big data - What is it really about - In laymen’s terms
