Virtual currencies have prevailed on the internet and online platforms, where most businesses and websites offer crypto payments. Moreover, the foundation of the crypto market added another utility to these digital coins.
Therefore, providers and intermediates emerged on the scene, offering services for decentralised platforms and facilitating the transfer and exchange of cryptos, such as crypto wallets.
Owning a crypto wallet is necessary to transact and accept crypto payments for your business. However, in light of the increasing number of providers and tools, how to choose the best crypto wallet? Let’s discuss.
How Crypto Wallets Work?
Crypto wallets are cloud and online storage where you can keep digital assets, such as digital coins, tokens and NFTs. Sending and receiving crypto also requires owning a crypto wallet from one of the reliable providers.
Once you register your wallet, your crypto wallet will have a unique address, which is the destination of your funds when someone wants to send you digital assets and money.
Moreover, other security measures exist based on the wallet type you sign up for, such as seed phrases and biometric fingerprints.
If you are receiving cryptos, you must provide your wallet address, where your funds will be deposited almost instantly. On the other hand, if you are sending digital money, you must insert or scan a QR code associated with the recipient’s address to quickly insert and send cryptos.
Hot Wallets vs Cold Wallets
Wallets come in two varieties: hot and cold. Both can track the whereabouts of your money and provide different capabilities for transactions and security.
With the help of strong Web 3.0 platforms and dApps, hot wallets hold crypto money online. This makes it easy to access and link your wallet and conduct crypto transactions.
On the other hand, cold wallets are offline methods that store your digital coins and tokens on paper documents or hard drives. This method is safer since it does not expose your funds to the internet, keeping them away from hackers’ hands.
How to Choose a Reliable Crypto Wallet Provider
Amidst the plethora of crypto tools and solutions offering you storage and custody services for your crypto funds, finding the right solution is challenging. However, you can use this 5-factor checklist when looking for a reliable crypto wallet provider.
Securing your digital wallet and funds is the top priority when it comes to finding a crypto wallet. Therefore, check out the security practices of the wallet provider and review their safety measures, such as zero-knowledge proofs and 2-factor authentication.
Having a robust security system is crucial since crypto wallets have been the top target for cyber breaches and hacks, stealing billions of dollars in crypto funds over the years.
Functions & Features
Review the features offered by a crypto wallet and choose the ones that resonate with your business needs, such as transaction logs, reports, security notifications and more. These functions can be vital for the safety of your funds and wallets.
Moreover, some wallets provide convenient options, like a QR scanner and mobile application, enabling you to send and receive crypto money effortlessly.
Crypto wallets have limited functionalities if used abstractly. Thus, most functions come into effect when combined with dApps, Web 3.0 tools and decentralised platforms.
This applies to individual or corporate use of the wallet, which requires connecting it to various websites and platforms to conduct crypto transactions and other operations on your digital assets.
Private & Public Keys
Private and public keys are essential elements in crypto transactions, as they are used to encrypt and decrypt digital money transfers. When someone initiates a crypto payment, public keys are generated from the blockchain system to encode the transaction or “message”.
Once the transaction is validated and registered to the blockchain, the receiver’s wallet uses private keys to decrypt the message to receive the funds.
Hackers try to breach these private keys to divert the transaction their way. Therefore, it is crucial to use a highly secure key structure and blockchain system.
Crypto wallet providers imply different fees when it comes to registering and activating wallet functions. Therefore, it is crucial to review the costs of setting up and utilising a crypto wallet.
Corporations usually delegate more than one user to access the wallet and conduct transactions on multi-sig wallets. Therefore, ensure there are no hidden operational or managerial fees in correspondence to your budget and business needs.
Crypto wallets are used to store your digital money, whether online or offline. Hot wallets store your cryptos over the internet, facilitating faster access, while cold wallets are safer since they keep your money offline.
Finding and choosing a reliable crypto wallet provider is challenging, and selecting unsuitable wallets can be a deal breaker. Therefore, utilise this 5-factor checklist to ensure wallet security, functionality, utility, anonymity and costs.