What Is a Cryptocurrency Wallet?
If a regular bi-fold wallet holds dollar bills, a crypto wallet holds cryptocurrency, right? Not quite. Cryptocurrency, like Bitcoin or Ethereum, is actually stored on the blockchain, which is a big decentralized database.
What Is a Decentralized Wallet?
A decentralized wallet, or personal wallet, is just what it sounds like: a crypto wallet you manage and maintain yourself. Decentralized wallets aren’t provided by a crypto service or financial institution. Instead, they exist on your computer or removable drive, cutting third-party services out of your transactions altogether.
It’s safe to say that decentralized crypto wallets aren’t really for beginners, as you’ll need a certain level of expertise to maintain them securely.
- The transaction can be truly private.
- This type of transaction over the internet.
What Is a Centralized Wallet?
Most people enter the cryptocurrency market by using a centralized, or custodial crypto wallet. That means storage and custody of your cryptocurrency is managed by a third party, like Coinbase, or any of the dozens of others out there.
The third party knows your private keys, and will send, receive, and store cryptocurrency on your behalf.
This arrangement works much like a traditional bank account: the bank holds your money, and you can access it, but you don’t have keys to the vault.
The Ability To Transact
The ability to transact peer-to-peer is important for several reasons, but security and independence top the list. For one thing, involving a third party inherently increases security risks. After all, breaches and hacks are a fact of modern life.
In addition to this, peer-to-peer transactions help eliminate the threat of corporate or government financial surveillance.
Simply put, advocates of decentralized wallets don’t want Big Brother monitoring their every financial move.
1600
DAILY CASH OUT2550
EASY PAYMENT8150
TOTAL USERS1650
EXPERT TOKENSWhich Wallet Is Right for You?
Which crypto wallet is right for you depends on a number of factors, including security, usability, and your level of expertise. Here are a few worth looking into:
Ledger Nano X
Ledger is a hardware wallet that lets you connect to your computer or mobile device to move or use your cryptocurrency.
Read MoreTrezor Model T
Another cold storage wallet pick, Trezor Model T offers a user-friendly touch screen and a MicroSD card encryption option.
Read MoreMyEtherWallet
MyEtherWallet is a free, open-source platform that’s been around since 2015. Not technically a crypto wallet by itself.
Read More
Benefits Of
Decentralization
Decentralization is not a new concept. When building a technology solution, three primary network architectures are typically considered: centralized, distributed, and decentralized.
- Provides a trustless environment.
- Improves data reconciliation.
- Reduces points of weakness.
- Optimizes resource distribution.
- Decentralized blockchain network.