Everybody knows what a wallet is and its functions. A wallet is typically a small, flat case that can be used to carry personal items such as cash, credit cards, and identification documents. The word wallet has been in use since the late 14th century as a bag or a knapsack to carry personal items, however, since the start of 19th century, this definition has evolved to the current concept of wallet, i.e. flat case for carrying paper currency. The reason why wallets are used is, of course, to safeguard our paper currency.
Now, with the onset of 21st century coupled with the digitization of almost everything, it is no wonder that wallets have been digitized as well. However, before we dwell on cryptocurrency wallet, it is a prerequisite that we know what cryptocurrency is.
Cryptocurrency is the amalgamation of two words, Crypto and Currency. Crypto refers to cryptography, which is basically the practice and study of codes, while currency still holds its original definition. The main reason behind cryptography is to secure communications such that third-parties, also known as adversaries, do not understand the message that is transferred.
Originally, messages that are private are encrypted into the nonsense that cannot be decrypted without knowing the decoding key. So an adversary who would want to read your private/confidential messages just gets nonsense when the said message is encrypted. Basically, cryptocurrency is a digital asset that uses cryptography to secure its transactions, to control the creation of new units and most importantly verify the transfer of assets. So this means, that cryptocurrencies are decentralized opposed to the normal modes of electronic money that is controlled by central banking systems. You will also need cryptocurrency exchange script.
So for safeguarding cryptocurrencies that you own, you need a cryptocurrency wallet. This wallet stores the public and private keys which can be used to receive or spend cryptocurrencies. The wallet may contain multiple public and private keys. Do note that there is no cryptocurrency in your wallet, just the keys to it. The cryptocurrency is in the public ledger that is accessible to everyone. However, to edit or write on the ledger, you will need the keys in your wallet which equivalates to spending the associated cryptocurrency.
There are many types of cryptocurrency wallet such as software wallet, hardware wallet, watch-only wallet, multi-signature wallet and etc, however, their main objective remains the same, i.e. to safeguard your public and private keys from adversaries. Since cryptocurrency is digital and as such, there are numerous cases of cryptocurrency theft. Unlike traditional thieves, digital thefts can be accomplished using methods such as hacking or DDoS attacks. This is the main reason why you need a cryptocurrency wallet.
According to bitexchange.systems, their free to download cryptocurrency exchange script will have you started with your very own cryptocurrency exchange in no time. Furthermore, their numerous modules can be easily and seamlessly integrated into the new cryptocurrency exchange or already existing cryptocurrency exchange.
They have a hot and cold wallet module which is basically one of the most efficient methods to safeguard your cryptocurrency and digital assets. The idea behind hot and cold wallet is simplistic. Cryptocurrencies are digital assets and as such, they will constantly come digital attack. However, the prerequisite to a successful digital attack such as hacks or DDoS attack requires that your key is connected to the internet, i.e. that is online.
The concept behind Hot and Cold wallet is you keep 90% – 95% of your total digital assets in your Cold wallet. Cold wallet basically means that you keep your public and private key offline from the internet. And the rest of your digital asset, 5%-10% in your Hot wallet for your daily transactions. Of course, if you need to use a substantial amount of cryptocurrency which is more than the 10% you keep in your hot wallet, you can easily transfer the required fund from your cold wallet to your hot wallet.
Sure, the concept is simple. According to studies conducted by many, almost all cryptocurrency related theft has come about as a result of individuals and organizations keeping all/most of their digital assets in their Hot wallet.
What are you waiting for? Access bitexchange. systems and acquire a cryptocurrency wallet. Make sure you follow the above-mentioned practice of keeping most funds in cold wallet and you can rest assured of security and safety