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Cryptocurrencies are steadily growing in importance, despite warnings from most of the world’s central banks that they are very risky, very volatile and not recommended investments.
Bitcoin is the most popular currency and major economic players have started to pay attention to this important technology.
The field of cryptocurrency has become more and more attractive to the general public. Even small investors who lack technical training are starting to take an interest in investing in Bitcoin and other cryptocurrencies, which is dangerous for them, according to warnings from banks, financial institutions and central banks.
One of the most important tools that any user needs to manage Bitcoin and other digital currencies is the wallet. As the name suggests, digital currency wallets are tools used to store currencies for protection and easy access later.
Bitcoin Wallets
Cryptocurrency wallets are used to store these currencies. Cryptocurrencies cannot be viewed as a tangible asset like the money you have in your pocket. On the contrary, these coins are nothing more than a few codes stored in the blockchain.
Each currency, Bitcoin for example, is made up of a set of code – or code – different from any other currency. This is why each part of the network is unique by default, which on the other hand is easy to follow.
Based on the above, you can understand the idea of cryptocurrency wallets. It is a wallet that allows you to keep the code of your currencies, or tokens for them. Although it sounds complicated, it is not.
This is where Bitcoin wallets provide an easy to use experience similar to banking apps on smartphones. Anyone can exchange their currencies very easily at any time.
How to hold digital currencies
Users generally buy Bitcoin, Ethereum, etc. via sites offering this service. What can be described as an exchange or currency exchange service. When the user pays a sum of money in dollars, euros or any real currency in exchange for its equivalent in bitcoin or ethereum.
Bitcoin
Of course, when you buy your cryptocurrency through these platforms, it stays in your balance on the platform. This may have caused users to question the need to buy wallets given the possibility of holding coins on these platforms.
The answer to this question may be simple. Leaving your cryptocurrency on cryptocurrency buying platforms makes it an easy target for hackers. Because hacking the platform will result in hacking all accounts and losing money.
Cryptocurrency wallets are divided into two types. Hot wallets, cold wallets. The first is known by this name because it is connected to the Internet. These wallets usually come in the form of an easy-to-use website or app.
Cold wallets are completely disconnected from the network, and therefore more secure. These wallets can be in the form of PC applications or in physical form.
Physical cryptocurrency wallets are the most popular and secure type. It comes in the form of a flash memory that can be connected to your devices through a USB port. Each wallet has its own secret number which prevents access to its contents, except to its owners.
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