Background information
Cryptocurrencies: Is it still worth jumping on the bandwagon?
by Mike Halter
Crypto wallets: a safe and convenient way to keep Bitcoin & Co.
25.7.2018
Translation: Jessica Johnson-Ferguson
As we recently added crypto wallets to our range, I would like to give you a little introduction to the world of cryptocurrencies and explain how to store Bitcoin and the like. I’ve also put together an overview of our latest crypto wallets.
Although the Bitcoin price is not as high as it was early this year, cryptocurrencies are still on everyone’s lips. But what exactly are cryptocurrencies? My colleague Mike Halter gives an explanation in the following article (in German):
To trade cryptocurrencies, you don't need anyone’s permission. All you need is a wallet to store your cryptocurrency key. Frankly, the wallet analogy is not great. After all, a crypto wallet has more in common with a bank account than a physical wallet. Your assets are displayed in the blockchain and verified by all peers. Your assets are the sum of all your transactions. In other words, it’s not as if your assets are stored in your wallet.
Keep reading to learn about the possibilities provided by wallets.
Basically, all cryptocurrencies work in the same way: each peer has a private key, a public key and an address. The private key encrypts all your transactions and serves to identify you. It’s also the key to your wallet. So make sure to keep it secret. Anyone who knows your key can access your wallet.
The public key is derived from the private key. Other peers use it to encrypt transactions for you. And only you can decipher it. Finally, the address is derived from the public key. The address is needed so transactions can be made to you.
There are different ways of storing cryptocurrencies: paper wallets, web wallets, software wallets and hardware wallets. All of them have their advantages and disadvantages.
The paper wallet
Web wallets
- browser application
- maximum convenience, accessible from anywhere
- private key is in third-party hands (inherently broken by design)
- level of risk only acceptable for very small amounts of money
- the type of service is an attractive target for hackers
Software wallets: desktop or mobile app
Personally, I use a BRD wallet on my smartphone. Ultimately, it’s a question of taste which software you prefer. Some of the software solutions allow you to store several pairs of keys and addresses. Furthermore, many apps let you manage several currencies.
The downside of software wallets is their vulnerability to malware and hackers. If someone gets access to your mobile or PC, that person can steal your private key and thus your assets. Another thing to be cautious of are fake software wallets. It’s therefore advisable to avoid keeping large sums in your software wallet.
Hardware wallets
The Trezor Model T wallet by SatoshiLabs is a wallet with a built-in touchscreen. It allows you to make simple entries and confirmations directly on the wallet. It’s connected via a USB-C and requires a driver to be recognised by your PC. Transactions are made via the Trezor page on the browser. The Model T can also be used for wallets by other manufacturers.
All our wallets were tested and will be described in greater detail in an upcoming article. This much can be said: these three did their job well and are suitable as a hardware wallet.
Quentin Aellen
Category Marketing Specialist
quentin.aellen@digitecgalaxus.chIn a nutshell, I enjoy technology and being where the action is. So what better place for me than digitec?
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