To ensure the security of your cryptos, the virtual wallet is extremely important. While many traders keep their assets at the brokerage where they usually trade, there are others who prefer to store the crypts in their virtual wallets.
If you still don’t know what the e-wallet is and how it works, this article will be perfect for you.
What is the virtual wallet?
The virtual wallet is a software whose function is to store the public and private keys related to the cryptocurrency blockchain. With it, traders can transfer and pay with their bitcoins and altcoins.
How does the virtual wallet work?
The e-wallet doesn’t actually store your digital coins. Instead, it only keeps records of the details of the transfers you make, including the origin and destination addresses of each.
In this case, the wallet balance is always updated as soon as you make a transfer.
The wallet is important because it holds the private key, with which you can transact with your cryptos. Therefore, traders should always choose safe portfolios so as not to avoid the tragedy of losing assets.
Two types of virtual wallets: hot wallet and cold wallet
There are usually considered to be two main types of e-wallet, the hot wallet and the cold wallet. As both are types of digital wallets for storing cryptocurrency, investors need to be aware of the advantages and disadvantages of each in order to be able to choose.
The “hot wallets” are connected to the internet. They can usually be installed on your mobile phone or on your computer. With a hot virtual wallet, you can make cryptocurrency trades.
In the case of “cold portfolios”, it is possible to draw a parallel with savings. As they are not connected to the internet, it is necessary to use a physical device.
As a writer, Richard is an advocate of blockchain technology and cryptocurrency in general. He writes about all things from cryptography to economics, with a focus on how it applies to cryptocurrencies. He is also passionate about writing about topics such as decentralization, open-sourced software development, and copyright law.