How does a Cryptocurrency wallet work? – with Jason Hsu

How does a Cryptocurrency wallet work with Jason Hsu

After the advent of Bitcoin, Cryptocurrencies are expanding more and more in the world economy. One of the many advantages of cryptocurrencies is that there is no cash, bills, or coins. Everything is handled online, it is virtual money. Since everything is digitized, the wallet must also be virtual.

That’s when the Wallet was born, an electronic wallet that can hold different amounts of money, from the largest to the smallest amounts.

So we asked Jason Hsu, an entrepreneur based in the US, cofounder of KryptoGO USA, a SaaS provider for affordable and lightweight KYC/AML solutions. to tell us about cryptocurrency wallets.

Technically, wallets not only store cryptocurrencies but also serve another crucial task, which is to communicate with the blockchain by sending and receiving tokens in a fast, secure, and intuitive way. This is made possible by the fact that all digital currencies move from one part to another without ever leaving the blockchain.

In this scenario, it must be remembered that each wallet has a public address that corresponds to an alphanumeric code. The latter in turn represents a position on the blockchain and is very important because when we buy on exchanges, we have to communicate our address to receive the money we are entitled to. This translates into a basic consideration: a wallet does not hold cryptocurrency, and therefore is to be considered as a tool to interact with the blockchain. To better understand its level of security, it should be remembered that each wallet has a pair of keys, a public and a private one. The public one is used to interact with the counterpart, the second one instead gives us real access to our wallet from any device.

To better understand the operation of cryptocurrency wallets we must start from the assumption that inside them we will find two keys: one public and the other private. The first is used to receive money during a specific kind of transaction and is open. The second one, the private one, must never be disclosed. In this way, we can protect our privacy and our capital.

For the rest, using a wallet is very simple, especially after it has been opened we can decide whether to receive or send money. In the case of receiving we simply have to ask for a reference address to be provided to the sender. To pay we need to know the recipient’s receiving address. Keep in mind that every transaction is irreversible. This means that we must always pay attention to the address that is provided to us.

The electronic currency of Bitcoin, and now cryptocurrencies, in recent times, seems to be increasingly successful. The cryptocurrencies are not real but purely digital, are managed in a wallet as ephemeral said wallet, from which to draw to move money, well protected by encryption. From here everything starts, and this wallet is the nerve point of cryptocurrency transactions.

The security of this wallet lies in the fact that it is anonymous, you can open it with a simple email address. To move it there will then be two keys, so-called, a public one to receive payments and a private one to make them, which must never be shared. Then there are other methods of security of the wallet, ranging from the password of the software for management, up to the messages in case of unauthorized access. To send money, a fee is required, and each payment is considered unmodifiable since once made, it can no longer be changed.

To be able to buy wallet software, the wallets, just for the type of object, it is necessary to evaluate the platforms, better than e-commerce, among the best known, such as Amazon, for a well-considered choice. There you can find various solutions, depending on your needs, aiming at the security of the software as the best-known brands of Ledger and SecuX, in addition to Billfodl. The detailed descriptions of technical features in addition to user reviews will give the purchase something even more secure.

Hot or Cold Wallet: what does it mean?

Cryptocurrency wallets are divided into two categories depending on their use. Consequently, we have the hot which are online platforms, and the cold which are storage devices. At this point a question is legit: what is the best choice?

If you are looking for fast operations it is clear that you need a crypto wallet always connected to the Internet like the hot ones with immediate transfer operations. In such a context creating an online wallet is child’s play and does not require any particular settings due to their operational simplicity.

If instead, you are looking for greater security at the expense of speed, then you can operate on cold wallets that are portable physical devices that have the form of a classic USB stick. Since they are not always connected, they are also difficult to block. In this context, it is enough to remember that cold wallets connect just the time to make a transaction on the blockchain, in a completely safe way.

Follow Jason on Instagram