Grassroot Crypto Education (Vol.6) - Wallets in Cryptocurrency

It's another wonderful edition of our grassroot crypto education and we are glad that many users have benefited from the basic topics in cryptocurrency that has been taught in the previous volumes and today we would be talking on Wallets in Cryptocurrency for volume 6. This is going to be an interesting piece once again and I implore you to join me on it.

Literally, a wallet is any object/device that is used to store money or small documents like Identity cards, passport photographs, and so on. In cryptocurrency, wallets are mostly electronic-based and are used for the storing of crypto assets, it could be a physical wallet taking a form of a USB to store crypto assets offline or digital ones that are connected to the internet at all times.

In essence, wallets in cryptocurrency can be connected or not to the internet, whatever the case is, it serves the purpose of storing owned crypto assets for short-term or long-term purposes. Wallets in cryptocurrency can further be split into two types, namely; Hot wallets>and cold wallets. We would discuss these two in the section below.

Hot wallets in cryptocurrency are the types that are required to be connected to the internet for storing crypto assets and other operations. In this case, a user can store, trade, withdraw assets from the wallet any time of the day but it would be operated via the internet. It's easy to use this type of wallet when desired and one drawback is that it's susceptible to hacking since it's connected to the internet, and it is disastrous if the owner is careless with the wallet keys.

This type of wallet in cryptocurrency can be mobile-based, online/web-based, and desktop-based. Devices on the internet under the aforementioned categories are used as hosts for the hot wallets to fulfill the purpose of storage of crypto assets. Some examples include Trust Wallet, MetaMask Wallet, Atomic Wallet and so on.

Cold wallets in cryptocurrency can be seen as the opposite of Hot wallets, this type of wallet is used for storing crypto assets offline and it is only connected to other devices whenever it's needed. In that case, this type of wallet is more secured as compared to hot wallets as it's kept offline and the keys are the ones generated only at the user's discretion and kept safe making it less susceptible to hack.

Cold wallets in some cases are connected to the Internet when it's needed while some are kept completely offline. The classification under this type are paper wallet and hardware wallet. The paper wallet basically operates on a piece of paper that contains all information required to access the stored asset while a hardware wallet can be in the form of a USB device connected to another device (computers) to access the stored assets. Examples are; Ledger Nano X, Trezor Model T and so on.

In conclusion, wallets in cryptocurrency are used for storing cryptocurrency assets and we have been able to talk about two major types which are Hot wallets and Cold wallets, while the former is connected to the internet all times and the latter, is based offline. In addition, we have given some examples of each of the wallets discussed today, in the next lecture, we would be considering Exchange wallets and Crypto wallets to see how each differs and you would learn how to create a crypto wallet. Thanks for reading the lecture once again and I look forward to your participation. Special thanks to the community @steemkidss for the initiative and the Steemit team for the unending support.