If you are willing to buy some Ethereum to trade or invest in this cryptocurrency, the first step you have to take is to set up a wallet. In fact, an Ethereum wallet is a software, which you can use to store and transfer your Ethereum with. An Ethereum wallet is connected to the blockchain, where your funds are stored in. In simple words, your wallet store your private and public keys and not your coins or tokens.
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The Ethereum wallets have a private key and a public key. These two keys are string of random letters and numbers. In case, you want to receive Ethereum from others, you need to provide your public address to them. Or if, you want to send Ethereum to others, they have to provide their public key to you. As we mentioned before, your Ethereum wallet is holding your private key. In order to send fund using Ethereum wallet the public and private key should match together.
How to choose an Ethereum wallet?
There are two main types of Ethereum wallets. The hot wallets and cold wallets.
The hot wallets store your private keys online. In fact, they store them on the companies’ server, which provide the wallet services. As a result, you can access to your funds any-time, any-where as long as you have internet access with a device, which can connect to the internet. On the other hand, cold wallets store your private keys on your device. Each of those types of wallets has their own advantages and disadvantages. For example, hot wallets are vulnerable to hacking attacks. Cold wallets also store all the data offline on the device. So, in case the wallet gets lost or stolen, you will lose your funds.
Different types of hot wallets
Mobile applications are one the most popular hot wallets. By using mobile app wallets, you can access to your funds almost any-where. This type of wallet is suitable when you want to have a P2P transfer or shopping using Ethereum. However, the business should accept Ethereum as a payment option. In fact, the most advantage of mobile app wallets is that they are portable and are easy to use as well.
Another type of hot wallets is desktop wallets. This type of wallet installs on your desktop computer. Desktop wallets are available for Windows, Mac, and Linux.
Web wallets are other type of hot wallets. To use web wallets, you can simply create an account on the exchange’s website or the wallet services provider website. Wallebi is one the reliable and eligible web wallets, which you can use in order to store, send and receive Ethereum. You can also buy and sell a wide choice of cryptocurrencies using this platform.
Different types of cold wallets
The safest type of cold wallets is paper wallets. In fact, it’s a piece of paper, which the private and public key printed out on. Or it has a QR-code. The advantage of paper wallet is that it stores data offline on a piece of a paper. As a result, there is no chance for hackers to access the data and steal the fund. However, if, you have a paper wallet, you should store it in a safe place. It’s recommended laminating the paper to be water resistance and also store it in a safety box.
The other type of cold wallets is hardware wallets. This type of wallets looks similar to a pen drive, but they designed specifically in order to store cryptocurrency. Hardware wallets also store private keys offline on the device. As a result, they are immune against hacking attacks and are safer compared to hot wallets. Keep in mind that if, you are using hardware wallets, always take a back-up from your wallet. So, if, something happened and you lose your device you can recover your funds. The most famous hardware wallets are Ledger Nano S, TREZOR and KeepKey.