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Whether you’re planning to buy cryptocurrency in India or simply holding crypto coins for future use, a secure cryptocurrency wallet is a must-have. A digital wallet is a software application that saves and stores public and private keys plus interacts with multiple blockchains. It facilitates users to send and receive digital currency plus monitor their balance. So, you need to know how to choose a secure cryptocurrency wallet.
In this industry, crypto wallets are an essential part of owning and investing in crypto coins, regardless of their type or where you buy them from. Even if you’re an Indian citizen and you buy cryptocurrency in India, you will still need to store them securely. But since there are way too many options, choosing the right crypto wallet can be a burden if you’re new in the crypto world. This article will guide you toward learning all there is to know about choosing a secure crypto wallet.
How Does A Cryptocurrency Wallet Work?
The first step towards selecting a secure crypto wallet is knowing how the wallet works! When one sends you bitcoins or other digital currencies, they are signing off ownership of the digital coins to your wallet’s address.
The private key in your crypto wallet must match the public address assigned to the currency to use those coins and unlock those funds. If the private and public keys match, the balance in your crypto wallet will increase, and the sender’s balance will decrease accordingly. There is no physical exchange of real coins.
[wd_hustle id="4" type="embedded"/]What Are The Different Types Of Cryptocurrency wallets?
Next, it is crucial to know the several types of wallets that provide secure ways to store and access your cryptocurrency. It will help you understand which type of wallet will be best suited and provide you with maximum security. For instance, say you buy cryptocurrency in India, each cryptocurrency is in some way different from another and will have its own features, and one must know the best way to secure it.
- Desktop: Crypto wallets are downloaded and installed on a laptop or PC. They will only be accessible from the single computer in which you will download them. These wallets offer one of the highest levels of security. However, if your computer gets hacked or gets a virus, there is a possibility that you might lose all your crypto funds. Electrum and Exodus are reliable desktop wallets.
- Online: These wallets are accessible from any computing device in any location and run on the cloud. While they are easier to access, online crypto wallets store your private keys online and are managed by a third party, making them more vulnerable to hacking attacks and theft. Two good examples are Coinbase wallet and Blockchain wallet.
- Mobile: These run on an application on your phone and are useful because you can use them anywhere, including retail stores. Mobile wallets are usually smaller and simpler than desktop wallets due to the limited space available on the device. Copay is the most widely used mobile wallet.
- Hardware: These wallets store a user’s private keys on a hardware device like a USB. Although these wallets make transactions online, however, they are stored offline, which delivers enhanced security. Hardware wallets make transactions easier while also keeping your digital money offline and away from danger. Ledger Nano S is a reliable hardware wallet.
- Paper: Paper wallets are easy to use and give a very high level of security. The term ‘paper wallet’ could refer to both a physical copy or printout of your public or private keys, plus to software that securely generates a pair of keys that are then printed. Using a paper wallet is relatively straightforward.
How To Ensure Maximum Security Of Your Crypto Wallet?
The most important step is to know how you can increase the security of your digital wallet. Two crucial questions if you buy cryptocurrency in India are, one, where you can buy cryptocurrency safely in India, and two, how can you secure your crypto coins? Crypto wallets are secure to varying degrees.
The security level depends on the kind of wallet you use and the service provider. A web server is a riskier environment to keep your crypto coins as compared to offline. Although online wallets have proven the most unsafe and prone to hacking attacks, you need to implement and follow careful security precautions when using any crypto wallet.
- Backup your wallet: You should store only small volumes of crypto coins for everyday use online or on your computer/mobile, keep the vast majority of your crypto funds in a high-security environment. Cold or offline storage options for backup, such as a paper wallet or a USB, will protect you against computer failures plus allow you to recover your digital wallet, should it get lost or stolen. It will, however, not protect you against eager hackers.
- Update software: Keep your software applications up to date so that you can have the latest security improvements available. You should regularly update both your crypto wallet software and also the software on your computer/mobile.
- Add extra security layers: More the layers of security, the better. Setting long plus complex passwords and ensuring any withdrawal of crypto funds requires a password is a good start. Use wallets having a good reputation and implement extra security layers like two-factor authentication. You might also want to consider a crypto wallet that offers multi-signature transactions like Armory or Copay.
Parting Thoughts
Selecting a secure crypto wallet is not a simple task, and you should not treat it lightly. It will allow you to store your crypto coins safely. Research well and keep the search going, as you may not find your perfect crypto wallet on the first try.
Suppose you are new to the crypto world and finding it difficult to navigate your way around the industry. In that case, we highly recommend beginning your crypto journey with WazirX, a top cryptocurrency exchange platform.
If you have questions like where you can buy cryptocurrency, where you could sell it or exchange it, then we’ve got your back. Give a read to the WazirX blogs to better understand the crypto world before you get started!
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Frequently Asked Questions
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
Are Cryptocurrencies Legal In India?
In India, cryptocurrency is legal, and anyone can buy, sell, and trade it. Because India lacks a regulatory system to regulate its operations, it is presently uncontrolled. According to the Ministry of Corporate Affairs, companies must now document their crypto trading/investments inside the financial year.
What Is Cryptocurrency?
A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
What Are The Best Cryptocurrencies To Invest In?
The best cryptocurrencies to invest in would be the ones you study and analyze in detail. Some of the most popular cryptocurrencies include Bitcoin, Ethereum, and many altcoins such as Tron, Ripple, Litecoin, etc.
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience. Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Is Cryptocurrency Banned In India?
No, cryptocurrency is not banned in India. India has seen its ups and downs in the crypto sector concerning its legal status. The Reserve Bank of India (RBI) issued a circular in April 2018 advising all organizations under its jurisdiction not to trade in virtual currencies or provide services to assist anyone in dealing with or settling them. A government committee proposed outlawing all private cryptocurrencies in mid-2019, with up to ten years in prison and severe penalties for anyone dealing in digital currency. The Supreme Court overruled the RBI's circular in March 2020, allowing banks to undertake cryptocurrency transactions from dealers and exchanges.
How Safe Are Cryptocurrencies?
Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed. There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
How To Invest In Cryptocurrency Stocks?
Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
