What is an encrypted wallet?？
Understanding email is equivalent to understanding the key points of a crypto wallet。Just as you can send, receive, and manage messages in your email, a crypto wallet resembles the headquarters of your crypto assets。
Introduction to Crypto Wallet
Understanding email is equivalent to understanding the key points of a crypto wallet。Just as you can send, receive, and manage messages in your email, a crypto wallet resembles the headquarters of your crypto assets。
You can open your crypto wallet at any time - not only to view your assets, but also to send, receive, use, deploy, pledge and manage your assets。Wallet lets you exchange cryptocurrency with friends, family, or businesses that have a cryptocurrency wallet。Crypto Wallet also allows you to access decentralized applications and connect to Web3 marketplaces and games。
Why is wallet important?？
When you receive a cryptocurrency, an entry is usually recorded on the blockchain indicating that you now own a certain number of units of that particular coin。Wallet lets you access and manage cryptocurrency。
Do you have different types of wallets?？
Wallets are usually divided into two categories: managed wallets and non-managed wallets.。
An escrow wallet is one in which your private key (aka wallet password) is maintained by someone else。This usually means that you store cryptocurrencies through exchanges or trading platforms, which often need to comply with legal and regulatory requirements to protect these assets.。You can then access the coins in your wallet by logging into an exchange or platform (similar to logging into an online bank account)。With an escrow wallet, there is less risk of losing private keys and no need to maintain backups。
Another major benefit is that losing or forgetting your password doesn't necessarily mean losing your cryptocurrency。However, you can only access the cryptographic features and assets available within the platform you are using。
An unmanaged wallet (also known as a Web3 or DeFi wallet) is a wallet where you personally hold and maintain your private keys。With an unmanaged wallet, you have full control over your cryptocurrency, but you also have more responsibility because only you know the private key to unlock the wallet。
In addition to having full control over your assets, there are other benefits to an unmanaged wallet, including participation in the Web3 economy.。
Web1 is static and read-only (like GeoCities pages), while Web2 is today's interactive network (dynamic, user-generated social networking sites like Facebook, wikis, etc.)。Web3 is the next stage: decentralized and owned by the public or its users, rather than by large tech intermediaries or centralizers or platforms.。
Using an unmanaged wallet, you can access the world of decentralized applications (or "dApps") that support and support the following features:
- DeFi (Decentralized Finance Application): Instead of using a third party such as a bank for financial transactions, you can exchange digital currencies directly with individuals and businesses。
Pledge: Pledge allows cryptocurrency holders to monetize certain types of cryptocurrencies in their wallets。As an exchange that allows your cryptocurrency to be used to help verify transactions, you will be rewarded。
NFTs (Irreplaceable Tokens): These uniquely identified data units can come in the form of digital art, game avatars, and other collectibles on the online marketplace, which you can store and trade directly in an unmanaged wallet。
Web3 games: In Web3 games built with blockchain technology, players can earn cryptocurrency, NFTs, and other game assets, as well as trading assets directly with other players in the virtual marketplace。
Which is right for me？
When you have an escrow wallet, others are in control。Although this allows you to be more free and enter more space, please be careful and safe, and never forget to lock。
Unmanaged wallets often also come with seed phrases or recovery phrases (which may provide additional security and access methods)。The phrase consists of 12 to 24 randomly generated words that allow you to access your wallet if you lose your private key。Your mnemonic is usually generated when you set up your wallet, and protecting your mnemonic is as important as protecting your private key, because anyone who has your mnemonic can access your wallet。
On the bright side, an unmanaged wallet is a good choice for accessing Web3 applications。Unlike some escrow wallets, which may charge a fee, you have complete freedom over your funds。
But: two types of wallets can be owned at the same time。
What does the wallet "look" like?？
Hot wallets are online, which means they are connected to the internet and you can usually run them on your computer or phone。Using hot wallets, accessing and trading cryptocurrencies is often more convenient。But these wallets are also more vulnerable to cyberattacks or scams by people who want to steal crypto assets.。
Cold wallets are offline, which means they are not connected to the internet。They are usually kept in some kind of physical device, such as a flash drive, or even a piece of paper containing your private key, so your private key will never be online。If you store your device in a safe place, it is less likely to be stolen because your cold wallet is needed to steal your funds。Although cold wallets may not be as convenient as hot wallets, they are generally safer。
Wallet security tips
Here are some tips on wallet security:
escrow wallet
- Make sure your password is secure。
See if a password manager and multi-factor authentication (MFA) are available and right for you。
Protect your phone number from SIM card exchange scams。
If you think your password has been compromised, change your password immediately and contact the platform you are using。
Unmanaged Wallet
- Keep your mnemonic secret, if sharing your key or mnemonic with others can give them access to all the cryptocurrencies in your wallet。
Store some backup copies of your private keys and mnemonics in different secure locations。
If you think your wallet has been stolen, transfer your funds to a new wallet immediately。
Security Best Practices
- Be wary of anyone who asks you to download screen recording software。
Beware of "coaching" scams in which you are asked to send cryptocurrency to a third party to set up a mining or pledging operation。
Be suspicious of any unknown NFTs or other assets airdropped into your non-custodial wallet。
Be sure to check the transaction details before signing a transaction with your wallet。If you sign a transaction, it is possible for a hacker to gain access to your funds, so the transaction is only approved if you trust the sender.。
·Original
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