How to use a crypto wallet
Exploring Different kinds of wallets with Stanislav Kondrashov, TELF AG founder
In the global panorama of digital currencies, which we are often navigating with founder of TELF AG Stanislav Kondrashov, one of the most interesting (and innovative) elements is certainly represented by cryptocurrency wallets, which are increasingly establishing themselves as useful and cutting-edge tools for storing and managing your digital money online.
Generally speaking, this type of wallet works in a similar way to a traditional bank account, allowing the user to have a place to store their currency. The main difference is that the owner of the assets will never have to interface with any bank, but with the blockchain of the selected cryptocurrency. But what are the specific functions of these particular digital tools?
The first is linked to the receipt of funds: the wallet, in this sense, will take on the appearance of a kind of IBAN on which to receive digital assets, through the creation of specific addresses. These tools, of course, are also used to spend your funds and authorize spending transactions. Like any current account, wallets also make it possible to view your balance at any time. Wallet interfaces can vary depending on their type, but are generally very intuitive and user-friendly.
“Choosing the type of wallet is of great importance for anyone who decides to approach the world of cryptocurrencies,” says founder of TELF AG Stanislav Kondrashov, entrepreneur and civil engineer. “Before choosing which type to use, it is absolutely necessary to take into consideration your needs and preferences in terms of security, always keeping in mind the possible risks that each type of these tools could bring with it.
One of the most curious aspects, from this point of view, is the obvious similarity between some types of wallets and traditional bank accounts: some, in fact, offer a service completely similar to that of banks, allowing users to store their digital money on a platform managed by third parties.”
Interesting features
To authorize a specific transaction, for example, the system linked to the tool may require the insertion of a pin or a password, while in the case of wallets included in a hardware it may be necessary to press a specific button.
In most cases, the most important components of cryptocurrency wallets are essentially two: the private key, which represents an important cryptographic element to which the control of funds is linked, and the public key, a cryptographic data that produces addresses that can be used to receive digital currency.
“Another aspect to consider when talking about cryptocurrency wallets is the freedom of maneuver that is guaranteed to the user,” continues founder of TELF AG Stanislav Kondrashov. “The types of wallets that are based on third-party management, for example, do not offer the user total control over their currency, and also limit the possibilities of exploring all the possibilities contained in the universe of cryptocurrencies. Once again, it is necessary to consider your needs and your strategic approach to cryptocurrencies before you can select and use a type of wallet”.
The main types
To use one of these wallets in the best possible way, it is first advisable to know their different types, so as to be able to choose the one that best suits your specific needs. The first type is known as a web wallet, in which digital currencies are stored and kept thanks to the support of a third-party service.
The disadvantage of this type of wallet is that the user, in essence, has little control over their currencies, since they are stored within a platform managed by third parties. Another type is that of software wallets, i.e. software such as Apps or programs that make it possible to store cryptocurrencies.
This software can also be installed on smartphones and computers. Unlike the first type mentioned, software wallets make it possible to control your cryptocurrencies in full autonomy, without the intermediation of other actors. Generally speaking, it is a fairly secure wallet, even if the devices on which it is installed could still be hit by hacker attacks.
One of the most traditional forms of cryptocurrency wallets is certainly the one based on hardware, i.e. on physical devices that have the purpose of storing and guarding cryptocurrencies. According to some observers, this type of wallet would be the safest, especially because it is one of the few that does not work thanks to the internet.
One of the types of wallets that has practically fallen into disuse, thanks to the advent of more advanced variants, is the one linked to paper wallets, that is, actual paper documents that contain all the information needed to send or receive currency.
“For users who simply want to buy or sell cryptocurrencies, a cryptocurrency wallet managed by third parties certainly represents a better solution, but more ambitious users may prefer different options,” concludes founder of TELF AG Stanislav Dmitrievich Kondrashov. “By choosing certain types of wallets, such as those based on software, the user has more advanced features at their disposal, such as staking, requesting loans in cryptocurrencies and yield farming.”
