In the traditional sense of the word, Wallets are used for storing very vital stuff such as id’s, keys and most importantly, your cash. That is what you associate the traditional wallet with, and that is the kind of function that Cryptocurrency wallet engages in. Let’s examine a definition of the wallets to examine it further. A Cryptocurrency wallet is a software program that stores private and public keys. It then further advances to engage in the task of interacting with other blockchain in order to enable you to send or receive cryptocurrencies at any period you desire while you retain the option of checking your balance at any time. All cryptocurrencies are usually stored within wallets and there are of different types.
However, before you know the different wallets and the one that is best suitable for you, you should know that the wallet does not store raw currency like the traditional wallet. Instead what it stores are a series of records of monies signed off to your crypto address.
What then are the types of wallets?
- Mobile wallets- This kind of wallet is present on a phone app and are beneficial because they can be accessed when you are anywhere. However, even though they are smaller and simpler to use, they are not totally trustworthy as computer malware can latch on to them an steal your information. Some of the most popular mobile wallets include Bread Waller, Mycelium, Exodus as well as others. They all share the feature of trading in almost all cryptocurrencies.
- Desktop: These kinds of wallets are easily downloaded to your laptop or desktop that you access at home. The flip side about this kind of wallet is that it can only be accessible on one device unlike your mobile wallet that can be downloaded to other phones. However, the pros that can make you go for it is that there is high level of security within it even though this does not totally eliminate the possibility of being hacked.
- Online Wallet- This type of wallet is usually run on the cloud. In this way, every private key is stored online and is solely managed by Third parties. However, the fact that third parties are managing them does not make them Invincible from outward attacks.
- Hardware Wallet- In some occasions, you may have seen some Cryptocurrency investors or financial analysts carry some form of USB around. Those USB’s are referred to as Hardware wallets that store passwords and the user’s private keys. This means that the passwords are offline and makes it very difficult to get accessed by Hackers. To make use of it, you would simply insert your USB into any Internet-enabled computer and input your pin to make your desired transaction.
You should understand some things in getting any form of wallet.
- Ensure you always backup your wallet. This is applicable to everyone who makes use of mobile, desktop or online wallets. You should backup your password on a hardware wallet.
- Always Update the software of your mobile wallet- This should be done in order to increase the security of the wallet.
- Get a very complex password- when you do this, you add layers of additional security that is sure to discourage scam activities and hackers from coming after your funds.
Now we are getting to the juicy part of the book. Since you have chosen the kind of wallet that you are going to use, the next step is learning how to transfer funds to anyone or business.
Before you delve into transferring funds at all, you should understand that cryptocurrencies charge different fees in order to facilitate your transfer and the transfer speed might not usually be uniform for all cryptocurrencies.
Also, before you hit the “send” button, you should always double check on a number of little things
- Double check out the identity of your recipient- The reason is that there are numerous individuals and businesses with dubious profiles online and you cannot get your money back if you send to the wrong person. The reason for this is simple: almost all cryptocurrencies have built-in-anonymity for the purpose of safeguarding their users (this is the major reason why cryptocurrencies are the only currencies used in the dark web). Always make sure you know the recipient of your transaction because no one will get your money back
- Triple check the address of the recipient- In this age of hackers, there are malwares available online that provide scam addresses that look very familiar with the address you want to send your currency to. Always make sure you triple check the address just before you hit the send button because you cannot retrieve any money you send to a scam address.
The concept of faucet is that it works like a reward system that is aimed at encouraging you to buy coins. It is fashioned like a website or an application that makes Satoshi available for you to claim if you are a new visitor to a Crypto currency website. However, you should be careful because it is not every website that offers faucet that may be legit. Even though some offer free Bitcoins as a good incentive, you should be careful not to just give out your wallet address to any site.
Fungibility of Cryptocurrency
Over the course of history, for unit of exchange to be regarded as fully legitimate, it must past the test of being fungible. When cryptocurrencies came into popularity, one of the major questions was placed at its door bordered on the issue of fungibility. Are cryptocurrencies fungible?
The answer to this question lies in the definition of the word itself. For any currency or asset to be fungible, it means that it possesses the capability of mutual substitution between individual units of the asset. In this light, Bitcoin cannot be said to be fungible because a bitcoin could lose its worth when it is being traced to a nefarious address and blacklisted by some companies who suspect a scam.
On the other hand, the value of gold still remains the same even though it has been used for any nefarious activities. Because cryptocurrencies are digital in nature, its history can be traced and if a bitcoin used for fraud beforehand finds its way into your wallet, it would be difficult for you to use it because it would have lost its values after being blacklisted.
Even though it is now proved that Cryptocurrencies are not fungible in nature, it does not rid the fact that they remain the currency for the future. The most important thing you should internalize is that you should avoid transactions with dubious elements so as not to receive coins that have already been blacklisted by big companies.
Exchanging Cryptocurrency for Cash
The knowledge of wallets is going to be vital in order to learn how to exchange your cryptocurrencies for cash. If you are an investor who has made some significant gains on your cryptocurrencies, you can be able to transfer your Cryptocurrency to your local bank account from where you can withdraw it as cash.
The first step to engaging in this is to identify if the Cryptocurrency you wish to liquidate is on the exchange list. This is because there are some new cryptocurrencies that you may require to sell off for the Bitcoin, Ethereum, Ripple equivalent on a exchange platform like Binance, CEX.io, Bitstamp etc.
Upon reaching the exchange dashboard, there are call-to-action buttons like “Sell” and “Buy” for you to choose. You will then click on “sell” and then input the current market price you want.
After a little while, the currency sale would go through and you will be left with Bitcoins in your account.
From this point on, you would need to copy the address of your Binance account (or any other exchanger you may have used) and then paste it within your wallet.
Once the funds reflect in your wallet, you can easily place a withdrawal to your local bank account
Buy with Cryptocurrency
The process of buying anything with your currency has become easier than previous years. Before you delve into the process however, you should always endeavor to check for your country’s regulation concerning Cryptocurrency.
In buying currency, a wallet is needed from which you will transfer money to the Cryptocurrency exchange you choose to use.
Let me slow down a little so you can catch up.
You see: Cryptocurrency exchanges are websites that allow you change your currency into any Cryptocurrency you desire. For example, if you wish to buy Ripple, or Altcoin, you can go to a Cryptocurrency exchanges and exchange it with your dollar, pound, yen and other currencies.
Some examples of Cryptocurrency exchange websites include Coinbase, Coinmama, , Binance etc.
Sell with Cryptocurrency
The process of selling your currency is almost as easy as buying your currency.
In order to engage in selling, you will have to possess a working account on a currency exchange platform where you will sell the coins. After you have made sufficient gain from your investment, you can go to the selling section of the cryptocurrency exchange and then initiate a sell order with the amount you wish to sell.
Then, you can relax while the system helps you to seek out any interested buyer of the coins you wish to sell. Immediately the buyer pays the equivalent of the Crypto coin in real cash, the coins will no longer appear in your wallet and would be replaced by the equivalent which had been paid by the buyer