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Understanding Bitcoin and Other Cryptocurrency Wallets

How Cryptocurrency Wallets Work

Cryptocurrency: The currency of the future

Cryptocurrency, or virtual currency, has emerged as an excellent alternative to mainstream currency. This type of currency doesn’t have any physical form for it exists purely on the web. Crypto is not to be confused with digital versions of mainstream currency such as credit cards or digital payment apps. The biggest defining feature of cryptocurrency comes from the blockchain technology that backs it, ie. its decentralised nature, and this is also what differentiates it.

To put things in perspective, all the money in a bank account is nothing but entries in a ledger, except this ledger is owned and maintained by the bank and regulated by the government through a central bank, both of which act as mediators between a person and their money. This also means that any transfer of money in this mediated system, while may come across as direct, is actually routed through the banks of the parties involved. This mediation increases the transaction cost as well as the processing time.

Cryptocurrency, on the contrary, is a truly direct way of transacting in a digital world. It is also a more transparent system that presents a decentralized public record of all transactions taking place on the network. Given the irreversible nature of the blockchain network wherein each block is tied to the one before it, as well as the multiple copies of the data that exist across the globe, crypto is the securest system of digital money that we know of.

What are crypto wallets?

Just like physical wallets store currency, crypto wallets are electronic wallets that are used to store digital assets. These wallets hold one’s cryptocurrency and also facilitate the transfer of currencies. Any transaction of cryptocurrency between two people is actually a transfer of currency between their respective wallets. All types of coins are neatly arranged in a person’s wallet, clearly showing the balance of each type of crypto. The wallet also records the transaction history by detailing deposits, withdrawals, orders etc. made by the wallet owner.

How do crypto wallets work?

Crypto wallets are digital repositories of the crypto assets of a person, holding coins such as Bitcoin, Ethereum and Litecoin. A wallet can be created on the web, downloaded on a smartphone or bought as a piece of hardware. Each of these wallets operates in much the same way, though they might differ slightly in form. These electronic wallets are protected by keys, one of which is meant for public use and the other one for private use. The public key works like a bank account number — that it is what you wouldn’t mind sharing with other people. In fact, you must make it known to any person who intends to transfer money into your wallet. It is, therefore, completely safe to share your public key, hence the name ‘public’.

The private key functions much like its name- ‘private’. It is a unique string of numbers and letters of the alphabet that provides you exclusive access to your crypto holdings. It must, therefore, be protected and kept a secret. It is advisable to keep a copy of your private key noted down somewhere that you can easily access when needed. It is something that you don’t share with anyone, similar to your online banking password.

A strict word of caution here: it is impossible to retrieve the private key if lost, and all assets in the crypto wallet would become inaccessible in the event of loss of the private key. To summarise, the knowledge of a public key is enough to receive money in a wallet but to send money out a wallet, the private key must be known.

 

Why CoinDCX wallet is the best btc wallet

CoinDCX, being the best crypto trading platform, offers all types of functionalities including btc wallets. The CoinDCX crypto wallet is an online wallet that is integrated with the user’s trading profile. It is, hence, possible to enjoy a whole bouquet of CoinDCX services with a single account, including the highly-versatile wallet. Like other wallets, the CoinDCX wallet can be used to store your crypto assets as well as transact with other wallets globally at lightning-fast speeds.

By enabling cross-border transactions, the CoinDCX wallet facilitates seamless transactions across the globe. The same wallet can be used for fiat-to-crypto trades as well as crypto-to-crypto trades on the CoinDCX platform. Its powerful technology makes it possible to Trade on Spot, margin, future, and lend using a single wallet. Users can rest assured that their digital holdings are kept safe in the cold wallet storage, which is shielded from online hacks. Complete fund safety is ensured by BitGo, in addition to other security features such as two-factor authentication and withdrawal confirmations.

How to create a wallet on CoinDCX?

Visit the CoinDCX webpage here and sign up to register as a new user. You will be prompted to create an account using some basic personal details.

Following an OTP verification via a mobile phone SMS, you will be logged into your account. The wallet dashboard will show all details as illustrated below.

Don’t wait any further to sign up to the best trading platform CoinDCX!

 

Crypto wallets Explained

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