The chances of cryptocurrency bringing prosperity to your life are infinite. To put it succinctly, cryptocurrency is the future.
Owing to this, today is the best time to invest your hard-earned money into it as its value is surging day and night – up to six figures! Can’t believe it? I guess so. To explain it further, study the prediction of David Grider, a fund strat strategist.
He said that there is a chance of Ethereum’s value climbing up to $10,500 after the recent skyrocketing to new heights. As this post is for novices, so before jumping into our main topic, let’s have a glimpse over the basic terms.
If you are already familiar with Cryptocurrency and its types, then skip to “Cryptocurrency Wallets”.
Everything You Need To Know About Cryptocurrency
Here’s how Merriam Webster defines Cryptocurrency: ” any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.
” Or simply it is a digital currency without any hustle-bustle of a bank system and is managed (sell + bought) virtually. Each and every proceeding is added and recorded in the system.
This is the prime reason why many people have full confidence in it as it offers absolute control and safety of their money. Withal, this is why thirty-six percent of Americans are convinced that cryptocurrency transactions will prevail in the coming decade.
Cryptocurrency: Altcoins Vs. Tokens
· Altcoins or Alternative Cryptocurrency Coins
Any virtual coin, except Bitcoin, is called an Altcoin or “Alternative to Bitcoin. ” Likewise, Bitcoin is another renowned cryptocurrency, which came into existence by providing quick (computer-based ) solutions to extremely intricate math problems.
It is functioning independently – without any support from the Government or under a bank and is stored in a cryptocurrency hardware wallet. Below are a few examples of altcoins:
• Namecoin ( first altcoin, made in 2011 )
Altcoins, like Bitcoins, come in a limited amount. For instance, in the case of Bitcoins, the company decided to produce twenty-nine millions of Bitcoins only.
Once this count will be completed, there won’t be any Bitcoin mining until and unless the authorizes it. 18.5 million marks are already completed.
Like stock offerings, tokens are produced and dispensed out by Initial Coin Offering also known as ICO. There are three main types of them and they are listed below:
1. Security Tokens: used in your account’s protection
2. Value Tokens: digital currency e.g. Bitcoin
3. Utility Tokens: assigned to specific purposes
Types of Cryptocurrency
Here is a rundown of prominent cryptocurrencies you hear every now and then:
Bitcoin is the king of cryptocurrencies – it’s the most well-known one. It is approximately the same as the whole Cryptocurrency system.
It is nearly the same as Bitcoin; the only difference between them is their block size. Bitcoin Cash’s block size is 8 MB whereas, Bitcoin’s block size is only 1 MB.
Ethereum serves as an ” app store. ” It does not focus on virtual currencies. Instead, it is more concerned with mobile applications.
Some other common cryptocurrencies include:
Cryptocurrency wallets are not different from your regular billfolds, except for the fact that these only exist virtually.
You store your digital currencies in these; dealing with cryptocurrency can be restless as there is always a risk of the spiteful activity. On account of this, crypto wallets are uniquely designed for the safety of your assets.
These wallets are for those individuals who prefer to have absolute authority over their belongings. A software wallet resides in the hard drive of your computer which is responsible for storing your Bitcoins.
That’s why it is named ‘ Bitcoin Core. ‘ In this way, your Bitcoins can only be accessed by you via your desktop.
Note: when you install a software wallet on your desktop, wallet.dat is automatically created which contains your complete information regarding your personal wallet.
So, to minimize the risk of breaching, securing it with a strong password is highly recommended.
Why a Crypto Wallet Is Better Than A Software Wallet
Opting a wallet can be quite intimidating. You have to contemplate an exhaustive list of factors. To get to the bottom of it, we present you with this concise comparison of a cryptocurrency and software wallet.
Cryptocurrency Wallet Vs. Software Wallets
Contrary to the Blockchain world, hardware wallets are tangible and often come in the form of USBs. If you have a handsome amount of money for investment purposes and don’t wish to trade regularly, then a hardware wallet is best for you.
Also, your unique keys will be stored here and protected by password/passphrase. It means that only you have access to it. Moreover, it’s nearly impossible for hackers to attack your device since it’s unreachable for them.
On the other hand, software wallets are much like the Blockchain world i.e. they exist virtually. As they exist inside your computer’s hard drive, the possibilities of your personal wallet being hacked are huge. If you are a trader then this might be suitable for you.
Anything which involves the internet is risky and hence, your wallet’s protection too. It is because you need the internet to download the software, which can fall prey to wrongdoers.
In addition, you have to double-check that your wallets support your type of coins as these are made to keep specific coins only.
In the end, it’s all about you and your business needs. Generally, hardware wallets are more safe, secure, and easy to use as compared to software ones.
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