Beginner's Guide: Cryptocurrency Wallets

What is a Crypto Wallet?

True to its name, a crypto wallet is an application used to receive and send cryptocurrencies. Of course, its function goes far beyond that. Your crypto wallet is your passport and pass. You can receive or send transactions and initiate other activities on the blockchain.

How Does a Perpetual Contract Crypto Wallet Work?

Your cryptocurrency is not "stored" in your wallet, but exists on a decentralized database—the blockchain, and the crypto wallet is your blockchain interface. To query your information or send cryptocurrencies or NFTs to you, your public key, which is the wallet address, is required. To fully access your account and everything in it, your private key is required, which is a long string of mixed numbers and letters that look completely random. For convenience, the wallet will generate a seed phrase as an alternative to the private key.

Anyone can send transactions to your address, but to unlock your "vault" and sweep it clean, they must hold the private key. This move has its pros and cons. If you lose your seed phrase or private key, you will also lose access to your cryptocurrency. In fact, according to analysis, 6 million Bitcoins have been completely lost, accounting for almost one-third of the total circulating supply of Bitcoin.

However, the situation will improve as Ethereum's account abstraction proposal (EIP-4337) will support wallets running on smart contracts. This makes permission control more flexible and simplifies the account recovery process.

Comparison of Different Crypto Wallets

Like almost everything else, crypto wallets can be divided into various types. They can be divided into hot wallets and cold wallets—hot wallets are wallets that can connect to the network, and cold wallets are wallets that cannot connect to the network; they can also be divided into custodial wallets and non-custodial wallets, depending on whether your keys are stored by a third party. In addition, there are three subcategories divided by medium:

Paper Wallets

Compared with traditional wallets, they are more like paper keys, because this form of wallet writes the seed phrase (or key, as you like) on a physical medium such as a piece of paper. Since no paper in the world can connect to the Internet on its own at present, as long as you take appropriate measures to protect your piece of paper, your cryptocurrency will hardly be subject to cyber threats. Paper wallets have an obvious disadvantage, that is, every time you want to do something with the wallet, you have to toss back and forth before you can finally see your cryptocurrency online.

Security: ★★★★★

Convenience: ★

Hardware Wallets

These types of wallets are USB flash drives that store private keys. When a transaction needs to be executed, simply connect the hardware wallet to the computer and authorize it. Similar to paper wallets, most USB flash drives cannot connect to the Internet on their own. Hardware wallets are almost as secure as paper wallets, but are several levels higher in terms of convenience.

Security: ★★★★☆

Convenience: ★★★

Software Wallets

Keeping the wallet connected to the Internet at all times can bring great convenience in operation, but it bears considerable risks in terms of security. Software wallets can be used on desktops and mobile devices, in the form of computer programs, browser extensions, or mobile apps. These wallets provide a user-friendly interface and seamless experience for your various operations. However, these conveniences come at a price, as devices can be hacked, users can be scammed, and third parties entrusted with private keys can be attacked or act maliciously.

Security: ★★★

Convenience: ★★★★★

Which Crypto Wallet Should You Choose?

Sorry, there is no definitive answer, as it entirely depends on your needs and preferences. However, we can still offer some advice.

Security First

For users who put security first, we recommend using a hardware wallet. These devices are almost the most secure and easier to track records and operate.

Old-school Desktop

If you are used to browsing and investing on a desktop, then Metamask—a non-custodial wallet in the form of a browser extension chosen by millions of crypto enthusiasts worldwide—might be your first choice. It is currently the most popular wallet on all Ethereum-based platforms.

Carry Crypto with You

Smartphones have become an indispensable part of our lives, and the same applies to cryptocurrency. There are hundreds of mobile wallets on the market today.

Trade and Store

You can also store your cryptocurrency on this trusted centralized exchange. The exchange has established a dedicated protection fund to defend against cybersecurity threats.

Step 1: Register an XXKK account.

Step 2: Set up your account. Please bind your email, mobile number, Google Authenticator, and set the fund password required for withdrawal.

Step 3: Use a debit card, bank top-up, or third-party payment.

All set! You can now start enjoying an easy-to-operate trading experience, backed by 24/7 customer support and a $300 million protection fund.

Everything is ready, trade now!

XXKK provides one-stop trading services for cryptocurrencies, stocks, and gold.