Why keep cryptocurrency on your wallet? Many people don't know how to use the cryptocurrency wallet, what it does, and how to use the cryptocurrency wallet better. So much so that the cryptocurrency he owns is easily stolen and a fortune is lost. Let's learn together how to keep your crypto wallet safe! Protect your wealth.

What Is a Crypto Wallet?

The first lesson of crypto wallets is that they are nothing like a wallet or wallet in a back pocket, which can hold cash and credit cards. Instead, a crypto wallet is a form of digital storage used to secure access to cryptocurrencies.

Cryptocurrencies are a highly abstract store of value, with no physical tokens similar to cash coins and notes. It exists only as a string of code on a larger blockchain.

What do you actually own when you buy Bitcoin (BTC)? Public and private keys on the BTC blockchain.

Think of a public key as your bank account number -- you can share it with anyone, but it can't give you your money.

A private key is like the password to your bank account. Please don't share it with anyone, or they might steal all your money.

If you lose your private key, you may not be able to access your cryptocurrency. Similarly, the person who holds the private key has full access to the cryptocurrency. Keeping your private key securely in an encrypted wallet is essential.

"Coins and tokens are part of the blockchain system in the form of data, and wallets are a means of accessing them," said Martin Leinweber, digital asset product strategist at MarketVector Indexes.

How Do Crypto Wallets Work

Crypto wallets store the public and private keys needed to send, receive, and store cryptocurrencies.

When you buy cryptocurrency, the company you're buying it from may give you a wallet to keep the digital coins in. This is called a hot wallet because it is online and connected to the Internet.

“To avoid the risk that hackers might steal your online wallet, you can get a cold wallet which is not connected to the internet,” says Ric Edelman, founder of Digital Assets Council of Financial Professionals.

Cold wallets are essentially thumb drives or another type of hardware device. “Once you have one, you simply transfer your coins from your hot wallet to your cold wallet,” Edelman says.

How to Keep Your Crypto Wallet Safe

Check out these tips to make sure your assets are safe and secure in your crypto wallet:

Check your account regularly. You must regularly check your crypto wallet to make sure your account looks organized and that you can quickly spot suspicious activity. Crypto wallets and digital wallets are different from physical wallets that you carry in your pocket or bag because when your physical wallet goes missing, you may notice it quickly. "Phone, keys, wallet" is a catchphrase most of us sing before leaving the house. Also, everyone knows the immediate steps to take when a physical wallet goes missing: retrace your steps, suspend credit and debit cards, apply for a new driver's license. If you think there's something wrong with your wallet, cancel all credit cards associated with your account, change your password immediately and set up two-factor authentication if it's not already set up.

Set up two-factor authentication. When it comes to login security, always ensure that two-factor authentication is enabled. This is one of the best ways to deter thieves. If your device is biometric certified, even better. This means that your account can only be opened by scanning your face, voice or fingerprints.

Know how to spot crypto wallet scams. Beware of phishers who may be trying to access your cryptocurrency account all the time. If someone asks for your private key via email, text, phone, or regular mail, ignore the correspondence and be on high alert. Never share your private key with anyone! Phishing attempts often use fear or excitement to trick people into giving away personal information, so don't trust messages from crypto companies masquerading as contests or requiring your private key to restore your account.

What’s the best wallet to store cryptocurrency safely?

Using a hardware wallet -- sometimes called "cold storage" -- is widely considered the most secure method of storing cryptocurrencies. It's backed up by security experts and keeps your private key offline -- so no one can access your cryptocurrency except the holder of a specific access code.

As you recall from Part 2 of this series, a hardware wallet works by generating a set of private keys that you should safely keep offline. The wallet itself is protected by a 4 - to 8-digit PIN - after a few failed access attempts, the device is erased to prevent physical theft.

It's worth noting that not all hardware wallets are created equal. The precise level of security you get from your hardware wallet will depend on its functionality, so it's worth digging into your provider to make sure you're comfortable with the level of security and controls provided.

Some things to look for in a premium hardware wallet:

Recovery phrase: This is a code (up to 24 words) that stores all the information needed to recover the wallet. If your hardware wallet is lost, stolen, or damaged, you don't necessarily lose access to your cryptocurrency: The Recovery phrase allows you to access your coins through a digital wallet or a new hardware wallet.

Password:

Level of security: By now you will be aware of the importance of security, so look for a high quality security chip in your wallet - preferably one that is certified.

Ease of use: You'll naturally want an easy-to-use hardware wallet that gives you direct control over your cryptocurrency and gives you broad access to the cryptocurrency services you're after.

The above explains what a cryptocurrency wallet is and what it does. I believe you already know how to use cryptocurrency wallets to protect the security of your virtual currency.