Research in Cryptoccurency

A cryptocurrency wallet is a software program that stores the public and private keys and interacts with multiple block chains that enable the user to store, send and receive digital currency and monitor their balance. The wallet used in case of any cryptocurrency is a digital wallet.

Working and  Types of cryptocurrency wallets

Cryptocurrency wallets are used by millions of people all over the world. Now the question arises how do they work? Well unlike the traditional pocket wallets the digital wallets do not story currency. Instead, a private key(secure digital code known only to the user and his/her wallet) is stored that shows the ownership of a public key( a public digital code connected to a certain amount of currency). So we can say that all that exists are the records of transaction stored on the blockchain.

As we discussed earlier, a cryptocurrency wallet is a digital wallet which is used to store, send and receive digital currency that allows a person to monitor the balance and conduct other operations. Now when a person sends you any kind of digital currency, actual ownership of the coins are being signed off by that person to your wallet address. If the private key which is stored in your wallet matches with public address the digital currency is assigned to, you can unlock the funds and spend those coins. The balance in your digital wallet increases and the senders decrease accordingly. There is no exchange of real coins. The transaction is signed by only by a transaction record on the blockchain and a change in balance in your digital wallet.

There are various types of wallets that provide the user with different ways to store and access the digital currency. Each type of wallet refers to what medium the wallet is stored on and whether the data is stored online or not. The digital wallets can be divided into three distinct categories.

1. A hardware wallet is a special type of wallet which stores the user’s private keys in a secure hardware device like a USB. These devices can go online to make transactions and get data and then can be taken offline for transportation and security.
2. A software wallet can be a desktop, online or mobile wallet.
3. Desktop wallets are wallets that store the private key for your Bitcoins on your hard drive. They are downloaded and installed on a PC or laptop. They are only accessible from the laptop or PC in which they are downloaded. Desktop wallets offer one of the highest levels of security.
4. Online wallets also called web wallets are the wallets that run in your web browser just like any other website. While they are more convenient to access, they store your private keys online and are controlled by a third party which makes them more vulnerable to hacking attacks and theft.
5. Mobile wallets are the wallets that are run from a smartphone app. They can be used anywhere including retail stores. They are much simpler and smaller in size as compared to the desktop wallets due to the limited space available on a mobile.
6. A Paper wallet is simply a public and private key printed together. It is an offline wallet and is usually regarded as a type of “cold storage” (extra-secure storage that does not make contact with the hackable internet). As the name suggests, paper wallets are usually made out of paper, although technically they could also be made of plastic or any other substance on which information can be durably printed. What is printed on the paper wallet are the private and public keys, usually in QR form, with the latter also serving as the address? You could just copy and paste the keys into a text document and print that out (erasing the copy on the computer afterward). Or you could use one of the free web services that generate the printable wallet for you.

Questions about cryptocurrency wallet

1. MULTI-CURRENCY OR SINGLE USE? Although Bitcoin is by far the most well-known and popular digital currency, hundreds of new cryptocurrencies (referred to as altcoins) have emerged, each with distinctive ecosystems and infrastructure. If you’re interested in using a variety of cryptocurrencies, you don’t need to set up a separate wallet for each currency. Instead of using a cryptocurrency wallet that supports a single currency, it may be more convenient to set up a multi-currency wallet which enables you to use several currencies from the same wallet.
2. ARE CRYPTOCURRENCY WALLETS ANONYMOUS? Wallets are pseudonymous. While wallets aren’t tied to the actual identity of a user, all transactions are stored publicly and permanently on the blockchain. Your name or personal street address is not stored, but data like your wallet address could be traced to your identity in a number of ways.
3. ARE CRYPTOCURRENCY WALLETS SECURE? Cryptocurrency wallets are all built to be secure but the level of security depends on a couple of things. One is the type of wallet you use and the other is the service provider. Online wallets can be exploited by hackers to steal your funds while the Offline wallets cannot be hacked because they are not connected to an online network and don’t rely on a third party for security. Since online wallets can turn out to be vulnerable to hacking attacks, some severe precautions are needed to be taken.
4. BACKUP YOUR WALLET: It’s smart to back up your wallet and private keys and to encrypt them. At least one backup should be on a CD or thumb drive to ensure that you have a “hard copy” laying around. If you lose your wallet or your keys, then you lose the currency connected to it. Keep your software up to date so that you have the latest security enhancements available. You should regularly update your wallet software as well as the software on your computer or mobile. It is better to use wallets that have a good reputation and provide extra security layers like two-factor authentication and additional pin code requirements every time a wallet application gets opened. Wallets like Armory or Copay which are multi-signature wallets should be preferred. A multi-signature wallet requires the permission of another user or users before a transaction can be made.

Choosing a cryptocurrency wallet

Considering the ever-growing list of options, the choice of the cryptocurrency wallet utterly depends on the usability requirements of the user. Some users would like to use several currencies while some would like to use one single currency. Similarly, some users would require to access to the digital wallet from anywhere while some wouldn’t. So, selecting a cryptocurrency wallet depends on the feasibility of the user.

Bread Wallet

Bread Wallet is a simple mobile Bitcoin digital wallet that makes sending bitcoins as easy as sending an email. They can be downloaded from the app store or google play. Bread wallet is a real standalone bitcoin client. There is no server to get hacked or go down, so you can always access your money. Using SPV mode, bread wallet connects directly to the bitcoin network with the fast performance you need on a mobile device.

Pros:

• It is a beginner-friendly, open source software and free of cost.
• It has good privacy or security.

Cons:

• It is a hot wallet.
• It doesn’t have the web or desktop interface.

Armory

Armory is an open source bitcoin wallet providing cold storage and multi-signature support for the slightly more advanced cryptocurrency community. Although Armory takes a little while to understand, it’s a great option for more tech-savvy bit coiners to keep their funds safe and secure.

Pros:

• It has good privacy, great security features, multi-signature options, one-time printable backups, multiple wallets interface, GPU-resistant wallet encryption solid cold storage options.

Cons:

• It is only accessible via the desktop client, not for beginners.

Ledger Nano

The Ledger Wallet Nano is a new hierarchical deterministic multi-signature hardware wallet for bitcoin users. It is a multicurrency wallet made on a smart card device and it is very light in weight. It needs to be connected to a USB port directly so as to manage the user’s account, safeguard Bitcoins, making secure payments. It works perfectly with Mac or Linux machines and it is also companionable with Google Chrome on Windows 7-10, Mac 10.8+ and Linux. The small-sized device comes with free updates. The Ledger Nano S puts to use normal USB ports and can also be utilized through a cellular device with a USB adapter.

Pros:

• The Screen/device is protected by metal swivel cover. It has multi-currency support
• It is fairly inexpensive ($65 USD).

Cons:

• It can’t create hidden accounts. It is not an advanced wallet software because of no transaction labeling. It has no password manager.

Exodus

Exodus is a multi-cryptocurrency wallet that boasts an easy-to-use UI. It is relatively new and unknown digital wallet which is currently only available on the desktop. It also offers a pretty simple guide to back up your wallet. Exodus has a built-in exchange that allows you to instantly trade the supported coin between themselves.

Pros:

• It is a beginner-friendly, open source software and free of cost. It has good security, privacy, and in-wallet trading. It supports multiple currencies and is easy to use.

Cons:

• It is a hot wallet.
• It doesn’t have the web interface and mobile app.

Copay

Copay is a Hierarchical Deterministic wallet. This means that funds in the wallet can be restored using old backups, diminishing the risks of losing funds. The extra security of using different addresses for each bitcoin transaction is also a positive security feature alongside multi-signature capabilities. Copay allows users to check prices in over 150 currencies. /

Pros:

• It is a beginner-friendly, open source software and free of cost. It has good security and privacy, multi-signature transactions, multiple wallet storages. It has HD address generation.

Cons:

• It can be slow and unresponsive.
• It provides limited user support.

Trezor

Trezor is a hardware wallet which provides a high level of security without sacrificing convenience. Unlike cold storage, Trezor is able to sign transactions while connected to an online device. That means spending bitcoins is secured even when using a compromised computer.

Pros:

• It is a beginner-friendly, inbuilt screen and open source software. It has good security and privacy. The web interface is easy to use

Cons:

• It is expensive in cost ($99).

Green address

The green address is a user-friendly multi-signature wallet with improved security and privacy. It is accessible via desktop, mobile or online with apps available for Android, Chrome, and iOS. A downside is that Green Address is required to approve all payments, so the user does not have full control over the spending.

Pros:

• It has Solid security.
• It is a multi-signature, beginner-friendly, open source software and free of cost.

Cons:

• It is a hot wallet.
• It has average privacy.
• The third party must approve payments.

Mycelium

The Mycelium mobile wallet allows iPhone and Android users to send and receive bitcoins and keep complete control over bitcoins. No third party can freeze or lose your funds. It has some useful features like cold storage and encrypted PDF backups, an integrated QR-code scanner, a local trading marketplace and secure chat amongst others.

Pros:

• It is an open source software and free of cost.
• It has good privacy and advanced security.

Cons:

• It is a hot wallet.
• It doesn’t have the web or desktop interface.
• It is not for beginners.