What is a digital wallet?
A digital wallet is like a bank account. It stores your digital money.Each cryptocurrency has its own wallet. Bitcoin has a wallet for Bitcoin, Ethereum has a wallet for ethereum. There are some multi-currency wallets, but in general it is recommended to use official wallets for each currency.Let’s clarify at this point that on the contrary with your traditional bank account, that wallet belongs to you and not to the bank.
How do digital wallets work? How can i have one?
Almost all “digital currency” wallets function in a similar way. Upon creation of your personal wallet, a “seed phrase” is given. This seed is usually 12-24 words that function as the “keys” to your wallet. For that reason is strongly recommended that in this very first step, you have a simple notepad and a pen with you, so that you store safely and offline your unique key, without which you will have lost access to your digital wallet and money, forever.
So write down your seed phrase, make a copy or two of it in a safe place, and NEVER share the seed with anyone you would not trust your physical wallet with.
The seed-phrase is the personal key to open our wallet. A second phrase ( a series of letters & numbers) will be also given to us which we will call our wallet address from now on. This second phrase is actually our bank account number which we share with whoever we want to receive money from.
Types of Wallets
A software wallet is an application / program (PC software, Android App, IOS App) that is used to store digital currency.
A wallet with material substance. Having a hardware wallet simply means being owners of seed phrase as well of a device (ex usb flash. It is generally considered more secure than simply having a software wallet.
We own an account in an online platform(usually a company owns these platforms) that handles wallets. While your money in the platform are subject to the terms and conditions of the platform. So it is strongly advisable to read those terms and conditions before moving your money there.
List with suggested online wallets
What is an exchange and how it can be used as a wallet?
An exchange is an online platform (usually a company owns these exchanges), in which you can transfer your digital money and exchange them with other currencies both fiat and digital through trading(exchange and margin) or funding. While your money in the platform are subject to the terms and conditions of the platform. So it is strongly advisable to read those terms and conditions before moving your money there.
Which are the most reliable exchanges?
An exchange is considered reliable until it doesn’t. Below you will find a list of recommended exchanges at this date (taken from wikipedia, the free encyclopedia. Link here)
What will i need to sign up with an exchange?
- Verification Documents (usually ID and Proof of residence
- Email confirmations
- Telephone confirmations
Online wallet No2
Details for online wallet No2
What type of wallet should I use (Pros/Cons)
Every type of digital wallet has its unique characteristics hence is followed by some pros and cos. In general, online wallets and exchanges are more flexible and with a wide range of management options for our digital money but also have the serious disadvantage of not being able to guarantee the good intentions of their owners as well as the inherent nature of their security features. In the past there have been cases of loss of property. So do your studies before signing up in one of them. On the contrary, software and hardware wallets are more secure in general, but with less applications for your currencies.