1.What is similar to the bank, where user
1.What is cryptocurrency wallet?It is a software that stores and protect public and private keys and interact with variousblockchain to allow users to send and receive digital currency and monitor their balance. If onehas to buy or sell cryptocurrency one need to have digital wallet. This wallet contain publicand private keys. As in a survey in 2018 there are nearly 1300-1400 cryptocurrencies out ofwhich first and best known in bitcoin. Cryptocurrency is stored decentral and available inpublic ledger. When a person uses cryptocurrency he has to decide who can have access to hiswallet or access to private keys. It is similar to the bank, where user need to trust the providerto keep his or her cryptocurrency safe nd secure and out of reach of non access user. Sobasically wallet stores all your public and private eys, allows you to send and receivecryptocurrency and act as personal ledger of transaction without any scope of being tracked bypublic authorities or any user.2. Popular wallets for Bitcoin todayBitcoin is the first and the most popular cryptocurrency till date and it is the most costlycryptocurrency dominating rest of the cryptocurrency in todays time.a) Paper wallet – A paper wallet is simpe document that contain all the information oneneed to generate the bitcoin private keys. In layman terms we can say that it is a pieceof paper with a QR code that can be scanned into a software wallet when one so desire.By storing this infom offline, one can trust oneself. There is no need to trust anyone forit as the user will have all the information with himself which he requires to cotrol andaccess there bitcoin. It is one of the strongest ” cold storage” method. I wouldrecommend to use a paper wallet so one can have a physical backup of theprivate key. This is the best method to secure keysb) Ledge or Trezor wallet- These are hardware wallets in short. When one start thinkingabout using hardware storage solutions for there cryptocurrency, person know he’vegotten serious. These dongles both make the best bitcoin wallet list because of theirsafety and mobility. Plus, they’re good enough for professional investors.Both wallets are highly recommended. They eliminate counterpart risk and greatlyreduce cybersecurity risk like risk refers to the risk of losing bitcoin to the exchangewhere one had bought the bitcoin due to hacking or any cyber loss.But just drawback is that these are not free. Trezor cost about 90 euros while LedgerNano S cost about 60 euros.c) Electrum- It is software wallet.It is a free storage option in bitcoin community and isone of the most trusted destop storage apps out in the market. It is easy to use and haveuser free interface.It is available right now on Android platform. It is reliable. User havethe permission to control private key. There are many other wallets in market whichdoesnot give all permission to control private keys which adds an extra risk.d) Blockchain.info- It is an online wallet. Web-based wallets can pose some security andhacking risks too, but they don’t have quite the glaring target on their backs thatexchanges do.3. How wallet works?Cryptocurrency wallets are software programs that store your public and private keysand interface with various blockchain so users can monitor their balance, send moneyand conduct other operations. When a person sends you bitcoins or any other type ofdigital currency, they are essentially signing off ownership of the coins to your wallet’saddress. To be able to spend those coins and unlock the funds, the private key stored inyour wallet must match the public address the currency is assigned to. If public andprivate keys match, the balance in your digital wallet will increase, and the senders willdecrease accordingly. There is no actual exchange of real coins. The transaction issignified merely by a transaction record on the blockchain and a change in balance inyour cryptocurrency wallet.4. Types of WalletThere are a number of different types of wallets we can use including online, offline, mobile,hardware, desktop, and paper. Each wallet type refers to what type of medium the wallet isstored on and whether or not the data is stored online. Some wallets offer more than one methodof accessing the wallet like accessing via desktop and a mobile Here is a quick breakdown ofthe different types of cryptocurrency wallets:Desktop Wallet: These are those wallets which are downloaded and installed on personalcomputer. These are only accessible from that single computer on which it is installed. It offersone of the highest levels of security as only that user can access who has access to that personalcomputer. But there might be possibility if the computer get hacked or get a virus then someother user can use it and can take access to that wallet without knowing. So it is better to haveinstalled antivirus and malware stopper to protect your wallet from getting hacked.Mobile Wallet: A wallet that runs from a smartphone app. The best part is that user can use itanywhere he or she want and can carry out transaction at a instance. Like in india there is azebay app which runs on android and ios platform. These are simpler and smaller as comparedto desktop and are very user friendly. Just the main threat is that if the phone get lost andsomeone get access to it user cannot do anything to prevent the transaction at a instance. Soone should be aware of this fact.Online Wallet: An online wallet is literally a web-based wallet. This runs on the cloud.Basically one needs to access the website to use it. In this user has too trust the online webcompany which is providing exchange of cryptocurrency. User has to see that adequatepermission are being given to control there private and public keys so that on the other end thecompany do not have access to there keys. Since this is controlled by third party so there mightbe the risk of attack and threats. User can loose data if website get hacked up.Hardware Wallet: Dedicated hardware that is specifically built to hold cryptocurrency andkeep it secure. This includes USB devices. These devices can go online to make transactionsand get data and then can be taken offline for transportation and security.Paper Wallet: These are easy to use and they provide a high level of security. Term paper referto a physical copy of private and public keys which can also refer to piece f software that isused to generate pair of keys which can then be printed. Transferring Bitcoin or any othercurrency to your paper wallet is accomplished by the transfer of funds from your softwarewallet to the public address shown on your paper wallet. Alternatively, if you want to withdrawor spend currency, all you need to do is transfer funds from your paper wallet to your softwarewallet. This process, often referred to as ‘sweeping,’ can either be done manually by enteringyour private keys or by scanning the QR code on the paper wallet.5. Benefits of using walleta) Better security- One can choose the type of wallet and level of security he or she needs whiledoing crypto transactions. If the person doesn’t trust third party so h can go for either paperwallet or mobile or hardware based wallet instead of going to web based or online wallet.b) Cut out any middle man- There is no third person to be required while carrying outtransaction or purchase or sell of cryptocurrency. Only the person who holds the public andprivate keys have sole access to it. So which could be possible by crypto wallet.c) Universal recognition by using these wallets. Fortunately, with cryptocurrencies like Bitcoin,that is a non-issue, as the digital currency is universally recognized at a given value. This helpsto save time in determining a price for a transaction, as well as any fees associated withexchanging money from one form to another. As cryptocurrency is increasingly adopted aroundthe world, it is going to make financial transactions faster and simpler, which is a great thingfor everyone involved. Plus wallets have feature that provide exchange rate and transactionfees.