There are two types of digital wallets, hardware and software. Hardware wallets look like USB drives and are a physical storage space for tokens and coins. These wallets have private keys and password-like codes that allow you to decrypt the wallet’s contents. Losing the private key means that you will lose your wallet’s contents. Software wallets are secure online storage spaces. Both types of wallets store private keys but are very different.
Cryptocurrency wallets are software systems used to store and manage private keys. They also use a password, usually a random string of alphanumeric characters, to validate transactions. Users can choose from a variety of wallets, and all offer a variety of features and functions. For example, Exodus’ Wallet allows you to store and exchange bitcoins securely, and you can view real-time charts of your cryptocurrency portfolio. Unlike traditional wallets, digital wallets let you buy and sell digital assets without relying on centralized exchanges. Both wallets encrypt transaction data, including bitcoin private keys, and have built-in features enabling face and Touch ID.
Cryptocurrency wallets may be fungible or nonfungible. Unlike fiat, nonfungible tokens are one-of-a-kind. For example, Bitcoin is fungible, meaning that one Bitcoin can be exchanged for another. However, nonfungible tokens are one-of-a-kind and cannot be duplicated. When deciding which cryptocurrency wallet to use, research and learn about the type of digital asset you’re dealing with. Some of these assets were never designed for investment purposes, so choose the right type for your needs.
Coinbase Wallets are an excellent choice for cryptocurrency users. The Coinbase wallet makes it easy to buy and sell cryptocurrencies at profitable margins. Users can also use the Coinbase wallet to access significant fiat currencies, including the US Dollar. Coinbase also has KYC rules implemented at the company level to protect its customers.
If you want to learn more about why crypto exchanges, digital wallets and NFTs need to increase their security measures, you can read this infographic from LoginID. You can also visit their website for more professional help in terms of the latest security systems.