To get started with blockchain quickly, you need to have a general understanding of the concepts of bitcoin and blockchain. In the process, it’s hard to avoid lots of problems.
For example, in past issues of NeoLine Talk, we’ve talked about that digital currency wallet is not a carrier for storing digital currency. However, there’s still a lot of confusion around this. Today, we’re going to know more about the digital currency wallet.
01
What are the general types of wallets?
The most famous feature of the blockchain is open 、transparent and cannot be tampered with, so everyone’s encrypted assets can be seen on the blockchain. So that it is necessary to choose a suitable encrypted asset wallet.
There are two types of encrypted asset wallets mentioned daily: cold and hot. Oddly enough, wallets are classified as cold and hot, depends on whether they need to be connected to the internet.
Cold wallets are hardware wallets that do not require an internet connection. They can be divided into hardware wallets, paper money wallets and brain wallets. Cold wallets are often used when there are large quantity assets and they are not used frequently.
Hot wallets need an internet connection, which can be divided into single-chain wallets and multi-chain wallets, which are relatively less secure, but more convenient to operate.
These are the two types of wallets that individuals are in charge of their wallets, and they can also use wallets from the trading platform.
02
What exactly is stored in digital currency wallets?
Keys, there are a series of keys called the public key and the private key, both of them are in the wallet. In fact, the wallet just presents the code of the encrypted assets, the encrypted assets are in the blockchain network address.
So in a decentralized environment, if you lose your private key, you lose your encrypted assets. Why?
Suppose you live in an apartment with your friend. When chatting with people, they say they live in an apartment, and public key is similar to this. The address is relatively specific and detailed to blocks and rooms. The private key is the key on the door, and you can only prove that this is your home if you can open the door.
Therefore, it is important to keep your home address and your keys safe, because if you forget your address and lose your keys, you can’t back home. On a decentralized blockchain, it’s not possible to get your card password back if you forget it.
It’s also important to keep your public, private and address keys safe, then you need to pick an easy and secure wallet.
03
Summary
Regardless of the type of wallet you choose to protect your assets, you need to choose the right wallet for your investment situation.
