In the context of the 4.0 Technology Revolution, digital wallets have emerged as a clear symbol of progress in the fields of payment and investment. Cryptocurrencies such as Bitcoin, Ethereum, and many other altcoins are attracting increasingly strong attention and participation from the global community. Along with that come concerns about security, price fluctuations, and control from traditional financial institutions. Get to explore more deeply about digital wallets and how they have changed the way we manage and use finances in the digital age.
I. What is a digital wallet?
Digital wallet is a term extremely familiar to virtual currency investors. Source: stormgain.com
Digital wallets can exist in the form of software or hardware devices capable of storing digital assets. A virtual currency wallet has two main components: Publish key (public key) and Private Key (private key).
Publish key is the user’s wallet address to receive money.
Private Key is the component that has the function of accessing the wallet to track the number of coins available.
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II. Benefits and functions of digital wallets
Digital wallets help digital currency investors trade and store digital assets effectively. Source: redot.global
Digital wallets have several main functions such as:
- Receive and transfer digital money easily via the Internet to help users pay quickly.
- Use to pay online with platforms that use virtual currency.
- Can be used as an account to store money and digital assets online.
- Allow users to view account balances as well as fluctuations in money amounts.
Cryptocurrency trading wallets have several advantages such as:
- Bring convenience and efficiency to paying virtual currency bills
- Save time and effort.
- Easily pay, transfer, and receive money in seconds.
- Account statements can be made to track income and expenses.
- Low account maintenance costs.
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III. The most reliable cryptocurrency trading wallets today
Currently, there are many types of digital wallets created to serve people’s consumption and transaction needs. Below are some of the most popular types of cryptocurrency trading wallets.
3.1. Software wallet
Exodus is the most popular software wallet today. Source: masterthecrypto.com
Advantage:
- Convenience and Flexibility: Mobility and convenience make asset management easier.
- Easy to Use: A friendly interface helps new users quickly get acquainted and used.
- Service Integration: The software wallet integrates many convenient services for users in one application.
- Social Networking Ability: Can connect with the community and share information on social platforms.
Disadvantage:
- Risk of loss of safety: Increased risk of loss of safety due to online connections, especially when security measures are not taken.
- Dependent on the Internet: An Internet connection is required to access and perform transactions.
- Store Keys on the Server: Some services store private keys on the server, increasing the risk of losing security.
Popular Types of Software Digital Wallets:
- Coinbase: Easy to use for newbies, offers buying, selling, and storage services.
- Exodus: Multi-crypto platform wallet with user-friendly interface and portfolio feature.
- Electrum: Known for its fast speeds, mainly for Bitcoin.
- MyEtherWallet (MEW): For Ethereum and ERC-20 tokens, allows management via a web browser.
- Trezor Suite: Combination of a software wallet and hardware wallet, enhancing security.
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3.2 Hardware wallet
Ledger Nano X is a hardware wallet that helps store many different virtual currencies. Source: metaverse-studio.fr
Hardware wallets, also known as cold wallets, are designed on a compact device like a USB. Users will transact and access their funds through this device.
Advantage:
- Highly secure: Hardware wallets are immune to cyber attacks due to PIN protection and personal backups.
- Privacy guaranteed: Users can use resources from hardware wallets without going through identity verification.
- Internet-independent: Users can use offline hardware wallets to conduct their transactions.
- Multiple Currency Support: Modern hardware wallets allow users to store a large number of different cryptocurrencies.
Disadvantage:
- Low liquidity: Assets and cryptocurrencies stored in hardware wallets are not as easily exchanged for cash as in software wallets.
- High cost: To use hardware wallets, users need to pay a certain fee.
- Cumbersome access procedures: If a user loses access or their private key leaks, no one can help them access the wallet again.
Popular types of hardware wallets include:
- Ledger Nano: It is a type of hardware wallet capable of supporting more than 1800 cryptocurrencies, with a small, light and convenient size.
- Trezor Model T: Allows users to access third-party cryptocurrency exchanges, offers unlimited storage, and secure personal password storage.
- Cool Wallet Pro: A hardware wallet capable of connecting Bluetooth to devices using Android and iOS operating systems, making it easy to track and trade coins.
3.3. Paper Wallet
Paper wallets allow users to transact without an Internet connection. Source: portaldobitcoin.uol.com.br
Paper Wallets are considered the most basic form of cold wallets, allowing users to generate private keys and wallet addresses in the form of QR codes.
Advantage:
- Many types of assets and cryptocurrencies can be stored through QR codes, which makes transactions more convenient.
Disadvantage:
- Easy to damage and reduce quality: If the paper wallet’s code is blurred or torn, users cannot access the wallet address.
- Security risks: To transfer money in a paper wallet, users must connect to the Internet, making transactions face many risks.
Some popular paper wallets are MyEtherWallet, BitAddress…
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3.4. Cross-platform wallet
A cross-platform wallet is a type of cryptocurrency exchange wallet capable of storing cryptocurrencies on multiple platforms such as macOS, iOS, Windows, Linux, and Android.
Advantage:
- High security: Multi-platform wallets are highly secure because they use algorithms and store users’ private keys.
- Capable of supporting many different types of assets and cryptocurrencies.
- Potentially allows users to recreate wallets in case the device is damaged or lost.
Disadvantage:
- Usage and transaction costs are complex and unclear,
- Trading from mobile devices such as smartphones is not possible.
- Do not support 2-factor authentication and contain many complex characters.
Popular types of cross-platform wallets:
Atomic Wallet and Jaxx are the two most popular multi-platform wallets today:
Atomic multi-platform wallet helps users simplify the process of managing, using, and storing their digital assets effectively. Atomic Wallet is a completely reliable application for using and trading virtual currency with a highly secure system.
Jaxx wallet is a cross-platform wallet, compatible with many operating systems such as Windows, and Linux, and browsers such as Chrome and Firefox. Jaxx has an outstanding feature of wallet backup to help users protect their assets when there is a problem with their devices.
3.5. Browser-Based Wallets
Metamask is an electronic wallet that operates based on web browsers. Source: thegioididong.com
Advantage:
- Able to support most types of Blockchain such as Ethereum, BNB chain, Solana, …
- Flexible usage costs: When using a browser-based wallet, transaction fees will depend on the user’s needs and frequency of use.
- Ability to trade Tokens anytime, anywhere.
Disadvantage:
- Low security: User accounts can be threatened by hackers.
- Personal information leak: Users can have their personal information stolen because the wallet operates on browsers.
There are two popular browser-based wallets today: MetaMask and Trust Wallet:
- MetaMask
MetaMask is an electronic wallet that is integrated as an extension application to operate on many browsers such as MetaMask Chrome, Firefox, Brave, and Opera… The advantage of MetaMask is its user-friendly interface, saving time thanks to its functionality. Account backup feature…
- Trust Wallet
Trust Wallet acts as an application that connects individual Blockchains to store and trade cryptocurrencies. Trust Wallet is an almost free application because transaction fees when withdrawing funds are returned to miners on the Blockchain network.
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3.6. Online wallet
Advantage:
- High liquidity: Because it is a popular type of wallet, money stored on online wallets has high liquidity and is easy to transact.
- Highly secure and extremely reputable
- Completely free of cost: Users do not lose any money when using online wallets.
Disadvantage:
- Not supported in some countries
- Transaction confirmation time is quite long
- Only a small number of cryptocurrencies are supported.
Currently, Coinbase and Binance are the two most widely used online wallets.
Conclude
Thanks to digital wallets, users can trade and store virtual money easily, quickly, and safely. Hopefully, the above information will help you have a more comprehensive view and choose the type of wallet you trust to transact.
Currently, BAP Software is implementing many projects on digital wallets, blockchain, and crypto. If you need to use these services, please contact us immediately. BAP is always ready to give advice and support. Best regards!
