A cryptographic wallet is a type of cryptocurrency storage that uses a combination of cryptography and mathematics to securely store digital assets. It does this by creating a series of private and public keys — referred to as a keypair — which are used to sign transactions and authenticate ownership of the coins or tokens stored in the wallet. Cryptographic wallets provide users with a high level of security, as the private keys are not stored online and cannot be accessed without the user’s knowledge.
Cryptographic wallets are usually divided into three categories: software wallets, hardware wallets, and paper wallets. Software wallets are typically hosted by a third-party provider and hold the user’s private keys on their server. Hardware wallets are physical devices that store the user’s private keys in a secure chip. Paper wallets are pieces of paper that contain the user’s private keys, which must be stored in a secure location.
A hardware wallet is a type of cryptocurrency wallet that stores the user’s private keys in a secure physical device, such as a USB drive. This type of wallet provides the highest level of security for your cryptocurrency since it keeps your private keys isolated from the internet and your computer. The downside is that it requires you to purchase and maintain a physical device and keep it with you at all times. On the other hand, a software wallet is a type of cryptocurrency wallet that stores the user’s private keys on a computer or mobile device. While software wallets provide less security than a hardware wallet – since they are connected to the internet – they do provide convenient access, allowing users to easily send and receive.
The hardware wallet stores the user’s private keys in a secure “chip” inside the device. Transactions are signed using this chip and then broadcast to the blockchain through the hardware wallet’s connection to the internet. Thanks to its secure hardware, the hardware wallet is virtually impossible to hack – even if the device is stolen or lost.
Software wallets have certain fragilities that must be taken into consideration when storing cryptocurrency. These fragilities include the potential for malware, viruses, and hacking to compromise the wallet, as well as the risk of being exposed to malicious actors due to lack of regulation or security measures. Additionally, software wallets are limited in their functionality compared to hardware wallets, and may require setup on a computer or mobile device in order to use them.
It’s important to keep your private keys safe and secure. A hardware wallet helps by keeping your private keys offline, away from potential hackers. Additionally, some hardware wallets offer additional measures such as PIN codes and two-factor authentication to protect your private keys from unauthorized access.
Seed phrases, also known as recovery seeds or mnemonic phrases, are a set of randomly generated words that can be used to recover your cryptocurrency wallet if it is ever lost or stolen. These seed phrases are typically stored on a piece of paper or an electronic device and should never be shared with anyone. If a user forgets their password, seed phrases can be used to recover the wallet.
“Not your keys, not your coins”, is a common adage in the cryptocurrency world and serves as an important reminder that if you do not have the private keys to your wallet, then you do not own the coins or tokens stored in it. This means that unless you have the private keys to your wallet, you cannot access or spend your funds. As such, it is importnt to always keep your private keys safe, secure, and out of the hands of potential hackers. Nowadays there is a solution to keep your private keys safer than a piece of paper. It’s card with NFC technology (Near Field Communication) and a mobile app that can read and write the chip on the card. NFC technology is a set of short-range wireless technologies, typically requiring a distance of 4cm or less to initiate a connection. We have developed an app that allows you to encrypt your account with your NFC card, thus allowing you to read and write on the card’s chip in a totally secure way, since both the writing and the reading of the chip are done with the mobile phone offline (the mobile data being turned off before entering the chip reading and writing mode). Your seed phrases are stored on an NFC chip, impossible to read by anyone who accesses it, since you need to sign in the account that has the access information to read the encrypted chip. Each user can only read their cards and each card can only be read by the user who encrypted it. This product is NFC Vault and you can see more information at www.nfcvault.io