Once you have collected a sufficient amount of cryptocurrency to start worrying about its safety you need to make a few wallets.
Since there are disadvantages to any system, it is better to be safe and keep your digital money in different places (including investing in innovative cryptocurrencies that show stable growth, such as OctoinCoin).
In order to choose wallets you need to understand the differences among them. So, first of all the storage of cryptocurrency in wallets is divided into cold and hot wallets.
Hot storage is when all online purses that are always connected to the network. The main feature of such wallets is that you can spend your money at any time. Hot wallets could be:
the wallets of trade exchanges (for example, Poloniex and Bittrex) where users buy and sell cryptocurrency;
mobile wallets that have gained popularity due to their convenience (since all operations occur in one click. Besides, the phone is always with you);
software applications (for example, Dash QT). You can use a hot wallet when using our OctoinCoin cryptocurrency.
When you are using hot wallets it is better to connect additional protection. For example, confirming the login by sms to the phone or by a code-question.
But it is better not to store large amounts in this way because like any other source with Internet access, such wallets are vulnerable to attack by hackers, all sorts of viruses and server hacking.
Cold storage mean all sorts of offline-wallets in which you save a private key away from the Internet. In cases of cold storage a private key is used to withdraw funds and a public address is used to receive the funds.
There are several methods of cold storage and we will consider their advantages and disadvantages.
A paper wallet.
In simple words it is a sheet of paper with a written private key. In order to create such a wallet you can use the service to create paper wallets. For example, the service bitaddress.org. You will receive a QR code and wallet number so you can print it. The main thing is to make sure that the information does not remain in the printer or in the cloud. Of course, this seems safe because if you hide such a wallet in a safe or in a book on the shelf, your bitcoins will be safe. Especially, since there is no access to the network. But there are obvious disadvantages of such storage:
Paper can be torn, wet, lost (such cases have happened).
If you make a mistake during the recording or writing the key, you will not be able to see your money ever again.Also, this piece of paper can be photographed or scanned by a QR code.
Finally, such wallet can simply be stolen and all the information is right there.
The hardware purse visually resembles a USB flash drive, but it was designed specifically to store cryptocurrency. If you want to conduct a transaction, you need to connect it through the USB port to the computer. Advantages - stores the private key offline and is not vulnerable to viruses. If necessary, allows you to quickly conduct transactions, provides a high level of protection. Disadvantage: again, be careful and do not lose your wallets. Although, in the case of hardware storage, some manufacturers provide recovery..Popular wallets - Ledger, Trezor, KeepKey.
All you need is a quality USB drive. In order to make such a wallet, you need to download the software wallet and generate it on this medium and write a private key / phrase on it for recovery. For convenience, this information can be saved in a PDF file.
A big advantage of such a wallet is in its compact size. The minus is that it can be damaged, lost or when connected to the network it becomes susceptible to virus attack.
Storing information about the wallet on the computer.
The convenience of this action is that it gives you quick access to your wallet. Disadvantages are the viruses or if the operating system gets damaged then the data can not be restored.
A broken computer is a lost wallet.
The method is rather symbolic. There are manufacturers of such coins that introduce a plastic carrier with a written private key inside.
It would seem that here is the alive money, absolutely real Bitcoin.
However, the most questionable is the trust to the manufacturer. What if he copies himself a private key too?
After acquaintance with wallets it is important to learn, that if you trust yourself then the storage on paper and on a hardware wallet will keep your money safe.
When choosing cold and hot storage, you need to weigh the pros and cons and then choose the best option that is right for you. We also remind you that on our platform you can download a wallet for using OctoinCoin. It is an innovative and reliable cryptocurrency that is just beginning to enter the global market.