What Is a Cryptocurrency Wallet?
Crypto coins are a form of digital currency. As such, they cannot be stored in what you would consider a traditional wallet. Additionally, what may come as a shock to you, is that whatever digital currency you may own, it isn’t kept in your wallet but rather on the blockchain itself.
Blockchain is a form of digital ledger. Transactions are recorded and stored in blocks. Once a block is filled with transactions, they are verified by multiple users, thus ensuring their validity and lack of any fraudulent activity. Afterwards, thy are recorded permanently on the network. The process repeats itself and thus a chain of blocks is formed. Once a block is confirmed, it cannot be altered in any way, guaranteeing that transactions cannot be rolled back. In addition, the information of everyone’s balance in the network, how much currency they own is also stored on the blockchain, as to ensure that if you initiate a transfer, you own enough currency to do so. All of this data is recorded and stored in such a way, that you can’t physically identify who the person on the other end is, while also maintaining security and trust in the system.
Cryptocurrency wallets are generally a piece of software that serves as an access point, allowing you to use your funds, initiate transactions and more. A basic principle of operation of a crypto wallet is the creation of public and private key pairs. Public keys are a sort of mailing address, created so you can send and receive funds, visible by everyone. Ensuring that only you can access your funds is the job of the private key. One private key can be linked to multiple public keys or for increased security, every time you create a new wallet address (public key), you can also generate a new private key.
Types of Cryptocurrency Wallets
Overall, there are three main variants of crypto wallets, namely software, hardware and paper wallets. Depending on the use case, the desired functionality and security level, your choice will vary. To make it easier for you to pick the best cryptocurrency wallet, let’s explore the key characteristics of each.
Software cryptocurrency wallets are divided into three sub-categories – web, desktop and mobile. The commonality between them is that they’re always connected to the blockchain via an internet connection. While this does provide the user with convenience, it also increases the likelihood of being the victim of either a vulnerability in the code of the software or a targeted attack. Below, you’ll find the key pros and cons of each subtype of software wallet.
- Web wallets: usable via your browser, without any additional downloads or installation, you’re able to access your funds from anywhere in the world. The drawback here is that private keys are most commonly managed by third parties.
- Desktop wallets: downloadable programs that are installed on your PC or laptop. While a bit more cumbersome than web wallets, the responsibility of managing and protecting private keys is left to the user, which in general, is the preferred and safer way
- Mobile wallets: like desktop wallets but for smartphones. Added convenience with QR code generation, for easier sending and receiving of cryptocurrency. Less secure than desktop as your smartphone is much more likely to be lost/stolen
Hardware wallets are physical devices, commonly the size of USB thumb drives, that generate and store your public and private key combinations, without the need for an Internet connection. This characteristic allows them to be the most secure alternative for storing cryptocurrencies, especially for longer periods of time. They’re considered the ideal ‘cold storage’ method for larger amounts of crypto. Additionally, provided you need to complete a transfer to or from your hardware wallet, you can do so securely. This type of wallet has no operating system and so they’re virtually unhackable.
Paper wallets, as the name suggests, are sheets of paper with printed out pairs of blockchain addresses and their corresponding private key. Usually, the sheets consist of a long string of numbers and letters, accompanied by a QR code to easily scan it with your phone. While paper wallets are secure, they are cumbersome to work with. You can quickly get overwhelmed if you generate new addresses frequently. Also, making multiple copies and storing them in different locations is a big hassle. If you lose your sheets of paper, then you lose all your money.
Cryptocurrency Wallets and Gambling
For many players out there, online casinos are the main way they can enjoy the thrill of gambling. While most dream of visiting the gaming capital of the world – Las Vegas, it does fall out of reach for some, due to various reasons. That doesn’t mean however, that you can’t have a good time. You can even play with real dealers at an online live casino. Simply deposit the desired sum into your account and get started. Unfortunately, that isn’t always the case, as depending on the casino, local laws and your geolocation, the methods of funding your account could prove limited or slow. If you are still confused about how cryptocurrency works and how it intertwines with gambling, then refer to our cryptocurrency and online gambling article for more information.
That is where Bitcoin comes in. Most major casinos out there like NetBet have readily accepted Bitcoin as a method of topping up your players’ accounts. If you own crypto coins, we suggest you use them. While transaction confirmation is 10 minutes on average in BTC’s blockchain, you do have the added security of creating a new address and transferring your desired sum from it. You won’t have to worry about your debit card being stolen or wait 2-3 business days for a bank transfer.
Crypto Wallets – Quirks and Features
Before you get started with crypto and casinos, there are a few steps you’ll need to cover. Firstly, you’ll need to choose whether you want to own Bitcoin (recommended) or another cryptocurrency. Second, you’ll need a wallet that would best fit your needs. Our recommendation for the best cryptocurrency wallet is Jaxx Liberty as it’s an all-in-one solution that works both on desktop, mobile, has high levels of security, and integrated crypto exchange, and more. Additionally, you can use it with a multitude of different currencies, including Bitcoin, Ethereum, Ripple, and many others. Third, you’ll need to read the Terms and Conditions of the casino of your choosing very carefully. Some platforms allow you to place bets in Satoshis (one hundred millionth of a Bitcoin) and as such, your winnings are also in Satoshis. Others, upon depositing your BTC, convert that money into fiat currency like USD/GBP/EUR depending on the current market situation.
We hope that our article has provided you with enough insight into the general workings of cryptocurrency wallets. We’d like to remind you that depositing cryptocurrency into your online casino account is commonly accepted as the safest way to transfer money on the Internet. While relatively convenient, it does come with a few quirks of its own. As always, make sure you read the T&C’s of your favourite casino and gamble for fun, not to make a profit.
If you are ready to start your gambling journey with cryptocurrencies, we would like to once more draw your attention to our best Bitcoin casino sites in the UK list. There, you can find the absolute top operators on the market that support cryptocurrencies. Unfortunately, cryptocurrency can be used to play bingo online at a very limited number of operators, but we are sure that this will soon change.
In this section, we would like to showcase to you the most popular queries that players have towards using a cryptocurrency wallet. We hope that with the entries we have listed below, you will solidify your knowledge even further and also help you find information easier.