Understanding CryptoGraphy - Part 4
Hello everyone, hope you all are doing good? I'm back with the Part 4 of this amazing series, Understanding CryptoGraphy. If you haven't read the Part 1, Part 2 and Part 3, I strongly suggest you that by clicking here for Part 1, here for Part 2 and here for Part 3. In today's article we would be looking at how Blockchain Wallets CryptoGraphy works and will be explaining the available types of Crypto Wallets.
The way and manner to how blockchain wallets cryptography works, is quite simple. Blockchain wallets are used by users to store their digital assets, just like how our conventional banks is used to store our funds.
The blockchain wallet makes use of two keys to perform it's operations. These keys are Private Keys and Public Keys. The private key is the key that grants it's owner access to the funds in the wallet and that enable the owner of the wallet the ability to sign transaction, for it to be able to broadcasted to the network. The private key is what gives the owner of the wallet ownership and control of the wallet. If lost or stolen or forgotten, the wallet can't be accessed, funds can't be sent out and transactions can't be signed, i.e in other words, the ownership of the wallet is lost.
On the other hand, public key is used to receive funds in the wallet. Public key is like our bank account number. Can you send funds to someone's bank account without the bank account number? Obviously No! Same thing applies with public key of wallet, it is what we send in order to receive funds to our wallet. Every wallet user have their unique Public key i.e there can't be two similar public key as they can't be two similar bank account number.
So, blockchain wallet cryptography works with the use of the public key to receive funds and the use of the private key to send funds, sign transactions and control & own the wallet.
Types Of Crypto Wallets
There are 3 main types of crypto wallets which are;
- Software Wallets
- Hardware Wallets
- Paper Wallets
- Software Wallets: This is the type of wallets where your assets are stored online. There are 3 types of software wallets which are; Web wallets, Desktop wallets and Mobile wallets. Web wallet is a type of wallet where you access your wallets through a web browser. Although, you don't have absolute control when using web wallets, as the website also holds the key to your wallet. Desktop wallet requires you to download the wallet application on desktop. You have absolute control of your wallet. Example of Desktop wallet is Electrum wallet. Mobile wallet requires you to download the wallet application on your smartphone. Example of Mobile wallet is Trust Wallet.
- Hardware Wallets: This is the type of wallets where your assets are stored offline. The major advantage of this type of wallet, is that, your funds are highly secured, as you don't ever have to worry yourself of malicious hackers. This kind of wallets are for people who have a large sum of crypto assets.
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Paper Wallets: This is the type of wallets where assets are stored in a piece of paper, in form of a document that contains details of your wallet. This type of wallet is quite risky to have, because if that piece of paper/document that contains all the details of your wallet, gets missing or is stolen, you can not have access to your wallet.
I hope you all found the article interesting and exciting. Do well to share your thoughts about the article in the comment section below. Thanks.
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