Cryptocurrency All-in-One For Dummies. Peter Kent

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СКАЧАТЬ and public keys. These keys are something like the PIN code you use to access your bank account.

      

No two wallet addresses are ever the same. They’re something like fingerprints. This distinction means that there is a very low chance that somebody else can get your funds by mistake. Also, you have no limit to the number of wallet addresses you can create.

      To give you an example of what a cryptocurrency address looks like, here is the wallet address believed to belong to the creator of Bitcoin, Satoshi Nakamoto!

       1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

      As you can see, it uses a combination of numbers and letters, both uppercase and lowercase. Don’t worry; as long as you have a safe and secure wallet, you don’t have to memorize your crypto wallet address. You can also consider printing your keys and storing them somewhere safe that you won’t forget about.

      A private key is a unique individual password to your individual crypto wallet address. A public key then adds an extra layer of security and ensures that your wallet can’t be hacked. Here is a quick example of what the keys look like:

       Private key: 03bf350d2821375158a608b51e3e898e507fe47f2d2e8c774de4a9a7edecf74eda

       Public key: 99b1ebcfc11a13df5161aba8160460fe1601d541

      These addresses look completely different to the eye, but the software technology knows that the two keys are specifically linked to each other. That proves that you’re the owner of the coins and allows you to transfer funds whenever you want.

Addresses in Ethereum (see Book 4 for more about Ethereum) take up the last (rightmost) 20 bytes of the hash of the owner’s public key. To calculate an address, just calculate the Keccak-256 hash of a public key, and then copy the rightmost 20 bytes. The resulting value is the address for that account’s public key. The code to calculate an address from a public key looks like this:

       addr = right(keccak256(pubkey),20)

      

When someone sends you any type of cryptocurrency, they are essentially signing off ownership of those cryptos to your wallet’s address. For you to be able to spend those cryptos and unlock the funds, the private key stored in your wallet must match the public address the currency is assigned to. If the public and private keys match, the balance in your wallet increases, and the sender’s balance decreases accordingly. No exchange of real coins actually occurs. The transaction is signified merely by a transaction record on the blockchain and a change in balance in your cryptocurrency wallet. Cryptocurrencies rely on blockchain technology, which you can learn about in Book 2.

Looking at Different Types of Wallets

      First, you need to understand the difference between a traditional digital wallet and a cryptocurrency wallet. You may already be using digital wallets, also known as e-wallets, through your mobile phone. Cryptocurrency wallets are a whole different animal and come in several different types of wallet client software that each caters to different needs. The following sections cover the five most popular types of cryptocurrency wallet client software, in order of their security level (from least to most secure).

In Figure 3-1, you can see a summary of the most common crypto wallets and their examples that Kiana shared with Invest Diva students in 2018. Note: According to Bitcoin Wiki, a “seed phrase, seed recovery phrase, or backup seed phrase is a list of words which store all the information needed to recover a Bitcoin wallet. Wallet software will typically generate a seed phrase and instruct the user to write it down on paper. If the user’s computer breaks or their hard drive becomes corrupted, they can download the same wallet software again and use the paper backup to get their bitcoins back.” A PoS stands for proof of stake, a mining concept explained in Book 6, Chapter 2.

      

Specific wallet brands mentioned here aren’t the only options available, and you shouldn’t take their inclusion as a recommendation. You must do your own research to find the best options available in your area as well as for your needs and chosen cryptocurrencies and activities.

      © John Wiley & Sons, Inc.

      FIGURE 3-1: Popular cryptocurrency wallet types.

      Online wallet

      Online wallets may be less secure, but they do have a bunch of advantages for small amounts of cryptocurrencies. An online (or web) wallet allows you access to your cryptos via the Internet. Therefore, as long as you’re connected to the Internet (the cloud), you can reach and store your coins and make crypto payments. The online wallet provider stores your wallet’s private key on its server. The provider may send you the crypto code but store your keys and give you the ability to access your keys. Different services offer various features, with some of them linking to multiple devices such as your mobile phone, tablet, and computer.

      Advantages of online wallets include the following:

       They enable fast transactions.

       They may be able to manage multiple cryptocurrencies.

       They’re convenient for use on the go and for active trading.

      Disadvantages include the following:

       They risk your online security because of potential vulnerability to hacks and scams.

       They risk your personal security because of potential exposure to computer viruses.

       You aren’t storing your cryptos; a third party is.

Table 3-1 shows some popular online wallets.

TABLE 3-1 Popular Web Wallets

Name	Description	Pros	Cons
MyEtherWallet, www.myetherwallet.com	Open-source, decentralized cold wallet. You locally control your keys.	Most popular Ethereum web wallet. Works well with hardware wallets.	Has been hacked and may be vulnerable to phishing attacks. СКАЧАТЬ В начало < 19 20 21 22 23 24 25 26 27 28 > В конец