Cryptocurrency

At the heart of the cryptocurrency is the idea of independence – the user becomes his own bank. If you properly secure your funds, they will be better protected than the most secure bank vaults. Otherwise, all funds can be remotely withdrawn from your digital wallet.
The ability to properly protect digital coins is an important skill when using cryptocurrency.
Private keys, like regular keys, open access to cryptocurrency that can be spent. They consist of a very long number - so long that it is impossible to guess it.
If you have received funds before, you have encountered public addresses that also consist of a chain of random numbers. To obtain a public address from your private key, a public key is created using cryptography, which is then hashed. The only thing to remember is that it is quite easy to generate a public address using a private key, but it is almost impossible to do the opposite now. Thanks to this, you can safely indicate your public address in blogs, social networks, etc. And no one will be able to spend the funds sent to it without the corresponding private key.
If you lose your private key, you will lose access to your funds. If someone else finds out your key, they will be able to spend your cryptocurrency. Thus, the security of your private key is of paramount importance.
At the same time, wallets now rarely have only one private key. These are usually hierarchical deterministic wallets, meaning they can contain billions of different keys. All you need to remember is a seed phrase, a set of handy words that can be used to generate these keys.
Unless you intentionally decide to use just one private key, most likely, when creating a new wallet, you will be asked to create a backup copy of the seed phrase. Further, when describing the keystore, the term keys will denote both private keys and LED phrases.
Couple private/a public key is a public key cryptography. It allows you to use digital signatures that confirm that the messages came from certain persons. A digital signature is created when making transactions with cryptocurrency as a result of combining a private key with a message. Like a public address, the signature does not disclose information about the private key, so it is safe to use it. The peculiarity of digital signatures is that anyone can compare the public key with the signature and determine whether the owner of the key signed the message. Your message (transaction) is added to the blockchain, and any user can verify its authenticity. And all this without revealing your private key.
Wallets are divided into two categories: hot and cold. A hot wallet is any cryptocurrency wallet with an Internet connection (such, for example, include wallets on smartphones and PCs). Hot wallets are the most understandable and convenient for users. With their help, you can easily send, receive and trade cryptocurrencies and tokens. Unfortunately, for the sake of such convenience, security often has to be sacrificed.
Internet connection makes hot wallets vulnerable. Although private keys are not broadcast anywhere, your online device can be infected with malware and hacked by intruders remotely. This does not mean that hot wallets are completely unsafe. They're just less reliable than cold ones. However, hot wallets are more convenient, so they are usually chosen to manage small amounts.
To protect themselves from online attacks, many people prefer to store their keys offline. That's what cold wallets are for. Unlike hot wallets, cold wallets are not connected to the Internet. Let's look at the steps of creating and executing a transaction to figure out how this is possible.
Hardware wallets are a more convenient alternative and keep the private key offline. They are more portable, cheaper than a full-fledged PC and are designed to store cryptocurrency.
Online wallets are great for small amounts that you plan to spend on the purchase of goods and services. If cold storage is like a savings account, then a mobile wallet is like a physical wallet that you carry with you. Ideally, there should be an amount on it, the loss of which will not lead to serious financial problems.
Custodial wallets are best suited for loans, staking and trading. However, before using your funds, it is important to plan how you will distribute them (for example, with a position sizing strategy). Remember that digital currency is very volatile, so you should invest only the amount that you can afford to lose.
Today, blockchains offer many solutions for storing cryptocurrencies.
Each of them has its advantages and disadvantages, so to choose the right option, it is important to familiarize yourself with the advanced crypto academy . This way you can combine hot and cold wallets according to your needs.