Cryptocurrency is a type of digital currency that isdesigned to be secure, and is powered by Blockchain technology.
Cryptocurrency works through peer to peertransfers without the involvement or use of banks or financialinstitutions. The term ‘cryptocurrency’came about because the Blockchain technology that supports it is mainly basedon the principles of cryptography. Although a hundreds of cryptocurrencies nowexist in the market since it was first introduced in 2009, Bitcoin, the firstone, still remains the most popular, followed by Ethereum.Cryptocurrency is usually stored in digital wallets that areexistent on the blockchain, and the following are the different types of it.1. Online –although this type of wallet is the most accessible, at any type of computingdevice, from any location, it is also open to hackers at any inopportunetime. This is because your private keysare stored online, and are managed by a third party.
2. Desktop – you can download your wallet to yourlaptop or personal computer. This is one of the safest ways to keep yourwallet, since you can only access your wallet directly from said laptop orpc.
Two ways you can lose your funds isif your device is hacked or infected by a virus.3. Mobile – a convenient way to use your wallet isthrough apps installed on your mobile phone. You can use it are stores that accept cryptocurrencies.4. Hardware – your private keys is stored in ahardware device like a usb.
This is alsoa handy way to use your wallet, and because your private keys are storedoffline even though you use it online, security is at a highest level. 5. Paper – The advantage of paper wallet is that itis a hacker proof cold storage method of your cryptocurrencies. Your private keys are used physicallythrough a printout of QR codes.
To do atransaction, the QR codes are scanned or you can manually entering your privatekeys.