At the tip of the shrine shown in the image are the most difficult but safest to use folders, while the easiest to use in the background, but also the minimum safe. The shrine image also represents the adoption in use of each type of folder: those of the widely used fund , while those of the cap which are not used widely; an opposing condition of the community of cryptoactive folders, given the fact that it is money with what we are dealing with. Safety is a ruling factor in a good folder of cryptoactives.
Starting at the bottom of the shrine image, there are some exchange houses , which plays role as a bank of cryptocurrencies.So in an assigned address Users enter their crypto-assets and then bank is responsible to control and run them. That is, they move the the users money to one or more central folders and from there they get the instructions of payment, purchase or sale of their clients indicated by them. They are useful for the exchange between depository currencies and cryptoactives. These services are open to scam, hacking, service drops and other risks, so that users' money may be unaccessible or simply disappear; In addition, they usually change the conditions of use at their causing account closures, discretion, and other inconveniences to users.
The exchange houses represent a business that allows the meeting between the real world and the cryptocurrencies although there are also between cryptoactive. Users take the risk of losing their money who store their savings in these services . Atomic Swaps will make its use unnecessary in the future with the development of Bitcoin technolog advances.
One step up the pyramid are the online folders websites that allow users to mobilize their money independently, without having to install any software and having exclusive control of their private keys. In this type of wallets a private key abstraction is generated in the form of 12 or more words called seed or backing that must be written down in paper or other resistant medium and outside of line, by the user in order to safe your money.
the probability of hacking users' funds minimizes drastically, in the online portfolios. in these purses the unavailability of funds remains an issue as they may suffer temporary falls for different reasons.
MyEtherWallet and Blockchain.info are two online portfolios that are mostly used
softwares that can be installed on mobile devices or computers in the penultimate step of portfolio applications and serve to view balances in the addresses that the user has and organize the money in them. They canuse a previously created backup or create a new seed as well as allow the activation of extra key or code.
These applications transfer responsibility for security to the user by eliminating the issue of unavailability of money , who must refraining from entering insecure pages and keep his device free of viruses and insert any unknown peripheral into the system such as external hard drives or pendrives.
The wallets at the top of the pyramid are called cold wallets: physical devices allowing you to sign transactions without exposing the seed that hold the private key of associated accounts offline. These portfolios/folders represent the safest way to protect cryptoactive and are connected by USB to the computer. The portfolios in hardware generate a direct cost for the user. Their prices differ but they can be obtained from $ 50 and also up. Some recognized brands are Ledger, Trezor, Digital Bitbox and KeepKey.
Note: Cryptocurrency wallet characteristics would be explained in the coming post.
