The last decade has completely changed the way we approach how we store our funds, or “self-banking.” This is because until now we’ve primarily handled the safekeeping of our funds in one of a handful of financial vehicles, like cash deposits in the bank, assets, or as cash in our own possession (hopefully not under the mattress or behind the toilet tank).
Though the entire world was accustomed to this method, it was inefficient to carry cash everywhere. This inefficiency gave way to the creation and mass adoption of credit cards. However, their high fees made their significantly quick method of payment less desirable.
Then, with the inception of cryptocurrencies like Bitcoin, the world shifted in mentality. Now, funds can be held as alternative digital assets (ie: cryptocurrencies, etc.) and individuals worldwide now have a firmer control over their funds. In essence, people can now free themselves from depending on third-parties (like banks) to store and manage their money.
A crypto wallet is a digital wallet used for the safekeeping of digital assets. Since blockchain tokens became readily available to the world (ie: Bitcoin, Ethereum, etc.), people worldwide can now purchase their own digital coins and deposit them into a secure wallet.
Ergo, if a person jumps on a cryptocurrency exchange platform like Coinbase or Binance, or an over-the-counter trading desk, they can purchase whichever token they choose and store it on that token’s native wallet, or alternatively, they can store it on a wallet that supports multiple currencies.
Though most projects with their own cryptocurrency also have a native wallet, some users prefer to keep multiple currencies in a single wallet, rather than having to keep track of multiple public and private keys. In order to ensure the highest degree of security, users are provided with a wallet address, which serves the same purpose as a bank account number, and a private key, which serves the purpose of a password.
The way the private key is designed makes it nearly impossible with current technology to hack. However, if lost, it becomes impossible to recover, therefore losing access to your assets forever. Unfortunately, this has happened numerous times, causing many early investors in Bitcoin to lose access to millions or billions worth in USD.
On a lighter note, many wallets have recovery systems in place to provide a safety net in case a key is forgotten or lost. It is worth noting, however, that how these recovery systems work will vary depending on the wallet and it is strongly advised to thoroughly read through its instructions.
“With great power, comes great responsibility.”
An additional way to help avoid this ‘misplacement mishap,’ developers created multi-currency crypto wallets that support multiple cryptocurrencies. Thus it allows users to keep track of their assets and keys more efficiently.
Aside from the obvious misplacement of a private key, any new technology comes with a number of opportunists looking to scam, trick, or otherwise steal funds from unwitting users.
These can come in any number of forms. A phishing site could ask you to provide your wallet details by making you believe it’s a necessary step to receive tokens or use their service. Hackers could also gain access to your computer and record your keyboard strokes or your screen to record your ke. Therefore it is suggested to use software to cover your tracks.
Scammers are a guarantee in the world and, as such, we highly recommend you take close care of your funds. In the same way you’d never give away your personal bank information over the phone or to an untrusted website, so too should you always be wary of disclosing your private wallet details. To put it simply, you should never disclose your private key.
Every wallet is different, and there are different types (i.e. Hot, Cold Storage, Hardware). Among those three types, the companies that provide those wallets vary in how they operate. Some will give you full access to your private key, and some keep that information hidden.
Sidekick, for example, has cleverly linked user accounts to their wallet addresses. This means as long as you have access to your Sidekick account, you will always be able to access and manage your cryptocurrency portfolio, all without having to worry about your private key. Unlike many wallets, Sidekick will also let you have full control over your private key by exporting it.
As we continue to develop new technologies, the only guarantee for the future is change. Just like the internet was a “fad” and airplanes were a complete impossibility, the world will change and it’s good to get a head start.
For this reason, even if you’re not particularly interested in the world of cryptocurrencies and blockchain technology, keep in mind that the future looks to be more and more self-governing. That is, individuals will hold more control over their own things and won’t have to rely as heavily on third-parties.
For this reason we recommend you dip your toes in the crypto waters and try opening your own crypto wallet to get familiar with the process. Prepare well and educate yourself on these new technologies so you are ready when these changes occur. At least you can feel reassured that you’re now more familiar with multi-currency crypto wallets.