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Commercial cryptocurrencies are a great way to make a However, once obtained, you need a safe place to store them: this is the so-called cryptographic portfolio , which is a software that allows you to store funds, make transactions and keep an eye on your balance
As a software, cryptographic portfolios are not like the portfolios used for legal currencies, and many of them do not need of a physical form, some do it, but we'll talk later. , are nothing more than the records that exist on the blockchain.Because, the different portfolios can easily interact with one another in the form of transactions.
They have their public addresses that are randomly generated and are represented by strings of numbers and letters. This way, if you want to send some encryption, like Ether, you can use this public key, or address, to send the coins to someone else. If the wallet is empty of coins, it contains only the private key that belongs to its owner. This is a tool used for signing up every single transaction, as well as for unlocking those coins that are shared with the owner. This is something that the owner must keep secret, otherwise he will be robbed of his cryptography.
In most cases, the private key is matched to the private key, and the two must be matched so that a transaction is successfully executed. Now that we know what the portfolios are and how they work, let's get to the specifics. We will now explore different types of Ethereum portfolios and see what their strengths and weaknesses are.
Understanding the types of Ethereum portfolios
1) Hot and cold wallets
Portfolios can mainly be classified into two categories: hot and cold. The hot wallets are the online (Web) portfolios, which can be accessed from any device, from anywhere and at any time. All you need is an internet connection and you will have access to it. The cold portfolios, on the other hand, are offline portfolios (hardware). They can connect to the Internet when they need to make a transaction, but other than that, they do not have a constant connection to the Internet. The thing about these portfolios is that hot wallets are very practical, but also much easier to hack, while cold wallets are less practical, but much, much safer.
2) Full Node Wallet
The complete node allows users to directly access the ETH blockchain. If you do not have a complete node, you need to connect to another to verify the transactions. This type of wallet requires the download of the complete blockchain, which will turn your computer into a node. This can only be done with the help of a desktop wallet, since the blockchain is constantly growing and will require a lot of room for expansion.
3) Third-party wallet or personal portfolio
Use of third-party portfolios is one of the easiest ways to get into the game of wallet. This includes the portfolios provided by one of the cryptographic exchanges or independent portfolios of other developers. In this way, access to funds is quite simple and effective and can lead to even faster exchanges than other methods. However, this option will require a huge amount of trust in the part that the portfolio provides, since they are the ones that manage your private key.
In addition, the Ethereum platform also allows you to create a portfolio yourself, and then use it as you see fit. In this way, you will have full control of all the keys. Creating one is easier than it may seem, thanks to the Ethereum portfolio service "MyEtherWallet".
Once you get to the website, you will see numerous security reminders that you should read carefully to understand the process and what to do to make the wallet as safe as possible for you. After that, there will be an option to create a password and continue with the configuration of your personal wallet. Next, you will need to download a keystore file.
At this point, it is important to remember that keeping the private key safe is the highest priority. You will need it to unlock your wallet when you want to access it, but you must keep it secret from everyone else. Copy and paste into the keystore file, then upload it to unlock the wallet. This is practically all you need to do and if everything is done correctly, your wallet should now be set up and fully functional.
4) Paper wallets
A paper wallet is a term for a wallet whose private key is in your possession but written on a regular piece of paper. This basically means that it does not exist in a digital form and, as such, it can not be violated. This is one of the safest ways to protect your wallet, and if you take extra precautions to hide the sheet with your private key, you will not have to live in fear of stealing your funds.
5) Mobile wallets [19659008] Finally, there are mobile wallets, which are usually referred to as "clear customers". It is not necessary to download the blockchain to use them, but instead get information on the status of the blockchain network from the miners. They can allow you to access coins as long as you have a cell phone connection, but they are also easy to hack and steal.
A good example of such a portfolio is Jaxx, which is similar to desktops and smartphones. The good thing about these portfolios is that your private key never leaves your phone. The bad thing is that if your phone is hacked, lost or stolen, you can lose everything you own.
Know Your Types of Portfolios Ethereum Conclusion
I hope this has clarified things about the different types of portfolios that can be used for storing Ethereum. Obviously, the safest portfolios are the cold ones, because they are on a different hardware component that requires physical access to get the money stored on it. However, this portfolio is not constantly connected to the Internet, which makes it a little less practical.
Hot wallets are easier to access, but they pose a risk because anyone can reach them if they get their hands on your private key. Paper wallets protect the private key well enough, so it may be a decent way to use a hot wallet. Now that you know all this, the choice of which one to use depends entirely on you.
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