You should be aware that sharing the address on the previous page with someone will allow them to view your entire transaction history and current balance. For example, here is mine for the previous address. If for some reason you aren’t comfortable with this then your wallet can generate a near limitless number of other addresses to use to obscure your true balance. More on this later.
The public key/wallet address should not be confused with the private key (which to the human eye looks similar). That should not be shared with anyone, but if you’re using a hardware wallet I’m not even sure it’s possible to view it. Either way, if you did manage to expose the private key, significant effort would be necessary and it would be a very intentional act. The same is not true for software wallets.
Using a Wallet
Wallets are functionally all the same. They sign transactions and store the private key. That’s it. It is a common misconception to think the your coins and tokens are “stored” on it. It isn’t a storage device of any type beyond storing the private key. You coins and tokens are “stored” in the Blockchain itself and the private key gives you access to the ones that are “yours”.
If you learned how to send a transaction from Page 3 then you have the basics of their use well in hand. In the coming pages, I’ll be going more in detail with it though to show you exactly how for both Software and Hardware wallets.
There are almost limitless brands of digital wallet for storing your funds. Even ‘paper wallets’, which are actual paper. Really. I’m not going to go and make an in depth description of every possible brand, type and kind, but what I will do is give you some positives and negatives of the various types
Pictured above is my personal cold/hardware wallet that is in day to day use. This wallet is what I sent the funds to on Page 3. I cannot rate these highly enough. Safe and only two extra steps to send funds over a software wallet and they are
- Plug in
- Enter PIN code
The two most popular wallets are:
- Ledger Nano S
Both will serve you well and coming in mid-2018 both companies are releasing revised and updated versions of their hardware.
Software wallets are available on all popular platforms including iOS, Android, Mac and Windows.
Popular variants include:
MetaMask is my current Hot wallet of choice which is a Google Chrome Extension for interacting with websites that accept crypto payments in Ethereum directly. To follow along with the rest of the guide, you too will need it. No cost.
The primary difference between hardware and software is, again, the private key. MetaMask’s (and all other software wallets) key is stored locally (on the host device) so if your device was to become compromised by a key logger or someone with remote control over your system could, in theory, create and sign a transaction to any address they wish. Once again – *Poof*. Gone.
For this reason any wallet that stores it’s private key in an accessible place you should treat like the wallet you carry cash in. Fine for small amounts, but not for life savings.
Should the Worst Happen
Hardware wallets in the event of theft, loss or damage can be restored easily using what is known as the “recovery seed”. During the setup process you are asked to carefully write down 12 or 24 words and keep them in a safe place. Never take a photo of them or upload them to an internet service of any type. Keep them secret, as entering them into another device compatible with recovery seeds will instantly make a duplicate of your private keys and then have access to your funds.
This is perfect for you in the case of a loss or damage as everything is recoverable, without having to spend hours on the phone to support, but it’s also perfect for a thief for the same reasons. Keep them secret and safe.
Most software wallets also come with a recovery seed that you should take a paper copy of, but in my opinion these aren’t as crucial due to the fact that you’ll only ever have small amounts in them. Also, most software wallets have the option to export the private key directly for importing elsewhere.
I cannot stress enough the relative insecurity of software wallets. Even mobile device wallet apps are only as safe as an overlooked pin-code or a sleepy fingerprint. Say it with me: Small Amounts.