What is a Crypto Wallet
To enter into the world of crypto and web3, you need a "crypto wallet.” So, what is a crypto wallet, and how can it help you explore the world of decentralized finance?
A crypto wallet (a.k.a. "DeFi wallet”) is essentially a software application that can be installed on your browser, or mobile or can even exist as a physical device. Keep in mind that this wallet for crypto does not hold your cryptocurrencies. Rather, it is a gateway for you to access your cryptocurrencies that are actually stored on the blockchain.
The way it works is that it has a public key and a private key. A public key is like a bank account number, which you can share with anyone to receive crypto. A private key is like your ATM PIN or bank account password, which you need to keep safe and use to access your crypto.
A crypto wallet stores and helps you manage your private key securely. It also provides you with an intuitive interface to send, receive and manage your digital assets.
Not all crypto wallets are created equal. Some are more secure than others, while some are easier to use than others. So, how to pick the best crypto wallet for you?
Choosing the Best Crypto Wallet
When you're starting out with cryptocurrencies, one of the most important decisions you'll make is choosing the right crypto wallet. It's a significant first step that can impact the security and accessibility of your digital assets.
As you delve into this decision, you'll come across two main options: Custodial crypto wallets and non-custodial crypto wallets. Let's explore these choices further.
Custodial Wallets
A custodial crypto wallet is one where the service or provider stores your private key on their servers. This means that you are trusting them to keep your digital assets safe, and they will have access to your funds.
Of course, there may be laws and regulations in place that prevent them for misuing your funds, but they still can access your assets if they choose to. Hence, when choosing a custodial wallet service provider, you must always opt for a trusted and reputed provider like Paybis. We have created a comprehensive article describing the risks associated with custodial wallets. We also explain how we address those risks in a different article.
The upside of this custodial wallets is convenience – you don’t need to worry about storing your private keys yourself, so it’s easier to get started.
This is also a wonderful option for beginners who have jsut begun exploring decentralized finance. They can entrust their crypto funds to a trusted custodian until they get acustomed to wallet security best practices and other nuances of keeping their assets safe in DeFi. All centralized cryptocurrency exchanges offer a custodial service.
Non-Custodial Wallets
With non-custodial wallets, you hold your private keys and have unlimted control over your funds. This means that no one can access or move your crypto assets without first getting your permission (unless your private key has been compromised).
Most non-custodial wallets provide you with 12 or 24 words which become your "seed phrase." These words, when entered in the same order as they are generated, will reveal your private key or allow your wallet to access the assets on the blockchain.
The mathematics and cryptography behind this concept make non-custodial wallet the safest crypto wallet out there.
Non-custodial wallets come in two forms – hardware wallets (a.k.a. cold wallets) and software wallets (a.k.a. hot wallets). With a hardware wallet, your private key is stored on a physical device that can be disconnected from the internet. Software wallets, on the other hand, are installed on your computer or mobile device and ususally remain connected to the internet.
Hence, among the two, cold wallets are the more secure option.
Best Online Crypto Wallet
The best online crypto wallet is the one that meets your requirements and suits your needs. You should consider various factors such as security, convenience, user-friendliness, fees, customer support before choosing the right wallet for you.
In case of non-custodial wallets, you are unlikely to get any customer support and it is entreily your responsibiltiy to keep your private keys safe. It is also not very convenient as you might have to carry a physical device with you to access funds or repeatedly enter your seed phrase if logging in from a different device.
Advantages of the Paybis Wallet
In this section we would like to describe the advantages and features of the Paybis Wallet.
We would like to note, however, that by entrusting your crypto to a custodian, like Paybis, you also accept a certain level of risk. Please read our article describing the risks associated with storing your crypto in a custodial wallet.
Paybis Wallet is a crypto wallet that has been developed from the ground up to provide a safe and intuitive experience. In addition to its user-friendly interface, it also comes with many features that make managing your crypto assets easier.
Easy Access
The Paybis Wallet offers convenient access to your crypto assets, allowing you to manage them while on the move.
You can easily access your wallet and all its assets by providing your email, just like you would with any other digital cash wallet. There is no inconvenience of remembering or carrying a long private key or seed phrase with you all the time.
When not in use, simply log out of your Paybis account, and nobody will be able to access your funds from the device.
Manage Multiple Assets
With the Paybis Wallet, you have the convenience of using a single wallet to perform various functions related to your cryptocurrencies.
This means that you don't need separate wallets or accounts for each individual cryptocurrency. Instead, you can manage multiple cryptocurrencies efficiently within the Paybis Wallet. Whether you want to send funds to others, receive payments, or store your crypto assets, the Paybis Wallet offers a unified solution for all.
Quick Buy Option
In the Paybis Wallet, you have the option to quickly top up your crypto assets by clicking on the "Buy" button next to the desired cryptocurrency. This feature allows you to conveniently purchase additional cryptocurrencies directly within the wallet.
When you click on the "Buy" button, you will be guided through the necessary steps to complete the transaction. This typically involves specifying the amount of the cryptocurrency you wish to purchase and selecting a suitable payment method.
Paybis Wallet supports various payment options, such as credit/debit cards or bank transfers, depending on the platform's available services.
By following the provided instructions and completing the transaction, you can swiftly add more cryptocurrencies to your wallet, enabling you to increase your holdings or make quick investments as desired.
Real-Time Prices
With the Paybis Wallet, you can stay up-to-date with the value of your crypto assets in real time. The wallet provides you with the ability to view the prices of all the cryptocurrencies held in your wallet, and these prices are displayed in USD (United States Dollar).
This feature allows you to monitor the market value of your crypto holdings conveniently. You can quickly check the current prices of the cryptocurrencies you own, enabling you to make informed decisions regarding buying, selling, or managing your portfolio.
The real-time price information ensures that you have access to the most accurate and recent data regarding the value of your cryptocurrencies.
Moreover, you can even view the total value of your portfolio in USD under "Balance."
On-Chain Wallets
The Paybis Wallet provides an added layer of transparency by storing your funds on a dedicated address. This means that your cryptocurrencies are not mixed with funds belonging to other users or stored collectively in a pooled address.
By having your funds stored on a dedicated address, you have the ability to independently verify and track your holdings on any blockchain explorer.
With the Paybis Wallet, you can verify the status of your funds by searching for your dedicated address on any blockchain explorer relevant to the cryptocurrency you are holding. This verification process gives you peace of mind and confidence that your funds are available when you need them.
By offering this level of transparency, Paybis ensures that your funds remain separate and identifiable, enhancing the trustworthiness of the wallet.
MPC Model
The Paybis Wallet is designed with enhanced security and convenience in mind, utilizing the MPC (Multi-Party Computation) model. One of the key aspects of this model is that your private key, which is essential for accessing and managing your cryptocurrencies, is fragmented and stored separately.
MPC is a cryptographic technique that involves distributing the private key among multiple parties, known as computation parties. Each party holds a portion of the key without having access to the complete key on their own. This distributed nature of the private key adds an extra layer of security to the wallet.
By fragmenting the private key, the Paybis Wallet ensures that even if one of the computation parties is compromised, an attacker cannot reconstruct the full private key and gain unauthorized access to your funds.
Convenience
Custodial wallets offer a greater level of convenience than non-custodial wallets because they eliminate the need for users to store and manage their private keys. However, this convenience comes with certain risks, as detailed in our article. Nonetheless, it provides users with an accessible means of engaging with cryptocurrency.
Paybis takes this one step further by providing access to multiple features within its single wallet solution. Whether you want to buy, sell, or store cryptocurrencies, the Paybis Wallet offers it all in one place.
Available on Web and Mobile App
The Paybis Wallet is available on both the web platform and mobile app. This gives you the flexibility to choose how you want to access your wallet.
The web platform provides an easy-to-use, intuitive interface for managing your wallet, while the mobile app (available on Android and iOS) allows you to access your wallet anytime, anywhere right from the home screen.
How to Set Up a Crypto Wallet: Paybis Wallet
Paybis Wallet is a free crypto wallet with intuitive design, and an extensive range of features to explore.
The process of how to set up a crypto wallet, in the case of traditional wallets, is tedious, and most beginners simply give up when they come across jargon like "seed phrase", "mnemonic phrase," and "private keys".
At Paybis, we have abstracted away all of that and take care of it under the hood. All you see is a simple sign-in interface and your crypto assets. That's why the Paybis wallet is used by thousands of customers.
So, how to create a crypto wallet on Paybis?
- Go to the "Crypto wallet" tab and click "Create wallet"
- Login to your Paybis account or signup for free if its your first time
- Click on "Add wallet" and choose from any of the available cryptocurrencies
That's it. In three simple steps, you have created your crypto wallet. You can use this not only to store crypto you buy on Paybis but also from external platforms.
If you want to add a different currency, click on "Add wallet" again and choose a different currency.
Paybis Wallet is available across iOS and Android as well.
What is the Safest Crypto Wallet?
There are different ways to measure the security of a cryptocurrency wallet.
Generally, the safest crypto wallet is the one with the highest Evaluation Assurance Level (EAL) rating, which ranges from EAL 1 to EAL 7.
EAL is a rating system used to assess and measure the security assurance of IT products and systems. The ratings are based on an international standard for evaluating and certifying the security of IT products.
Among the various types of crypto wallets, hardware wallets generally tend to be regarded as the safest option. They store the user's private keys offline, providing an extra layer of protection against online threats such as hacking and malware. Additionally, hardware wallets often have built-in security features, including PIN codes, encryption, and backup and recovery options.
Top Crypto Wallet Use Cases
Checking Balances in USD
Another useful feature of many wallets, including the Paybis Wallet, is the ability to check the balance of your holdings in both crypto and fiat currency. This helps keep track of how much you have gained or lost over time.
Sending Cryptocurrency
With Paybis, you can send crypto to anyone just like you would with any non-custodial crypto wallet. Just enter any wallet's public address and send crypto to it. There is no hassle of additional verifications of multiple confirmations.
Recieve Multiple Cryptos
The Paybis wallet allows you to receive multiple cryptos in one place. This means that instead of having to manage and keep track of different wallets for different coins, you have everything consolidated in one place.
FAQ
How to create a crypto wallet?
To create a crypto wallet, download the extension or app, note down the mnemonic seed phrase, and create a password/PIN to access it without having to enter a private key each time. Alternatively, you can log in to Paybis and create a wallet that you can access with just your email.
What is a crypto hardware wallet?
A crypto hardware wallet is a physical device that stores your private key. It is highly secure as it is kept offline (air-gapped), but it can be difficult to use for daily transactions. They also have built-in safety mechanisms like erasing the private key if somebody tries to hack the device.
Can I start my wallet anonymously?
All non-custodial wallets are anonymous as they do not require you to provide any personal information to register. However, be aware that transactions on the blockchain are public and traceable.
The Paybis wallet is a custodial wallet and hence it would not be possible to create an anonymous wallet at Paybis.
How do I choose a crypto wallet?
Choosing a crypto wallet depends on your needs and expertise. If you want a secure wallet, consider getting a hardware device. If you need convenience and don't want to manage private keys, opt for custodial wallets.
How many crypto wallets should I have?
If you are just getting started, use only one crypto wallet (with a small amount of funds) until you get the hang of it. That way, even if you interact with a malicious website or enter a wrong public address, you won’t be affected much. Once you become more comfortable with crypto wallets, you can decide to diversify and add multiple wallets for different use cases.
What is the most secure way to store my crypto?
The most secure way to store your crypto is using a cold (non-custodial) wallet. In this case, the security is only as good as the precautions you take to keep your private key secret and safe.
