May 29, 2024

Multi-Currency Crypto Wallets and How to Keep Them Safe

Multi-Currency Crypto Wallets and How to Keep Them Safe

The blockchain space is heating up and with a hotter market, more people are interested in buying crypto assets or making other secondary plays.
In that context, there’s a standard tool that many people are considering for their digital assets: a multi-currency crypto wallet.

Understanding the Crypto Wallet

First, a primer on crypto wallets. A crypto wallet is not a physical container. It’s a software that helps you manage your digital assets with public and private keys — and more. Many digital wallets let you transfer value by scanning QR codes or using various contactless systems. They may also have other neat features for transparency and use, like a good interface showing you what’s “inside the billfold.”

You can add digital wallets to a device desktop — these types are often called software wallets. Or, you could have them on a flash drive or other device with the resident software on it — people often call these hardware wallets.

This difference can confuse people trying to visualize a crypto wallet. (Is it a physical thing, or isn’t it?) Remember, a software wallet has no physical form, but a hardware wallet does. Some are flash drives, and some are just cards with a chip in them.

The Multi-Currency Crypto Wallet

What is it, exactly? A multi-currency crypto wallet is a cryptocurrency wallet that holds more than one type of digital money.
Early crypto wallets were sometimes limited to a particular cryptocurrency, like BTC or Ethereum. But as the crypto sector developed, engineers started making crypto wallets that can hold many types of money.

Multi-currency crypto wallets may allow users to keep two, three, or more kinds of crypto, including common coins and tokens like BTC, Ethereum, Litecoin, BSV or Solana. And that’s only the tip of the iceberg, as hundreds of cryptocurrencies compete for attention in this diverse market.

Along with holding many centralized and decentralized crypto coins and tokens, multi-currency crypto wallets might also let you keep fiat currency in digital form next to your crypto. Or, these wallets may allow for stablecoins like Tether, which are pegged to the value of the U.S. dollar.

Gathering these resources can bring huge opportunities in terms of using blockchain assets in real-life scenarios. Holders can “stake” digital assets for interest and growth, trade them with strategies like arbitrage, or use them to mint NFTs (another quick-growing part of this overall market).

Types of Multi-Currency Crypto Wallets and Their Advantages

When choosing among the various types of crypto wallets, it would help if you have a basic understanding of custodial and self-custodial (or non-custodial) wallet options.
This means you’ll have to choose a crypto wallet that lets you hold your assets (a non-custodial wallet), or you’re allowing an exchange or another party to manage the assets for you (a custodial wallet).

A wallet tied to an exchange is an example of a custodial wallet, whereas a non-custodial wallet means that you are in complete control, and no institution or mediator is helping to hold those assets.

There’s also a difference between hot and cold wallets. Here, you can go back to the jargon we use for data archiving and storage. “Hot” would mean that your crypto assets are still connected to a network like an exchange or internet-based system.

Cold wallets, on the other hand, are completely disconnected. Think of the cold crypto wallet as burying your crypto in a digital jar in your digital backyard. It also means that if you lose it, it’s gone.

Hearing some horror stories about people losing millions of dollars in crypto on a cold wallet might have you thinking about hot wallets. However, those who don’t trust third-party exchanges or are worried about hacking may still prefer a cold wallet strategy.

Another consideration is where you find the wallet — as a resident on computers, often downloaded as software, or on mobile devices. Since we use our mobile devices for all kinds of things, including shopping, the contactless system on a multi-currency crypto wallet may be helpful for merchant transactions.

Advocates of a “free money” approach are excited about how crypto enables new, easier ways of working with value. Already, international payments are getting more accessible by letting users sidestep the antiquated SWIFT system with cryptocurrencies that don’t stop at a border.

Companies are experimenting with other tools, too, like crypto credit cards and related carrying structures. Yet, the crypto wallet is still central for people who need or want asset versatility. The multi-currency crypto wallet will serve as one of the most valuable types of crypto wallets as people diversify their assets.

Other Security Advantages of Multi-Currency Crypto Wallets

Many of these wallets represent secure places to keep your crypto and fiat assets in digital form. Plus, more than a few are equipped with state-of-the-art security encryption algorithms.

These wallets are designed to resist various types of tampering and hacking. Of course, the best multi-currency crypto wallets help you keep public and private keys and use them for legitimate operations while locking other users out of the equation.

Experts even talk about how multi-currency crypto wallets serve as a thin attack surface, foiling blackhat actors and people who want to hack into your network and steal your crypto or other assets.

Best Practices for Crypto Wallets

Although multi-currency crypto wallets are designed for safety, some best practices will help keep your crypto in better storage.

One big step is to evaluate hot and cold storage scenarios. If you feel you can keep assets on your own without losing them, a cold wallet may be the way to go. However, tragic stories of loss make people hesitant of this storage method.

Another safety tip is to store any hardware wallets in a secure vault rather than leaving them lying around. This option may compromise your ability to make short-term trades, but your cryptocurrency and assets will be safer.

Good password hygiene is also paramount. In unlocking crypto, you’ll use a public key and a private key composed of 64 alphanumeric characters — often called a “seed.” One of the biggest rules in crypto security is to protect your seed — to keep that seed from other people, but have it where you can use it when needed.

As Michael Abbott points out in his presentation, Money in the Metaverse, multi-currency crypto wallets will benefit the new frontier of data operations. They’ll also help as we mingle in virtual halls and enjoy a robust ability to use VR and AR to our advantage.

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