Cryptocurrency wallet – How do they help you invest in cryptocurrencies?
Cryptocurrency Wallet – Consumers who frequently purchase items from e-commerce websites and mobile apps have been using digital wallets for years. Take for example PayTM. It is a digital wallet that can be used to make payments at shops or pay your utility bills. There is a great chance that your roadside vegetable seller or fast food joint accepts payments from Paytm.
The digital wallet acts like the conventional leather wallet that you carry in your pocket. To put money in your leather wallet, you got to have money.
In the same manner, you got to have currency if you want to put that currency in your digital wallet. The same holds true for cryptocurrency wallets.
Why are cryptocurrency wallets important if you need to invest in a blockchain ecosystem?
Cryptocurrencies are not your conventional currencies. You cannot stash them in your bank accounts. People cannot straightaway transfer cryptocurrencies into your bank account. You cannot use your credit cards to make payments.
The biggest draw towards digital investing through cryptocurrencies is their Defi (decentralized financing) nature. You can leapfrog over conventional financial institutions and directly trade in crypto tokens and cryptocurrencies with individuals.
So when you receive cryptocurrencies, where do you store them? They cannot just float around. They are stored in your cryptocurrency wallet. It is also called a blockchain wallet because it exists over a blockchain. If you want to trade in Bitcoins, you need a cryptocurrency wallet that is built over this particular blockchain technology. Similarly, if you want to use a wallet that can store the Caesium tokens, you need a wallet that is built over the Time blockchain.
Key features of a cryptocurrency wallet
- It allows you to store, manage and trade in cryptocurrencies.
- A blockchain wallet normally functions on a particular blockchain, for example, a Time blockchain wallet will function within the Time blockchain ecosystem.
- Some wallets can store and trade in multiple cryptocurrencies.
- There can be some nominal fee for using a cryptocurrency wallet, but it depends on your transactions and the blockchain wallet you happen to be using.
- Every cryptocurrency blockchain wallet comes with its own inherent security features.
Why are more people and businesses switching over cryptocurrency wallets for digital investing?
Using conventional means of money transfer is quite expensive. Have you ever wired money to someone? Then you must know that you need to pay extra money to the bank or the financial institution that wires the money.
If you use a credit card, for every transaction you are paying to the credit card company. If you have a merchant account, for every item you sell and receive payment for, a small portion is deducted by the company that handles your payment gateway.
There are also processing delays that affect your cash flow, especially when you need to carry out multiple transactions.
Most of the cryptocurrency transfers on the other hand are free. For example, you do not have to pay a fee to trade in Caesium tokens. They arrive in your blockchain wallet in their full capacity, without any deductions.
Digital investments made easy with cryptocurrency wallets
Planning to invest in cryptocurrencies? Whether you are looking for long-term investment options or you want to make some quick money through intraday trading, a cryptocurrency wallet is indispensable if you want to trade in cryptocurrencies.
Cryptocurrency transactions happen peer-to-peer. Hence, there is no delay. The moment someone transfers you a cryptocurrency amount, it is reflected in your blockchain wallet. There may be some wallets that charge a nominal fee, but many do not. But the moot point is, the transaction is instantaneous.
Why does it matter?
The prices of cryptocurrencies can fluctuate extremely fast within a day. If you want to leverage this volatility, you cannot wait for the transaction to happen because, if it takes a very long, by the time the transaction happens, it may solve no purpose because the value of the cryptocurrency may have changed. This is a big problem on the traditional trading platforms.
Cryptocurrency transfers in blockchain wallets happen immediately.
Also, since transaction fees are quite low and sometimes, no transaction fee at all, if you need to buy and sell cryptocurrencies and tokens multiple times in a day, you will not incur lots of expenses. Blockchain wallets have a pair of keys that are generated during a transaction. One is the public key that is available to everyone to establish ownership, and the other is a private key to provide access to only the authorized person. The integrity of the public key and the privacy of the private key work in conjunction to provide solid security and ownership to the cryptocurrency wallet users.