In 2022 Nigeria acquired the status of most crypto-interested nation, according to many researchers: more than 10% of country population own crypto. It brings Nigeria the 6th place in the crypto ownership rating among the world countries. Google search data also shows incredible curiosity to buying and storing cryptocurrency assets.
If you are the one of those, who interested in investing in cryptocurrencies in Nigeria or have purchased a digital asset, you may be wondering how to store it now safely. It is the most important thing to consider to ensure the security of your digital asset, be it cryptocurrency or NFTs. And your crypto wallet plays a bigger role than you might think in keeping your assets safe.
Let’s start with a definition, then go to how it works and then talk about what types of crypto wallets are there and how to choose the best option, finally.
Generally, a cryptocurrency wallet is a device or software application designed to store and transfer your cryptocurrency.
How Does a Crypto Wallet Work?
Cryptographic wallets can be thought of as a digital safe deposit box that only you have access to. The wallets have a key pair: private and public keys.
Public key in simple words is an address of your crypto wallet in the form of randomly generated alpha-numeric symbols.
The most important aspect of a wallet is the private key, and it is frequently where new users get into issues. A private key is similar to a key to a safe deposit box. Anyone with access to the private key of a wallet can control the balance.
The private key is also used to initiate transactions known as “signing”. As a result, a private key is required for all types of wallets, whether hardware or software.
One of the most important advantages of either type of cryptocurrency self-storage is that the assets are protected by private key cryptography, which is similar to the technology used to secure your credit card information when you make an online purchase.
Crypto Wallet Types
The classification of crypto wallets is required to understand and differentiate between various functionalities.
There are several types of crypto wallets based on the devices used:
Web or mobile wallets are the most convenient. They allow you to access your coins from any internet-connected device and don’t require any software installation. Examples of web wallets include Coinbase or Cropty, which is available in Nigeria.
Desktop wallets are more secure than web wallets but are less convenient. They require you to download and install software on your computer, but give you more control over your private keys. Examples of desktop wallets include Electrum and Exodus.
Hardware wallets are the most secure type of wallet for Nigeria, as they store your private keys offline on a physical device. This makes them immune to hacker attacks and malware that can infect your computer. However, they can be expensive and inconvenient to use, as you need to have the hardware with you in order to access your coins. Examples of hardware wallets include Trezor and the Ledger Nano S.
Paper wallets are perhaps the safest way to store your bitcoins in Nigeria, as they cannot be hacked or infected with malware. However, they can be lost or stolen and are not very convenient to use. A paper wallet is simply a piece of paper with your public and private keys printed on it.
Custodial and non-custodial crypto wallets
There is a lot of buzz around cryptocurrencies in Nigeria related to decentralization, cryptography, proof-of-work, etc. But the most important aspect of cryptocurrency is “complete ownership of your asset.” To simply explain, in a traditional economy, Nigerian banks act as agents to perform different functions with your money. For example, banks validate your transactions, they can freeze your account, and they store your private financial data. It is that in crypto is known as custody.
However, in a blockchain ecosystem, all the interactions are done by people based on a set of rules. Basically, you can be your own bank and perform various financial functions like staking, lending, transferring, and storing your assets without any intermediaries. That is, rather than going through a third party, such as a bank or financial institution, you can store your cryptocurrency on the blockchain and access it using a private key.
So, crypto wallets can be custodial and non-custodial.
- Custodial services, such as a cryptocurrency exchange, keep public and private keys on the servers of the company. Furthermore, data backup is the developer’s responsibility. Crypto exchange wallets and some software wallets fall into this category.
- Non-custodial wallets. Users can store keys on their devices with non-custodial wallets. When opening an account in such a wallet, the user enters a recovery phrase to ensure that they can access the cryptocurrency even if the keys are lost. These wallets are basically an open-source code, which is ruely decentralized and let you keep your private-keys private.
Some argue that storing cryptocurrency on centralized custodial services is less secure than storing it by yourself. But in case of self-custody there is a risk of losing your private key, and you will not have a support number to call and restore the access to your wallet. Take this into account when choosing a crypto wallet provider.
Important Features For Wallets
There are many important features to consider when choosing a crypto wallet, but security is perhaps the most important. After all, you trust your wallet with your hard-earned money, so you want to be sure it’s safe. Here are some things to look for in a secure crypto wallet:
- A good wallet should have a user-friendly interface that is easy to navigate.
- It should offer a variety of features, such as the ability to send and receive payments, store multiple currencies, and track your transaction history.
- It should also be secure, with features like two-factor authentication and backup options to help protect your funds.
- Finally, it should be compatible with the devices and operating systems you use.
With Cropty.ng you will find the best crypto wallet in Nigeria and worldwide!
