The wallets, purses or wallets of Bitcoin, and other criptomonedas store private keys needed to access the balances recorded in an address or public key corresponding chain blocks and to spare. Currently, there are several types of cryptocurrency portfolios that can be categorized using two variables: ease of use and security. For full information learn BitcoinBestBuy Airbitz review.

At the tip of the pyramid shown in the image are the safest and most difficult to use portfolios, while in the background are the easiest to use, but also the least safe. The pyramid also represents the adoption in use of each type of portfolio: those of the fund is widely used, while those of the cap is not so widely used; a contradictory condition of the ecosystem of cryptoactive portfolios, given the fact that it is money with what we are dealing with. Safety is a determining factor in a good portfolio of cryptoactives.

Starting at the bottom of the pyramid, there are exchange houses, which act as a bank of cryptocurrencies: users enter their crypto-assets in an assigned address and the "bank" is responsible for managing them, that is, they move the money of the users to one or more central portfolios and from where they carry out the instructions of payment, purchase or sale that their clients indicate. They are useful for the exchange between cryptoactives and fiat currencies. These services are prone to hacking, scam, service drops and other risks, so that users' money may be unavailable or simply disappear; In addition, they usually change the conditions of use at their discretion, causing account closures and other inconveniences to users.

Some house exchange services are Airbitz, Coinbase, Poloniex, Bittrex, Xapo, Bitfinex, Bitstamp, LocalBitcoins and many others.

Essential characteristics of a cryptocurrency purse

Control over money: cryptocurrency portfolios can allow individual management (only the user owns the private keys), joint management (the owner and the company own private keys), or by a third party (the company owns the keys) private) of the money stored in them. Depending on the control over the management of the money that is chosen, the responsibility and control of the user and the security of the funds in the portfolio increase or decrease.

Validation: cryptocurrency purses can be used to validate completed transactions, full validation (full node, fully download the blockchain), simplified validation (simple node, just download block hashes), or centralized validation (full node) of a third). Based on the type of validation used by the wallet, it must be trusted or not that a third party performs the correct validation of the transactions carried out.

Transparency: cryptocurrency purses can be completely transparent (the application code can be audited and verified by the user), transparent (the code can be audited, but can not be verified by the user), or nothing transparent (the code of the application is closed and the application runs remotely). Depending on the degree of transparency, the user should trust more or less than the developer of the application did not add secret or malicious codes that could cause them to lose their funds or be stolen.

Environment: cryptocurrency portfolios can be installed in vulnerable environments (prone to viruses) with or without two-step authentication, secure environments (such as cell phones where applications are isolated), and highly secure environments (such as physical cryptocurrency portfolios), gadgets). Given the type of environment used, the user must activate mechanisms such as two-step authentication and place complex passwords to their portfolios and devices to avoid loss or theft of funds.

Privacy: cryptocurrency portfolios may or may not disclose information about their users to the nodes of the network (such as the IP address), re-use or not the addresses of the portfolios with each payment, and allow or not the use of the Tor browser to prevent other people or companies from associating transactions with the user's IP address. Depending on the type of privacy that the portfolio provides, the user should be more or less aware of the information that reveals the network.

Author's Bio: 

Hasan Root, a dream lover.