There are a few ways to add money to your blockchain wallet, depending on the type of crypto wallet you have, as well as the crypto exchange you’re using to sell and buy crypto. Contrary to what you might think, this process is quite quick and straightforward.
In this article, we’ll bring you up to speed on crypto wallet transfers, the various types of wallets available on the market, and some general cryptocurrency info for your future investments.
What Are Cryptocurrencies?
Cryptocurrencies are cryptographically secure digital money. These currencies are very hard, or almost impossible to counterfeit or tamper with. Most of the cryptocurrencies are operating on blockchain technology, a digitally distributed ledger that operates through a web of connected computers. The main winning point of cryptocurrencies is their total decentralization, unlike government-issued currencies like the US dollar (USD) that are completely centralized.
The first cryptocurrency was Bitcoin, released back in 2009, and since then it has gathered almost like a cult following, taking the world in a frenzy with its crypto magic powers. Bitcoin was the first, but its release sparked a range of new cryptocurrencies that took a different approach and added something new to the crypto game.
There are many different cryptocurrencies in the world now, but most traders go after Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Ripple (XRP), Stellar (XLM), etc.
What Is a Blockchain Wallet?
A blockchain wallet is a crypto wallet that offers the possibility to manage different kinds of cryptocurrencies like Ether, Bitcoin, etc. The blockchain wallet allows for easy and smooth funds exchanges for the user. The transactions are cryptographically secure and almost impossible to tamper with.
The wallets are available on multiple devices, regardless of whether you use web access on Windows, Linux, and macOS, or use them as mobile apps, on iOS and Android devices. All you have to do is to log in with your credentials and you will be granted access to your wallet on multiple devices at the same time. Hardware wallets like the Ledger Nano can operate with additional apps, which enables you to purchase crypto from designated exchanges.
All in all, the blockchain wallet offers every feature one can ask for and provides secure transfers. They function similarly to the PayPal process for sending and receiving money, except that instead of fiat currencies, you use cryptocurrencies.
How Does the Blockchain Wallet Work?
When you create your wallet, you will receive a private key along with a public key that’s connected to your wallet. It’s important to keep your private key hidden from eyes other than yours. When you use the wallet in order to receive, send, or make general transactions to the wallet address, you use this key to connect with your bank account or the crypto exchange you want to use.
When you wish to add money to your wallet, you should make sure that you’re properly connected to your bank account. From there you can use fiat currency in order to purchase crypto with fiat, or if you wish to exchange crypto for crypto, you can use the crypto in your wallet and select your desired exchange to make your transaction. You can find these in the menu in the user interface of your wallet, most commonly located in some corner of the app.
Your private key acts as a password for your wallet. You use this key in order to gain access to your funds and spend them at your convenience. Blockchain wallets use this combination of public and private keys in order to achieve maximum security for your assets.
The features of blockchain wallets are numerous and might be even more expanded upon in the future. They’re easy and straightforward to use, just like the software you use day-to-day on mobile phones or desktops. Moreover, they’re both secure and allow worldwide transactions without the need for intermediaries and third-party interference.
Blockchain wallets offer low transaction fees for adding or spending funds – significantly lower than the ones charged by banks and money transfer agencies. They allow traders to use multiple cryptocurrencies, which means that the conversion process is pretty straightforward. If you want to convert Bitcoin to Ether or vice-versa, you can do it with just a few clicks.
How to Buy Bitcoin with a Blockchain Wallet?
Here’s a step-by-step guide on how to make a transaction and purchase Bitcoin with your blockchain wallet:
- First things first, you should simply log in to your wallet and make sure that your bank account is connected to your wallet.
- Next, on the wallet’s homepage, select the prompt Buy and you will be redirected to a new window that will allow you to select the cryptocurrency you wish to buy.
- Select the crypto you want to purchase and enter the amount of fiat currency you want to spend (or crypto).
- Later, you will be asked to choose your payment method. Some wallets allow the usage of credit cards, but the most common payment method is through a debit card.
- Once this is done, click on the next prompt and proceed to the checkout stage where all of the purchase details will be listed. Finally, if everything is as it should be, just click on the Buy prompt to place your transaction.
Different Types of Wallets
There are a few different types of wallets for your favorite payment methods. They can be broken into several categories but the main split is between hot wallets and cold wallets.
Hot wallets act like a normal online wallet that you can use to make your daily transactions (similarly to a debit card or e-banking). They are offered by several exchanges like Coinbase and Blockchain.com. These are used for quick and easy crypto-to-crypto or crypto-to-fiat exchanges on a daily basis.
Cold wallets act as bank safes for your crypto holdings. They keep your private keys offline, which means that they are hack-resistant. The transactions are signed offline and later verified online through your deposit address. Companies like Trezor and Ledger offer the best cold wallets. These wallets offer great deals and have a full 24/7 support team to answer all of your questions.
A third type of wallet is the paper wallet. This wallet has your private and public keys printed on it and they can be accessed by a QR code on the back of the paper wallet. Paper wallets are deemed safe and are widely used by the crypto community. You can get a wallet like this from Bitcoin Paper Wallet or MyEtherWallet.
A Few Words Before You Go…
In this short informative article, our goal was to briefly explain blockchain wallets and their different types, as well as how to use them to make a crypto purchase.
You may have noticed by now how everything is interconnected when it comes to crypto and digital wallets. From bank accounts, private and public keys, to cold and hot wallets, all of this might be a little overwhelming for a crypto market beginner, but thanks to our informative articles, you can become an intermediate in no time, as long as you put the hours into it.
Your main motivation should be that cryptocurrencies have been around for just over a decade, and they probably will be here for a long, long time to come. Even if you think that you are late to the crypto game, better late than never.