Here’s why Cryptocurrency wallets are not good enough

By Naveen Joshi – Founder and CEO of Allerin (www.allerin.com)

Works in Big Data, IoT , AI and Blockchain.

• Despite the numerous advantages of cryptocurrency wallets, there are certain limitations of cryptocurrency wallets like cybercrime risks, which cannot be ignored.

Storing the private and public keys, cryptocurrency wallets allow us to send and receive crypto funds readily. You can keep the cryptocurrency wallet on your smartphone, server, or a desktop. These cryptocurrency wallets represent a shift from the traditional payment method, giving us numerous advantages over the conventional approach. Cryptocurrency wallets work like a digital wallet or E-wallet, providing a way for blockchain users to store their tokens, cryptocurrencies or digital assets. No doubt, cryptocurrency wallets offer many benefits, including

  • No need for carrying paper money around,
  • Convenient buying experience,
  • No extra fee

Despite the benefits that come from the cryptocurrency wallets, users have to face certain limitations of cryptocurrency wallets too. Concerns around the wallet range from security to software and hardware components to lost funds to volatile nature of cryptocurrencies, and it is necessary that we understand how it will impact our wallet usage soon.

Limitations of cryptocurrency wallets

The first and the foremost issue with cryptocurrency wallets is security concerns about the personal information. No doubt, the wallets have the best means of security in place, but with near-field communication, there are chances that hackers might steal your personal information. Another burning problem is that since the underlying technology, and the concept of cryptocurrency wallets, is new and has not reached everyone, it becomes difficult for blockchain users to use their wallets worldwide. Besides, people using smartphone-based cryptocurrency wallet will have to face problems if their smartphone is out of battery or if their phone is lost. If you lose your credit or debit card, you can get it fixed just by making a call to the bank. But, this is not the case with the cryptocurrency wallets. Once you lose your smartphone, your wallet and funds within it is lost forever. Desktop wallets are also risky. During software or hardware breakdown, there are high chances of losing data, which is again a big problem.

Addressing the limitations of cryptocurrency wallets

Here are a few tips that can help blockchain users to store and exchange assets on a cryptocurrency wallet better:

  • Ensure wallet safety with not only primary security means (passwords) but also with two-way authentication
  • Check and analyze your software/hardware regularly
  • Maintain backup for your wallet software, which will help you cope with situations like software malfunction
  • Secure the private key for your wallet, because losing it will result in losing your tokens forever
  • Use a different browser while storing, purchasing, or exchanging cryptocurrencies on an online wallet, to prevent the occurrence of a breach

It is essential that blockchain users invest their time and effort to decide before they choose cryptocurrency wallets for their cryptocurrencies. However, it is true that online wallets possess security risks, and hence the users can try using hardware wallets or hot wallets, which can provide both, high security and excellent performance.

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