In the series “The 10 biggest myths about crypto currencies” we would like to take a closer look at the 10 most common claims concerning crypto currencies and their chances and risks. We will knöpfen ourselves daily a new myth and check this for correctness.
The storage of Bitcoin evolution is cumbersome and risky
A common concern about the Bitcoin evolution and other digital currencies is that they are not physical money in the traditional sense – people don’t feel they have money in their hands and can spend it. Instead, cash that you keep in your own wallet gives you the security of owning money and being able to spend it freely.
The way in which money is stored therefore plays a central role for its owner, especially with regard to availability and security. This is exactly where the criticism of many potential investors starts, who lack exactly these elements of Bitcoin evolution crypto currencies. Instead, the storage possibilities of crypto currencies are unclear, make unnecessary efforts and are also not particularly secure.
Now one cannot contradict these arguments, which are presented primarily from the point of view of non-kryptoaffiner humans or beginners, completely. For someone who is dealing with the subject for the first time, the various storage options in virtual purses (so-called wallets) can quickly become so confusing. One can lose track of where one stores one’s money now.
The most similar to a classic wallet is a hardware wallet on which the digital money is stored separately and securely
In any case, it is advisable to transfer your acquired crypto currencies to a wallet afterwards and not to leave them at the stock exchange. This is the only way to get your private key, which is necessary to get access to the crypto currencies. A Private Key is generated for each new address. This must be kept very secure and secret, otherwise unauthorized persons can gain access to the coins in the wallet.
When choosing the wallet or wallets, it should be noted that there are different ways of securely storing crypto currencies. While an online wallet is available free of charge and – assuming Internet access – from anywhere, there is the situation that the keys are managed by external companies and the user cannot check their security himself. Desktop and mobile wallets solve this problem, but are bound to the respective devices in terms of both space and security. Moreover, mobile wallets do not function as a fully-fledged client, as it would exceed the volume of a mobile phone to load the entire block chain.
The major disadvantage of this solution compared to the other, spatially bound wallets is the high acquisition costs of hardware wallets. As a rule, however, storage on an offline device (cold storage) is considered more secure than storage on a device that is permanently or temporarily connected to the Internet (hot storage).
Basically, storing and switching between different means is no more cumbersome than handling cash. In order to transfer money from your bank account to your wallet, it is necessary to go to an ATM. Anyone can transfer money from the hardware wallet to their smartphone personally and from anywhere.
This myth – like so much else – can therefore be said about: Once you have a good look at the system, the everyday challenge you face is less of a challenge.