A software wallet is like a digital bank account for your cryptocurrencies. When you use a wallet, you are able to send, receive and manage your coins. In this article you’ll learn how to use a software wallet and which different kinds of wallets exist.
What is a software wallet?
A software wallet is a program that you install on your computer.
It might seem like you store your coins on your computer, but that’s not the case. Your crypto currencies are always stored on the blockchain. You should see your wallet as a sort of keychain that stores the keys that give you access to your coins.
A wallet generates a seed phrase (or recovery seed), this is a usually a series of 12 or 24 randomly generated words. Those words form a unique combination (like a password) that you can use to prove ownership of your coins. With these words you can gain access to your coins from any kind of wallet.
Which software wallets are there?
There are different types of software wallets. We will highlight one of them below.
Please note: when you would like to download a software wallet on your PC or Mac, make sure to download it from the official website of the wallet provider. If you download it from a different website, the software could be infected with malware by hackers.
Exodus: supports bitcoin, litecoin, ether, XRP, and bitcoin cash
One of the best known and most used software wallets is Exodus. This wallet allows you to store and manage multiple coins simultaneously. The wallet supports bitcoin, litecoin, ripple and ether amongst other coins. For example various tokens on the Ethereum network (ERC-20 tokens).
The Exodus wallet combines functionality with ease of use. The developers have paid a lot of attention to the graphic aspect, which reflects in the design. The interface looks clear and structured. And you can download it free of charge.
How to install a software wallet?
- Go to exodus.com
- Click download on the top right and choose desktop wallet.
- Download and open the wallet.
- Then click on the coin you want to receive, in this case bitcoin.
- Click receive and your bitcoin receiving address will appear. (You will need this in Step 3 shortly!)
- You are now ready to receive bitcoin but we recommend backing up first.
- To do this press the "settings" icon at the top right.
- At the top of the menu bar you will see backup, click on it.
- You will first create a unique password. This allows only you to access your desktop wallet.
- Then you will receive the "recovery phrase", these are 12 words with which you can always recover your wallet.
NOTE: These words give direct access to your wallet, so do not share them with anyone! Write them on a piece of paper and keep it in a safe place!
How do I secure my software wallet?
Software wallets store the private keys in the application, but that doesn’t mean you can’t lose your coins. If someone steals your computer and figures out your password, he or she is able to access your coins. That’s why it’s important to make a backup.
Back-up
You can create a backup by writing down your recovery seed. The seed usually consists of 12 or 24 randomly generated words. Make sure to write down the recovery seed on a piece of paper, do not store it digitally or online. With the seed, you will be able to access your coins at all times; you don’t even need the computer you’ve installed the software wallet on.
SOLIDHODL
If you’ve written down your recovery seed, you have a pretty secure backup, however this method isn’t 100 percent bulletproof. In case of a fire or a flood, the piece of paper that has your seed written on it will be useless. That is why SOLIDHODL was invented!
SOLIDHODL is a metal plate on which you can store the recovery seed. Literally in this case, because you store the characters on the plate. The metal plate can withstand extremely high temperatures. This means your recovery seed is well protected even in the event of a fire!
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