#6 SMT01 For Trading In Crypto Space

Hello! Friends,

Welcome to the class again today. It has been an awesome moment since we started SMT01 and I know we are learning one or two important terms as far as crypto space is concerned.

Today, we will go into crypto space security where I will share some information about wallet and storage facilities in crypto space.

_{Pixabay: Ledge wallet}

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• Wallets

In crypto space, who hold and manage your tokens is of vital importance. In a wallet, holding can be inside a paper wallet, hot wallet, hardware wallet or software wallet, in all this you are the controller of your account with your private key you have access to all holdings in your custody. Do you imagine the buying and selling of token on an exchange platform where are all this token stored? All buying and selling of token in exchange platform are stored in wallets of their own. This means that there are several wallets on an exchange platform depending on the cryptocurrencies such as exchange platform support. Since many trades have experienced fraud in one way or the other, maybe via experience their friends had or by the crypto news they read, this made many of them worry about centralized cryptocurrency exchange because the moment the exchange is hacked, all money invested is gone.

Now let's consider each of the wallet one after the other:

• Hot Storage

A typical example of hot storage is a web wallet or mobile wallet. So, we can say such storage are crypt wallet that connected o the internet. The good about this wallet is the ability to recover your password in as much the company that provides the wallet put reset option or forget password icon into consideration when building the wallet.

• Cold Storage

This is offline storage where cryptocurrency can be kept. Example of cold wallets are a paper wallet or hardware wallet, this is not connected to the internet. This is more secure due to the fact that your private keys are kept away from where hackers or any other entities can find them. The problem this has is if you forget or lose your information to recover such wallet is impossible because you are the only one that has the information.

• Paper Wallet

As the name implies, its a wallet in which the currency is printed on a piece of paper. This particular wallet as far as crypto space is concerned can be generated via bitcoinpaperwallet.com and this wallet is totally offline with the combination of a private and public key to make the wallet more secure against theft but on the other side when lost it, it is impossible to recover.

• Hardware wallet

This wallet comes with a unit of security-audited hardware which usually stores your private keys and allows you to store, receive and send cryptocurrency. In crypto space, hardware wallets are the most reliable and safest storage solutions. Example of such a wallet is Trezor and Ledger.

Security

Sequel to experience encountered in line with hackers, it is important to not rely on your wallet password. There is some certain security you can put in place to guide against any form of hacker attempt with your wallet.

• 2-Factor Authentication (2FA)

Like the name, it is a second method of verification apart from your wallet password and this is in place to make your trades and other transactions secure. 2FA comes with multiple methods, some is a piece of hardware (U2F) or via software which is Google Authenticator.

I need to stress this, most time when we do consider 2FA security some of us make use of enabling text message or phone call, I must say hackers are very skilled and they can find ways to call your phone company and convince them that they are you and through this they can use phone-call or text message 2FA to access your accounts. When you know what is inside your wallet you need to protect it well.

• Universal 2-Factor (U2F)

This is a specialized encrypted USB drive which can be inserted into your computer as a method of 2-factor authentication. YubiKey is leading as far as U2F is concerned.

• Multisignature (Multisig)

This is cryptocurrency transactions that need more than one signature to be approved. If you don't understand what signature means but you are familiar with 2FA you will agree with me that before a transaction to execute you will need to append your signature via the information provided by Google Authenticator or U2F, same with Multisignature but this requires lots of applications which we shall discuss later. For simplicity, arrangement from wallet password to 2FA information and sign in can be called Multisignature because it requires more than one signature to execute that transaction.

Let's stop here, In our next class, we shall dwell on Crypto Space Different Strategy On Trading. Watch out.

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