The use of cryptocurrency for online gambling is more than a trend now. As digital currencies go mainstream, they have become viable payment options for players. Bitcoin is the most used coin, thanks to its dominance. Online casinos accept numerous other currencies, though, including Litecoin, Ripple and Dash. Cryptocurrency gambling delivers quick, cheap and convenient payments, hence, the rising popularity. As gamblers flock to gambling sites to try their luck, they must familiarise themselves with certain aspects of crypto use. When gambling with digital coins, you need a wallet for your crypto payments.
A Bitcoin or crypto wallet holds digital currency, allowing you to send and receive funds. You can consider the application as storage for your coins. However, in reality, the digital currency remains on the blockchain. The wallet contains the cryptographic data that gives you access to coins. It holds private keys that authorise transactions from the corresponding address. Therefore, the person with the key is in control. Crypto wallets are available in several forms to cater to various customer needs. Thus, you have to find a suitable application for your online gaming requirements. For that, you need some crucial information about how crypto wallets work.
Custodial vs Non-Custodial Wallets
One distinction that every player should make when comparing crypto storage options is whether they are custodial or not. This difference refers to the way a wallet’s keys is stored. One quick tip that gamblers should be aware of is that a wallet has two keys – a public and a private one. The private key generates the public key, which is the address that other currency holders can use to send you funds. A wallet comprises multiple public keys, meaning that different senders can use separate addresses to send coins to the same storage unit. The private key is the one that you hold as the currency owner.
In a custodial wallet, a third party, namely the vendor, stays with your private key. The vendor is responsible for the key, but you can still access it to authorise transactions. Clients get login credentials that allow them to conduct payments as necessary. If you lost your login details, the provider has a recovery system. A custodial wallet permits the third party to monitor the transactions between the end user’s assets and the private key.
This wallet has a single point of failure. The third party provides all the security measures to keep private keys safe. So, the end-user doesn’t have to worry too much about safety protocols. You enjoy a seamless user experience, which is perfect for a crypto beginner. A downside, though, is that custodial wallets are popular targets for attacks. If the vendor suffers a data breach, then all the keys it holds could be compromised. Therefore, before reading Crypto Casino reviews to find an ideal gambling site, decide if a custodial wallet is the best option.
The alternative is a non-custodial wallet, where the end-user controls the private key. You don’t rely on the vendor to transact on your behalf. Also, the third party doesn’t track the user’s identity. Thus, it falls on the wallet owner to implement the required security measures to protect the key. Bad actors have to attack the end-user directly to compromise wallet security. Although a non-custodial Bitcoin wallet affords you data freedom, it burdens you with heavy responsibilities. If you lost your private key, then you would lose all your assets as well.
Types of Wallets
Another element that you have to consider is wallet construction. Different wallets have their pros and cons, which you should evaluate carefully.
Coin storage solutions linked to the internet are referred to as hot wallets. The wallet uses software code to store the private key online. Hot wallets come in different configurations.
A web wallet uses an online service to store keys on a server. A third party controls the wallet and gives you access from anywhere. With a web wallet, you only need an internet-enabled device to authorise transactions. E-wallets are suitable for newbies because they don’t require users to do much. A majority of web wallets are available in coin exchanges, which simplifies payments even further. However, e-wallets are highly prone to attacks.
Desktop wallets require you to install an application on your PC, thus, giving you complete control. This implementation means you don’t have to depend on a third party to protect your private key. Despite the wallet being on an SSD or hard drive, it’s still connected to the internet. Thus, you should apply the necessary precautions. Desktop wallets feature different functionalities to serve specific needs. Some are built for decentralisation, others for security or convenience.
Mobile wallets work similarly to desktop applications, except that they are downloaded to handheld devices. An app stores the key, enabling you to authorise transactions with a few taps. A mobile wallet is ideal if you prefer gambling on the go. You can send and receive funds as long as your iOS or Android device is connected to the internet.
Digital assets don’t need to connect to the internet, and cold wallets help with that. These storage solutions are considered safer than hot wallets because they have few vulnerabilities. Hardware wallets are the primary offerings in this category. Your private key is on a physical device. Therefore, when you need to use the wallet, you have to link the hardware to the application. The end-user details remain on the device at all times. Hardware storage demands robust security and is costly. If you transact in large amounts of digital currencies, and not only for gambling, then a hardware wallet might be a justified investment.
A growing number of players are turning to cryptocurrency gambling as digital coins become more accessible with time. So, gamblers must learn how to use crypto efficiently, and that includes knowing how to pick a suitable wallet. Your coin storage option determines user experience, associated risks and cost. Hence, choose wisely.