Hello Steemians. This is my week 3 homework post on the task given by professor @sapwood. These are the tasks below;

Homework Task
(1) Have you ever used a Hardware/software wallet? Which one is having a better security advantage?
(2) What are the important points to consider when you deal with an Exchange(centralized) Wallet & Decentralized wallet. How do you secure/restore both types?
(3) Give an example of a Web 3.0 wallet and what are the distinct uses of a web 3.0 wallet? Have you ever used any Web 3.0 crypto Wallet? Examples?

Types of Crypto Wallets

Crypto wallets are classified as "hot" or "cold" based on the way they operate.

A hot wallet is a wallet that is connected to the internet. Exchange wallets, mobile wallets, and desktop wallets are examples of hot wallets.

A cold wallet has no connection to the Internet, instead, they use a physical medium to store the keys offline, making them resistant to online hacking attempts. Paper wallet is an example of cold wallet.

Every crypto wallet is broadly classified as either a hot or cold wallets.

Hardware Wallet

A hardware wallet is a portable device that gives us secure access to our crypto. It functions by generating a user’s private keys in a secure, offline environment while featuring an easy to use display.

It usually connects via USB or Bluetooth to internet-connected devices like your computer. A separate screen on the wallet is used to verify and approve transactions to help prevent disclosure of sensitive information to the internet-connected device. This all combines to be very handy as you don’t have to worry about a computer being compromised.

Aside from security advantages, a hardware wallet also gives users tactile control over their funds.

Hardware wallets combine the safety of cold wallets, along with the ease of transactions of hot wallets.

Ledger Nano S, Ledger nano X, Trevor, Keepkey, etc are all examples of hardware wallets.

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Software Wallet

A software wallet is a computer program designed to secure your cryptocurrency while allowing only you to access it.

Software wallets are usually hot wallets (i.e they are connected to the internet). A software wallet can be installed in a system. In the case of a web wallet, all you need to do is to set up your wallet on the browser and the server handles the rest.

Examples are Tronlink Pro, Trust wallet, Armory, Coinbase, etc.

The first question;

1. Have you ever used a Hardware/software wallet? Which one is having a better security advantage?

Yes, I have used a software wallet. I have used Trust wallet and Tronlink Pro. Through my studies, I believe the hardware wallet is more secure than the software wallet. This is because the hardware wallet stores private keys on a hardware device, so your keys can never be left on any site. Software wallets offer the opportunity for users to be in control of their keys. These keys can be compromised by fault of the user if sent or shared mistakenly to the public.

Second question;

2. What are the important points to consider when you deal with an Exchange(centralized) Wallet & Decentralized wallet. How do you secure/restore both types?

Important Points to consider when using Exchange(centralized) Wallet

Central exchanges are owned and operated by a central third-party that maintains ultimate authority over the exchange, account, wallet, and transactions.
Those using centralized wallets and exchanges often do not have access to the private keys of their exchange account’s wallets, putting them at risk of foul play by the centralized third-party.
Centralized exchange wallets are user-friendly and offer ease of use.
Expensive fees
Easy exchange of fiat to crypto
Better customer support
Lack of privacy

How to Secure Exchange (Centralized) Wallet

Centralized wallets can be secured by using two-factor authentication.
Backup recovery phase
Secure emails and passwords

How to Restore Exchange (Centralized) Wallet
The benefit of Centralized Wallet is that if you lose your password, your assets are still safe. Account can be recovered through verification of identity and email and if you have a backup of 2FA code or the 12-word backup recovery phrase.

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Important Points to consider when dealing with a Decentralized Wallet

Unrestricted access to funds
Good privacy
High security
Almost non-existent customer service
Low liquidity level
Security depends on your third-party software and services
Unknown internal mechanics

How to Secure Decentralized Wallet
Decentralized Wallet offers the opportunity for users to be in possession of their own keys. It is the full responsibility of the wallet holder to secure the private keys of the wallet. Back up the 12-word backup recovery phrase.

How to Restore Decentralized Wallet
A decentralized wallet can easily be recovered with the private keys. The availability of the keys ensures access to the wallet. For this reason, private keys should be properly secured and backed up.

Third question

3. Give an example of a Web 3.0 wallet and what are the distinct uses of a web 3.0 wallet? Have you ever used any Web 3.0 crypto Wallet? Examples?

Web 3.0 wallet: Web 3.0 wallet provides a control over the coins listed on the blockchain and it allows access to Dapps.

An example of a web 3.0 wallet is Tronlink Pro.

Uses of web 3.0 wallet

It offers interaction with Dapps.
Full control of assets by owner.

I am currently using Tronlink Pro because Steemit offers the chance to also receive rewards as Tron. I am yet to explore the Dapps available in the wallet. As I advance in my crypto knowledge I'll ensure to explore the Dapps and utilize them for my benefits.

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Cc:-
@sapwood
@steemitblog
@steemcurator01
@steemcurator02
@booming02
@whitestallion

Thank you for attending the lecture in Steemit-Crypto-Academy & doing the homework task-3.

The benefit of Centralized Wallet is that if you lose your password, your assets are still safe. Account can be recovered through verification of identity and email and if you have a backup of 2FA code or the 12-word backup recovery phrase.

In the case of an Exchange wallet, it does not give access to the private key/seed key of the coins. You gain access to such a wallet using Login credentials (EMail/OTP/2FA). So you need to make sure that you are in good standing with your registered Email, registered Mobile Number, and 2FA backup code.

In the case of a decentralized wallet, you need to make sure that you have created an off-line backup for your private key/Mnemonic keys. Here only your private key can recover your asset.

I am currently using Tronlink Pro because Steemit offers the chance to also receive rewards as Tron. I am yet to explore the Dapps available in the wallet. As I advance in my crypto knowledge I'll ensure to explore the Dapps and utilize them for my benefits.

All the users in Steem Blockchain are now earning extra rewards in TRX for every SP earned. So you are all familiar with TRX rewards. So you might have used TronLink Wallet also. That is an ideal example of a web 3.0 wallet. It is seamlessly integrated with dApps, the interaction with such a dApp is powered by Smart contract. When you interact with any such dApp, it will prompt you to sign a transaction. At any given time you remain in absolute control.

Thank you.

Homework Task -3
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Crypto Academy Week 3 Homework Post for || Blockchain Wallet- Chapter-3 || [@sapwood]steemCreated with Sketch.