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Basic instructions on how to use Ethereum without custody

May 28, 2020

There are an apparently innumerable number of purses not only for Bitcoin, but also for Ethereum (ETH) New portfolios have appeared on the market in recent years.

Ether is a decentralized digital currency, also called ETH. In addition to a tradable cryptocurrency, Ether powers the Ethereum network by paying transaction fees and IT servicesEther paves the way for a smarter financial platform.

Before we can receive ether, we need a location. In the world of cryptocurrencies, this place is referred to as a wallet or even as a wallet.

Basic instructions on how to use Ethereum without custodyBasic instructions on how to use Ethereum without custody

In particular, Ethereum wallets do not work like traditional physical wallets. In fact, our ethers are not kept in our wallet or anywhere else.

Like any other cryptocurrency, ether doesn’t exist in tangible form. All that exists are records in the blockchain, and our wallet only interacts with the blockchain to enable the transactions we want to do on that network.

Some of the portfolios differ significantly in terms of features and security. Each type of portfolio has specific advantages and disadvantages. It can be particularly difficult for beginners to keep track of the amount and variety.

For this reason, you should above all know that it is important to understand what distinguishes the different Ethereum portfolios before introducing the individual portfolios.. The most basic distinction is the distinction between one: cold storage and hot wallet.

The specialty is the internet connection. While cold storage is not connected to the Internet, hot wallets have a permanent connection. This makes cold purses a lot safer than hot purses. The reason is obvious. While hot wallets can be attacked by hackers over the Internet connection, cold storage has no point of attack.

MyEtherWallet

In this context, creating your own wallet is relatively easy, especially since the Ethereum platform provides an official wallet service called MyEtherWallet.

Here we quickly explain how to configure it. The MyEtherWallet (MEW) is a user interface for accessing the Ethereum blockchain and sending transactions. MEW was released back in July 2015 and is valued in the cryptocurrency community, especially by developers, for its ability to create distributed applications (dApps).

MEW is also very popular with ETH investors. It is the most widely used ether portfolio (ETH).

How do I create my own wallet?

As soon as we are on the website, we are greeted by various security reminders. We need to take the time to read and analyze them as they are very helpful in gaining a better understanding of how it works and what we should and shouldn’t do to protect our funds.

Once we’re done reading We’ll find an option to create a password and configure a new wallet. Once we’ve created a sufficiently secure password, we can download the file that stores the wallet’s private keys.

Given the uncertainty in the cryptocurrency world, it is recommended that this file be kept in a safe place.

The next step is extremely important: save our private key. We need to make a backup, memorize it, write it on a piece of paper and put it in a safe. All we can do to make sure we don’t lose it and nobody can access it.

Then we can copy and paste our private key or upload the key storage file to unlock our wallet. There are several other options to unlock it, but these are best suited for new users.

Now everything is done. The next time we want to access our wallet, all we have to do is authorize ourselves with our keys on the website. There we can see the public address of our wallet to get ether and the balance we have in it.

The guide above focuses on setting up your own and possibly the most commonly used proprietary ether wallet on the market. However, there are different wallets, although they all have slightly different installation processes.

A great advantage of MEW is that no special technology or software is required to use the wallet. After the first versions of MyEtherWallet were technically sophisticated, the user interface has become very clear and intuitive over the years. Users can easily send and receive Ether (ETH) and all ERC20 tokens, check the balance and access smart contracts.

In addition, users have several options to choose from to access their ether addresses: MEWConnect (mobile version for the smartphone) via the hardware portfolio (e.g. Ledger, Trezor, Keepkey, Digital Bitbox etc.) and the Metamask and Software extension.

MEW has also partnered with various companies to enable users to exchange their ether for other cryptocurrencies. These include Bity, Kyber Network, Changelly and Simplex, so users can switch Fiat to Crypto, ETH and BTC, ETH and ERC-20.

And last but not least, MEW offers an interface to the well-known Ledger and Trezor hardware wallets, which eliminates the security gaps of web-based wallets.

Although MyEtherWallet can be accessed over the Internet, private keys and transaction data are not stored on external servers, but only on the user’s computer.

MetaMask

Now Metamask is a hot wallet from Ethereum that can be installed via the browser extension for Google Chrome, Firefox, Opera and Brave and that it already has over a million active users.

The browser extension is an important part of the Ethereum ecosystem for accessing decentralized applications (dApps) via a web browser and executing transactions within dApps by storing private keys. With this functionality, MetaMask is central to the Ethereum dApp ecosystem.

It is important to know that the MetaMask wallet stores private keys locally in the user’s own browser and not on external servers. This gives the user full control.

However, access to the browser also has a disadvantage: Although neither MetaMask nor the browser have access to confidential information, browsers such as Google Chrome can collect information about usage behavior, when and how MetaMask is used. Like many other wallets, MetaMask offers an integrated solution for buying cryptocurrencies. MetaMask users can choose Coinbase and ShapeShift to buy Ether or ERC20 tokens.

Fortmatic

This wallet is a user-friendly alternative for Web3.0 calls. Allows users to use a phone number or email address to connect to Ethereum-based applicationswithout the need for a browser extension like Metamask.

The company, which was founded in 2018 by the former product leader of the Linux-based application development company Docker, was able to attract public attention, according to ETHDenver, when it was used to invite all participants with DAI Pay for Your Food.

The wallet uses cryptographic anchors from the hardware security module «HSM», a security mechanism used by many of the key storage solutions in the industry. It is used by some notable projects like Airswap, Bancor, OpenSea and others.

Simply use a compatible decentralized application, select the Fortmatic wallet, enter your email address or telephone number and encrypt your account.

This way, you can use the wallet to interact with compatible Ethereum applications without installing software or browser extensions.

Auethereum

This wallet allows you to interact similarly to the previous wallet, only with a username and passwordwithout having to install software or backups.

By signing smart contracts on Ethereum’s blockchain, users can control funds at any timewith the advantage that the DAI token is used as fee payment for the interaction with decentralized applications on the web3.

One of the big advantages is the model of sustainable free transactions that drives the team behind its development. for its strategic partners such as ErasureBay and OpenSea on these transactions with less than 750,000 gas.

Jaxx

This wallet does not store private keys on its servers, but on the device selected by the user. It offers cross-platform functions and can be connected to everyone. This means that the same credit and wallets are available when using another device.

It integrated ShapeShift and Changelly, This is a huge advantage due to the high popularity of cryptocurrency business sites in the ecosystem.

It offers more than 85 cryptocurrencies at the same time along with Ethereum and Ethereum Classic.

The wallet uses industry standard processes for generating and deriving wallet data to generate the 12-word mnemonic using the BIP39 library.

Its options include a browser extension and a mobile and desktop version.

Hardware wallets from Ethereum

For its part, there are also hardware wallets. These have the highest security standards compared to all other purses. The private key of an Ethereum hardware wallet does not contact the Internet. This is saved in the hardware portfolio. An operation can only be released via the physical device. This effectively protects hardware wallets from phishing attacks and other types of malware. Theft of your Ethereum (ETH) from the hardware portfolio is almost impossible.

Mobile wallets

There are also the well-known mobile wallets. They are examples of thin clients because you don’t need to download the blockchain to use them. In contrast to full node wallets, they rely on precise data on the real-time status of the blockchain.

Mobile wallets can be accessed from any mobile device at any time until you have an internet connection. The disadvantage of mobile wallets is that they are vulnerable to attack.

How do you sell ether?

Once you have a few ether in your possession, you will probably want to trade it. Selling ether on a stock exchange works much like buying ether.

Peer trading

LocalCrpytos is essentially a marketplace where users can place and respond to offers. They also have a messaging service that allows users to set up a personal meeting to exchange ether for cash.

Alternatively, we can use services such as MeetUp, where we can find a local Ethereum or cryptocurrency meeting in general, where we can sell our ether in a secure environment.

However, it is important to remember that with a peer-to-peer option, we will be dealing with individuals rather than companies, which means that the chances of our business going bad are significantly greater. We need to take this into account and take precautions, especially when we meet strangers online.

Protect transactions

The programmability of Ethereum makes it one of the most wanted blockchains currently available. Maintaining privacy in transactions therefore becomes a major problem.

With this in mind, there are some data protection solutions like Bitcoinmix. It is an encryption glass that you can use to maintain your anonymity in the blockchain. Bitcoinmix mixes your digital currencies so that you don’t leave any traces of your identity in the blockchain. This is useful when doing transactions with Ethereum.

There’s also Hopper’s mixer, just like Bitcoinmix.org, but it works a little differently. With the smart contract for open source mixers, Ethereum blockchain users can make their transactions more private using an iOS device.

It is advisable to ensure that your privacy remains intact at Ethereum. Fortunately, you can choose from several options to maintain anonymity and protect your digital assets. This also includes ShapeShift.

With the Swiss platform, which is available both on mobile devices and on the Internet, you can exchange cryptocurrencies such as Bitcoin, Ethereum and some important altcoins.

The great advantage of the platform is that it does not collect user money on company accounts and does not require registration or personal data of the user.