Due to the vast and diverse decentralized applications, more and more individuals are using and investing in Ethereum. The ETH addresses are growing at a rapid rate. The Ethereum market cap has risen to a value of $12,086,020,888 USD, according to the latest estimates from CoinMarketCap. With the growing adoption of Ethereum, the use of Ethereum wallets has also seen a rise.
However, the details regarding the use of these wallets are still sketchy for many, leading to confusion regarding its use. Therefore, below is a step-by-step guide explaining the creation of the Ethereum wallet. Reading this, users can easily start developing their own wallets and transact in ETH.
The need of an Ethereum Wallet
Ethereum blockchain is used, for generating funds using an ICO. And for every ICO using the Ethereum blockchain, it is mandatory to use the ETH and Ethereum wallet. However, not every digital wallet can support the Ethereum based ICO token. For instance, for a user participating in the Fast Invest ICO, it’s important to set up an ERC 20 compatible Ethereum wallet. In such a wallet, only the user retains the private keys.
When users don’t use the Ethereum compatible wallets, they face a greater chance of losing their money.
ERC-20 Compatible Ethereum Wallet
Below are the Ethereum wallets which are most compatible to the ERC 20 tokens. For an updated list, users can also visit the Tokenmarket.
- Desktop Wallet: Mist and Parity
- Android and iPhone Wallet: imToken
- Chrome/Firefox browser extension: MetaMask
- Online Wallet: MyEtherWallet
Among all the above, MyEtherwallet is the one that is most convenient for users and supports smart contracts. Though it is an online Ethereum wallet, it even offers hardware and offline wallet support. Therefore, users can develop wallet keys for a plethora of Ethereum storage functions.
As a result, it is one of the most used Ethereum wallets, and this blog will focus on the creation of the same.
Initial steps in setting up an Ethereum Wallet
- For setting up the wallet, users first need to go to the official site of MyEtherWallet: https://www.myetherwallet.com/. Initially, many safety reminders and options for creating new wallets greet the user.
- The next step involves creating a password. Users need to make sure that the password is strong, yet easy to remember so that they don’t forget it. To make the password strong, one can make use of a combination of numbers, letters, as well as symbols. It is advisable to immediately write down the password and make copies to safeguard it for the future.
- Note:It’s important to understand, that this password alone isn’t sufficient for accessing the Ether in the Ethereum wallet. The function of the password is encrypting (protecting) the private key of the user. It doesn’t generate or act as a seed for the private key.
Downloading the Keystore File
- After creating a password, users need to click on “Create New Wallet.“
- The next step involves downloading the UTC/Keystore file and saving it in a secure location. For instance, one can store it on a secure USB drive. This is done for security reasons since this file is much safer than a private key which is unencrypted.
- The keystore file is the encrypted form of the private key of the user. For accessing it, users need the password. A warning from the site follows the creation of a keystore file. After reading and understanding it, users need to click on “I understand”, and then the “Continue” button.
- The string of symbols which appears next is the private key of the user. The security of the private key is of utmost importance. Therefore, one needs to use as many options for securing it as possible. Some of the methods include:
- Make a backup of the private key by printing it as a paper wallet.
- Hand-write the key carefully on a secure piece of paper. It is recommended that one writes the key 2-3 times in different places. Doing so would prevent any unforeseen circumstances, where the user can’t access one of the papers
- Note: Users should not confuse the MyEtherWallet with a web wallet. This site has no means of recovering the password/private key; accessing the user account; moving and recovering funds; nor can it cancel or reverse transactions. It is an interface from the client side, which enables the interaction of the User with the Ethereum blockchain. Therefore, once the password or private key is lost, there is no way to retrieve it.
Checking the Balance in the Ethereum Wallet
- After generating the private key, users can see their Ethereum wallet address.
- For checking the functionality of their wallets, users should copy & paste their wallet address into another text document.
- They should search their wallet address on the site: https://etherscan.io/.
- After bookmarking this page, users will be able to use this page and view their Ethereum wallet balance at any time.
- For verification purposes, users can send a very small value of Ether, like (0.0001 ETH) into the new Ethereum wallet. They can send this currency from a previous wallet or an Ethereum exchange.
Unlocking the Ethereum Wallet
- The users can now unlock their Ethereum wallet using various methods. However, one of the easiest ways involves the use of the keystore file or the private key.
- All one needs to do is select and then paste their private key. For unlocking with the Keystore file, the users need to upload the keystore/ UTC file.
- It is important to make sure that the particular wallet which opens is the one where the 0.0001 ETH was sent. The address of the wallet should match the bookmarked one.
- After unlocking and using the Ethereum wallet, users should immediately close it.
Rechecking the Functionality
- Users can again send a small Ether value, like (0.00001 ETH) from their new wallet to a different address. For instance, one can send it to the donation address of the MyEtherWallet.
- It is also crucial to make sure that every important bit of data and information matches each time. In case it doesn’t, it means that there has been a mistake in writing or entering somewhere. In such scenarios, it is recommended to start completely from the beginning to avoid losing access to the funds.
- If they don’t, you made an error something somewhere. That means it’s time to start from the beginning in order to make sure you never lose access to your funds.
The creation of an Ethereum wallet, be it on the web or any other platform is not a difficult process. However, it is mandatory that the user checks and rechecks the information and address with every step. Doing so makes the process tedious, but eliminates the potential for any future mishaps.
For instance, when all information matches, one can be assured that they would never lose access to their wallet. Nor would they lose their ETH due to a silly mistake.
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