Cryptocurrency is virtual money and as such, it cannot be stored under similar storage conditions as conventional money, this necessitated the creation of a storage system unique to cryptocurrency, this storage system is called a wallet.
A cryptocurrency wallet is fundamentally a storage system for cryptocurrency with the necessary tools to support withdrawals and deposits of funds, just like a regular bank account. A typical cryptocurrency wallet comprises two components – the public key and the private key.
The public key is like a bank account number to the wallet. It is available to all users on the network and every transaction that involves sending funds to another user is completed using the recipient’s public key.
The private key on the other hand is more like a secret password that authenticates a user and grants them access to the funds in their wallet. The user is expected to keep the private key confidential and secured. If the private key is compromised, then the funds in the wallet associated with that private key are vulnerable to theft. Fundamentally, a user receives funds from others through the public key and sends money to other users via the private key.
There are 5 main types of wallet; web wallets, desktop wallets, mobile wallets, paper wallets and hardware wallets. Each type of wallet is however not without its own complexities, benefits and drawbacks. This article will focus on a web-based wallet known as MyEtherWallet.
What is MyEtherWallet (MEW)?
MyEtherWallet is a type of web-based wallet for storing and managing cryptocurrency. It is often abbreviated to MEW. MyEtherWallet provides a free, open source and user friendly interface for managing Ethereum and other ERC-20 compliant tokens. Like other web based wallets, MEW can be accessed from any browser - Firefox, Chrome, Internet Explorer etc., however, unlike several other web browsers, the wallet is not hosted on a server.
One of the major disadvantages of web wallets is the fact that the private keys are hosted on a server by a third party and beyond the control of the user. If the site hacked or closed down, assets and holdings in that particular wallet are automatically lost to the user. MyEtherWallet, however does not function like a conventional web based wallet. Here, the browser is used to generate the required data and nothing is stored on the server. In effect MEW can neither hold keys, recover keys, access accounts, reset passwords, nor reverse transactions.
MyEtherWallet can hold Ethereum and ERC-20 tokens (tokens are based on the Ethereum blockchain). Putting into consideration the fact that several of the new cryptocurrencies now springing up are ERC-20 compliant and accept Ethereum as a means of payment in their ICOs (Initial Coin Offering), getting an Ethereum compatible wallet is virtually a necessity. MyEtherWallet remains the most efficient Ethereum based wallet and below is a step by step guide on how to step up a MEW wallet. If you havent own any ether and are looking to get some, check out the post by VanillaCrypto which showed you a couple ways to get ether before sending it to MEW.
How to set up a MyEtherWallet wallet
Step 1: Access the MyEtherWallet client
- It is important to ensure that the site is the original and authentic site.
- There are various cases of phishing sites masquerading as the real site in a bid to defraud unsuspecting users of sensitive information and assets.
- Users should always check for the 'MYETHERWALLET LLC [US]' certificate on the URL bar present on the original site.
- Nevertheless, it is most recommended to bookmark the site so you don't fall prey to the scams.
Step 2: Create a MyEtherWallet wallet
- The front page of the site features an input field underneath 'Create New Account'.
- To create a wallet, a user is expected to enter a secure password into the provided textbox then click the 'Create New Account' button.
- Remember, the longer and more random the characters of a password is, the better.
Step 3: Save your Keystore file
- After creating a wallet, the next page has a 'Download Keystore file' button with several instructions underneath it.
- Click on the button to download the Keystone file usually available in UTC/JSON format.
- A keystore file can be used to recover your wallet, however, the file on its own can not be recovered if lost.
- Hence, once the file downloaded, adhere to the instructions given; make a back up file preferably in an offline storage, keep it away from phishing sites and never share the file.
- Afterwards, click on the 'I Understand. Continue' button to proceed.
Step 4: Save your private key
- The next page displays your private key. The site provides two options on how to save your private key.
- Click on 'Print Paper Wallet' to have your private key printed out as a paper wallet.
- Click on 'Save private key' and save with it with the keystore file.
- Whatever you do, always ensure that your private key is protected and secured at all time.
Step 5: Unlock your wallet
- To access and manage your account, you would first of all have to unlock it.
- From the menu bar on the, select 'Ether & Tokens', this will bring up a variety of options through which one can access their MEW wallet but it is recommended to choose the Keystore file option.
- On selecting the file, you will be required to enter the password you used in creating the account (the one in used Step 2).
- Enter the password to unlock your MyEtherWallet account.
Step 6: Send Your ERC20 Token
- Navigate to the "Send Ether & Tokens" Tab
- Repeat step 5 and you will be taken to the screen as displayed above.
- Here you can enter receiving address, the amount of ETH you would like to send as well as the gas limit.
Step 6 : Access Your ERC20 Token
Step 7: Add Custom Token
MyEtherWallet provides a user-friendly and easy to navigate interface for users. With a MEW wallet, users can send and receive funds, check their account balance, view their transaction history, participate in ICOs, manage other ERC-20 tokens and even add new ones yet to be supported on the platform. Additionally, users can also save both their private and public keys in form of QR codes. Even so, having and managing a MEW wallet is not enough, you can take additional measures to encrypt and further secure your Keystore file and private key, and do not forget to create a back up for all everything.