One of the things to get when investing in cryptocurrency is a crypto wallet, but then there’s a variety of crypto wallets you can choose from.
Here’s an overview of the different kinds of cryptocurrency wallets you can use to store your digital assets.
A paper wallet is what it sounds like- a physical ledger that contains the information to make or receive a transaction transfer.
Generally speaking, a crypto wallet doesn’t really store the Bitcoin or crypto, but rather it keeps the ‘keys’ or the account number to the funds.
So a paper wallet is a paper storage that will have your private and public keys on it. The best way is to print the keys and keep it in a safe place.
It’s considered one of the safest storage solutions for cryptocurrencies. It’s hack-proof and no one will be able to steal it unless they come to your house and take it from you.
A hardware wallet is a physical storage device that keeps public and private keys.
You only access the hardware wallet when you need to make a transaction, such as when trading in a crypto exchange to earn a profit.
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An online wallet is perhaps the most convenient form of crypto wallet available. You should have no problems sending ‘coins to another person, store or website as the need dictates.
The ‘web’ wallet can be a built-in app, API or integration. However, you do not fully control it, as web owners are the ones who have implemented it. The private and public keys are stored in the company’s server, and thus can be hacked by an unscrupulous individual.
That said, it’s best to only put the necessary amount in an online wallet so you minimize your loss should a security breach occur.
Desktop or Mobile Wallet
A desktop or mobile wallet is a device-specific Bitcoin storage solution. It’s downloaded and stays paired to the device until you change or remove it.
You can put in some forms of protection, such as anti-malware or antivirus apps and programs, or disconnect from the internet or Wi-Fi so it acts like a cold wallet.
A mobile or desktop wallet isn’t easily hacked, but remember that they can access it when they have your smartphone or look into your desktop or laptop computer. The public and private keys can be taken and used at a later time.
Crypto wallets are not infallible, which means they can be hacked or accessed in specific situations. For a paper wallet, it can be stolen, while a web wallet can be hacked into.
It’s recommended to store most of your Bitcoin or cryptocurrency in more than one crypto wallet, e.g., a paper, mobile and online will work to serve all your cryptocurrency transactions needs while having several layers of security.