Be it for trading in cryptocurrency or merely saving crypto in the crypto wallet for investment purposes, you will surely require a cryptocurrency wallet. Since there are so many options, you may find yourself totally confused when choosing a cryptocurrency wallet, more so if you are a new entrant in the crypto world. Discussed below are a few major aspects that you must know as far as crypto wallets are concerned.
What are crypto wallets?
Before we proceed to anything else, you must clarify the concept of atomic wallet in your mind. Although crypto wallets are similar to traditional wallets, they do not precisely store your crypto assets.
You must already be aware that cryptocurrencies are decentralized. As such, they are not stored in any one particular location; instead, they are recorded and stored on the blockchain in the form of transactions.
Basically, crypto wallets are software programs that are meant for storing your private and public keys. You can think of them just like the bank accounts. They enable you to keep track of your balance and carry out transactions, all of it only from one place.
What are the different types of crypto wallets?
You can easily download and install desktop wallets on your system, no matter which operating system it functions on. If you compare crypto wallets, you find that these wallets are highly secured as against the others since you can only access them through your system. However, since our systems are always connected to the Internet, you must not assume that your keys cannot get stolen.
These wallets operate on the cloud, which makes everything a little less complicated since you can access these wallets from any part of the world. As long as you have access to the Internet connection, you will be able to access online wallets. However, this online storage of keys poses a lot of risks. Your keys will be exposed to malicious attacks.
These are very much similar to desktop wallets are meant to be run on your smartphone. Mobile phones constitute a significant part of our everyday life, and this is why many people find mobile wallets to be the most convenient. Another benefit is that your keys will remain safe on your phone. However, there is still an element of threat because of security issues in most platforms.
If you plan on storing crypto assets for a considerable duration, then hardware wallets are the best alternative out there as far as the security aspect is concerned. Contrary to software wallets, the keys will be stored on a hardware device. The best part is that most of them are designed in such a manner that they remain safe even when connected to an infected system. The only significant drawback of this wallet is its price.
As the name suggests, paper wallets allow you to store your private and public keys on print, usually via QR codes. But it does not necessarily have to be paper. You can even print them on plastic, just like a credit card. Although this may sound strange, it is a better option to store your private keys in this manner. To use the currency, you will have to first move it to a software wallet, referred to as ‘sweeping’. The only thing that you need to take care of is that the wallet does not get stolen or lost.
Now that you are aware of the different types of crypto wallets out there, we are sure you will not have to face any hassles when choosing a cryptocurrency wallet. Consider your unique requirement when choosing the wallet to be able to make the right purchase.