Are you planning to invest in bitcoins?
If yes, then you should store all your cryptocurrency like bitcoin or ethereum in the crypto wallet because a crypto wallet is highly secure in storing your coins as compared to keeping them on crypto exchanges.
If you are a new crypto investor, you might be confused about which crypto wallet is good for you, then go through this article. You would be able to learn about top 4 crypto wallets and what makes them different from each other. Going through the range of wallets mentioned below will surely help you make an informed decision.
4 Types of Crypto Wallets
#1. Desktop Wallet
Desktop wallet is a software application that stores your bitcoin keys and public address on your desktop or laptop. Since the data is stored on your system, that is more secure than web wallets or keeping them in exchanges.
Desktop wallets are secure and highly encrypted, coming after cold wallets in the terms of safety and security of stored bitcoins.
However, having an antivirus system is a must to protect your computer from malware attacks that may be risky while doing online bitcoin transactions.
If required, you can refer to the information on this website crypto genius to get a better insight into it.
#2. Mobile Wallet
Mobile wallets are a miniature version of desktop wallets. Mobile wallets are ideal for bitcoin owners who want to have access to their coins from smartphones. Mobile wallets are very convenient to access by simply installing an application on the phone.
In a mobile wallet, you get a QR code that you can share to receive bitcoins and similarly, you can scan other’s QR code for sending bitcoins.
The mobile wallets are fully encrypted but your smartphone is highly prone to malicious attacks, which is the reason you should be fully careful about your mobile’s security by updating your smartphone operating system or using an antivirus.
#3. Hot Wallet
Hot wallets or web wallets are online wallets that you can access through any web browser like google chrome.
You have to sign up to an online exchange or wallet platform like CoinDCX exchange to get access to your web wallet. It is like signing up with PayPal for an online wallet. CoinDCX stores 95% of cryptocurrency in cold wallets and the rest 5% in hot wallets. You can read CoinDCX exchange review for more details.
Web wallets are not secure because online platforms don’t give you access to your private keys, that means in case the whole platform got hacked, or if the company shut down the services, you have no access to your funds anymore.
If you are a newcomer who is investing a small amount in bitcoins can consider this wallet for temporary use as a quick transaction or crypto trading.
#4. Cold Wallet
Cold wallets are offline wallets which makes them a fully secured type of bitcoin wallet. The bitcoin owner has full fledge control over his bitcoins with a cold wallet.
The bitcoin owners who want to invest for the long term can choose the same. The significant advantage of choosing the cold wallet is its hack resistant nature because of offline storage.
Cold wallets are of two types – Hardware wallet and paper wallet.
A. Hardware Wallet
The hardware wallets are basically a physical device that stores your private keys and public addresses. Some of the wallets are equipped with an OLED screen and side buttons that can be used to operate the wallet.
You need to connect the hardware device to the computer system. You can connect the device with a USB port (hardware wallet looks like a pen drive) and you need to install an application on your laptop or mac for operating the wallet.
The key reason for the tremendous popularity of the hardware wallet is top-notch security. Means, it does not have any possibility of getting hacked.
Hardware wallets are ideal for professional crypto investors who either want to invest large amounts of funds or they want to keep bitcoins for a long time.
B. Paper Wallet
Paper wallet is purely a cold wallet because you printed the private keys and QR code on a piece of paper and it has nothing to do with the internet.
The paper wallet has only one drawback if you lose the paper or the ink fades with the passage of time. It’s better to laminate the paper and keep it safe in the chest.
Keeping your bitcoins with online exchanges can be a severe risk. It’s better to keep only coins required for trading in the exchanges and the rest of your bitcoins in a wallet.
Which bitcoin wallet type is your favorite, please let me know in the comments.