Cryptocurrency wallet is a digital wallet where you can store, send, and receive cryptocurrencies. This digital wallet holds a secret key that is used to digitally mark all cryptocurrency transactions in a distributed ledger. This key is the only way to prove ownership of your cryptocurrency and to execute transactions. Having a crypto wallet is essential for being able to transact cryptocurrency.
Types of Crypto Wallet
There are many types of cryptocurrency wallets that can be used. Here are the different types of cryptocurrency wallets with their respective advantages.
Hardware Wallet is a hardware device created to store your private key and public address. Usually in the form of a USB with an OLED screen and side buttons for navigation on the screen. This object can make transactions online, although more often in offline conditions, this become one of the advantages of the Hardware Wallet. Hardware Wallet is the most expensive wallet because of its ease of sending and receiving cryptocurrency by simply connecting it to a computer that is connected to the internet.
Hardware wallet is often referred to as Cold Storage, because our private key is not stored in the online ecosystem, making this wallet not vulnerable to hacking so it is safer, this is also another advantage of Hardware wallet. The hardware wallet is often used by Crypto Hodlers to store some of their crypto assets. Examples of Hardware Wallet are Trezor and Ledger Nano.
Paper Wallet is a piece of paper where your private key and public address are printed. This wallet is not for everyone because owning a paper wallet requires a high level of caution in storing and using it. On the other hand, paper wallet is a safe alternative to storing cryptocurrency because of the tendency to be offline. Examples of paper wallet providers are BitAddress.org or BitcoinPaperWallet.com.
Desktop Wallet is a software that you can download and install to a computer and can only be accessed through a computer that has been installed with this wallet. Desktop wallets are also a safe alternative for storing and using cryptocurrency, a threat that might occur only if your computer is hacked, infected with a virus, or external damage. Some examples of desktop wallets are Mist, Exodus, Metamask, and many more.
Mobile Wallet is an application on smartphones that makes it easy for users to send and receive cryptocurrency. All you have to do is install the mobile wallet application to your mobile device and create an account in the application. This wallet is more secure than a web wallet because your risk of losing cryptocurrency is if your mobile device is damaged or experiencing a security breach. Some examples of mobile wallets that you can use are Trustwallet, Copay, Jaxxliberty, Mycelium, and many more.
The web wallet is called a hot wallet because this wallet is always connected to the internet and can be accessed through any browser. This makes the web wallet as a storage place for cryptocurrency that is not too secure because it is always connected to the internet which causes this wallet to be hacked through the internet network at any time.
Web Wallet is also divided into two types namely Hosted Wallet and Non-Hosted Wallet, where many tend to prefer non-hosted wallets because users can manage all their crypto assets. However, nowadays most of all trusted cryptocurrency platforms have provided a high level of security to prevent hacking and protect their customers’ wallet addresses on their platform.
Those are some types of crypto wallets available today. By knowing the advantages and disadvantages of each wallet you can determine which wallet is suited for your needs.
Also published on Medium.