When it comes to securing your crypto, they are only as safe as the wallet that you are storing them in.
There are a range of different crypto wallet types that are currently available. These differ according to the intended use, security, mobility and cost. Given this selection, it is essential that you know the exact differences between them and the relative pros and cons of each.
In this post, I will take a look at 5 types of cryptocurrency wallets. I will also look at the benefits and weaknesses of each and present you with the best options for your personal preferences. I will also finish off with some top crypto wallet security tips.
There are several types of wallets that can be used to store your cryptocurrencies. These are hardware, desktop, mobile, web, and paper. Each has its own strengths and weaknesses, and determining which to use will depend on what use you have in mind for the wallet and the cryptocurrency that will be stored there. Consider the following questions:
The answers to these questions and others will determine which type of crypto wallets will work best for you. Now let’s look more closely at each type of crypto wallet.
A hardware crypto wallet is somewhat unique because it stores the users public and private keys on a physical device that is similar to a USB drive. Hardware wallets are more secure than most other wallet types because the cryptocurrencies are stored offline, keeping them inaccessible to hackers.
Hardware wallets can be used to store many different cryptocurrencies, which makes them very convenient. Using them is also easy. Users plug them into an internet-connected device like their home PC, enter a security PIN and then send the cryptocurrency and confirm. Hardware wallets also include a physical confirmation on the device itself for added security.
Hardware wallet pros:
Hardware wallet cons:
Some of the more popular hardware wallets are the Ledger Nano S or Nano X, the Trezor Model T, and the KeepKey.
Desktop wallets can be a safe choice for storing your cryptocurrencies, especially if it’s run on an offline computer, or one which you know is free of any malware or viruses. Desktop wallets are also usually some of the most prolific wallets and nearly every crypto coin will create their own “core” wallet version for it.
Of course, there is a trade-off and desktop wallets can be susceptible to hackers that target user’s private keys.
However, If you install a desktop wallet on a computer that’s never been connected to the internet it essentially becomes a cold wallet and is one of the most secure means for storing your cryptocurrency.
Desktop wallet pros:
Desktop wallet cons:
Some of the more popular desktop crypto wallets include the Exodus wallet, the Jaxx Liberty, and the Electrum wallet. You’ll also find that most cryptocurrencies have their own native desktop wallet, which is often the most secure choice for that coin.
A mobile crypto wallet is installed on a mobile device just like any other app. They make it convenient for spending crypto-funds on the go, just like ApplePay. You’ll find that some desktop and online wallets also have mobile versions, but other mobile wallets are only for mobile use.
Of course, this added convenience means that you lose some functionality that core desktop wallets usually come with.
For example, you cannot use your phone to earn staking rewards on Proof-of-Stake coins. You also cannot really use your mobile phone resources to mine coins which is something that can be done in the core wallets of numerous mineable cryptocurrencies.
Mobile wallet pros:
Mobile wallet cons:
Some popular mobile crypto wallets include Coinomi, Jaxx Liberty, Mycelium and the Coinbase mobile app.
Many people will tell you that these are the least secure type of crypto wallets, and they wouldn’t be completely wrong. And yet there are still good reasons for using a web wallet for small amounts of crypto-funds. One of these is that you can access your funds to send, receive and make payments from any device that has a browser and is connected to the internet.
The downside to that is you have to store your private keys on the servers of the web wallet provider. All of the popular web wallets provide encryption for your private keys, but the fact that they are still storing them on their servers makes the web wallet the least secure crypto wallet type.
Web wallet pros:
Web wallet cons:
There are a number of web wallets you can use, with some of the most popular including Green Address, MyEtherWallet, and blockchain.info. Note that the wallets provided by cryptocurrency exchanges are basically web wallets.
Paper wallets aren’t talked about that often, but they are very easy to use and give an excellent level of security. At its most basic a paper wallet is nothing more than a physical copy of your public and private keys. You can create one by writing them down yourself on a piece of paper.
There are also paper wallet generators that can create a pair of keys and print them, along with a QR code. Using a paper wallet is straightforward. To add funds to the wallet a transfer is made to the public address of the paper wallet. The wallet can then be kept in a cold storage environment which keeps it out of the hands of hackers.
And to spend the funds in the paper wallet you simply make a transfer from the paper wallet to another wallet using the private keys or by scanning the QR code.
Paper wallet pros:
Paper wallet cons:
One of the most popular paper wallet generators is WalletGenerator.net. It supports the creation of paper wallets for 197 different cryptocurrencies. If it doesn’t support a coin you can either create the paper wallet manually or Google for a wallet generator for that particular cryptocurrency.
Finding the best cryptocurrency wallet is actually only the first step when it comes to securing your coins. How you deal with your crypto and how you use your wallet is just as important. There are a number of things that you need to take into account for wallet security:
Cryptocurrency wallets are a big deal since they are so important when it comes to keeping your funds secure. They are also the only way most people will be able to send, receive and store cryptocurrencies. The type of wallet you use will depend on how you use cryptocurrencies.
Many people will find that they need several types of wallets. Maybe they have a hardware wallet for storing large amounts of cryptocurrencies, a desktop wallet for a smaller amount that they use for trading purposes, a mobile wallet for everyday use, and a web wallet at an exchange for ease of trading.
Each type of crypto wallet comes with its own pros and cons, and choosing the right one for you will depend on what use you have planned for it. Irrespective of which wallet you do decide to go for, make sure that you follow crypto wallet security 101.
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