With the increase in popularity, awareness and the rise of new tokens or coins, crypto wallets are advised to be carefully chosen to secure your crypto assets.
In this article, your understanding will be enlightened, so you can make informed decisions.
You may want to ask, what is Cryptocurrency Wallet?
A Cryptocurrency Wallet is a medium or tool used to secure, save, store, transact and manage various cryptocurrencies.
This type of cryptocurrency wallet is different from traditional wallet, where you store or keep physical material money, rather it gives you access and control over your owned digital assets.
Public & Private Keys
A pair of cryptographic keys: a Public key and a Private key, are being used by cryptocurrency wallets to make each key unique for a particular user account.
A public key is synonymous with a bank account number, where some cryptocurrency token can be sent.
The Private key is also known as passphrases, very important to safeguard your wallet.
Private key is given to you to help you secure, manage and have access to your assets or funds.
This passphrase or private key is sometimes 24 words, serially written, securing these keywords is very crucial to keeping your wallet.
The Main Types of Crypto Wallets
Each wallet has its unique peculiarity, as such, some advantages and disadvantages come with your preferred chosen wallet.
Hardware Wallets
These are tools, devices or gadgets used in storing your unique private key offline for use.
It is one of the best means of securing your privacy from being hacked.
Software Wallet
Software wallets are applications installed either on desktops or mobile phones. Let’s further categorise it:
Desktop Wallet: Programs or applications installed on your system to provide maximum security to your private keys, give access and manage your assets. E.g., Exodus.
Mobile Wallet: Wallets are downloaded and installed either on Play Store for Android or App Store for iPhones, offering convenient and on-the-go access anytime.
Web Wallet: This is accessible on the web browser, it’s highly vulnerable to attack and can be hacked but easy to navigate and use.
Paper Wallet: Like the QR code, it contains both public and private keys. This is like your physical documents containing this information.
When properly stored it can provide high security, but its disadvantage is that it is less convenient for quick exchanges or transactions.
How to Choose the Right Crypto Wallet
Hot Wallet: Always on the device connected to the Internet. These are particularly free for use and aid add-on services like trading for fees.
It’s vulnerable to hackers who would want to hack into it, but makes it easier for transactions using crypto.
Cold Wallet: This is costly, you need a hardware device set up to secure and store your crypto assets.
This is offline, making it difficult for any other person to have access to it.
It is more difficult to reach and retrieve if the actual device is lost.
Conclusion
Choosing the right Crypto Wallet is very important. Each wallet has its unique advantages and disadvantages.
As such, having a clear intention of what you want in a wallet can help you to choose the best one that suits your needs.
Security of your private keys is a must watch out for, as it houses the passage to all your assets.
