Different Types of Crypto Wallets and Their Use




There are many different types of crypto wallets to choose from, each with its own pros and cons. It can be hard to choose the right wallet for you and your needs, especially if you aren't familiar with the differences between the types of wallets on offer.

In this article, we'll help you understand how different types of wallets work and what makes them unique. By learning about the crypto wallets on offer, you'll make sure you have someplace safe to store your coins the next time you buy cryptocurrency.

Source: https://unsplash.com/photos/1C37UztDU8s 

Desktop wallets

Desktop wallets are software programs that are installed on your computer. They can be used to send and receive cryptocurrency (online) or just as a way to store it (no internet connection required).

Desktop wallets offer a greater level of security than web or mobile wallets because they don’t rely on an external server. However, they are not as secure as hardware wallets because there is always the possibility that someone could hack your computer and steal your private keys (which would enable them to access all of your funds).

Web wallets

Web wallets are one of the most popular types of crypto wallets. They are hosted by a third party (most often a crypto exchange) and allow users to access their wallet from any device with an internet connection.

Because web wallets are hosted by a third party, they can be convenient and easy to use; this makes them popular with newcomers to the cryptocurrency world. However, they often lack the security measures needed for storing large amounts of cryptocurrency or other sensitive information.

Most web wallets are free to use—but in exchange for convenience, you give up some control over your funds because these services have access to your private keys (the cryptographic codes that allow you to send cryptocurrency).

Hardware wallets

Source: https://unsplash.com/photos/Grk4L0ZJeAU 

Hardware wallets are the most secure type of wallet. They're like your own personal Fort Knox; they store your private keys offline and can be connected to an internet-connected computer only when you want to access them. They're pretty similar to USB drives, so using them shouldn't be too tricky for beginners.

Hardware wallets are a good choice if you need to store large amounts of cryptocurrency or plan on using your funds often. The only downside is that hardware wallets can be expensive, ranging from $50–$500, depending on the model. However, they are relatively easy to find and are readily available in many electronics retailers.

Paper wallets

Paper wallets are a form of cold storage, which means they're stored offline. If you've heard the term "paper gold," it's a similar idea—the coins are in your possession but not on your computer, making it harder for hackers to access them.

They're pretty basic and are just what the name sounds like - literally a piece of paper with your private keys written or printed onto them.

One drawback is that if you misplace your paper wallet, there's no way for you to get your funds back. Paper wallets can be destroyed, so you'll need to make sure you have a really safe place to store them if you go down this route.

Mobile wallets

A mobile wallet is an app that allows you to store your cryptocurrency on your smartphone, and almost everyone these days has access to one of those.

Mobile wallets are convenient because they are always with you and allow users to spend their cryptocurrency wherever they go. Sending and receiving payments at the touch of a button is entirely possible, unlike with paper wallets.

However, they can also be risky due to the fact that they are connected directly to your phone. If someone gets access to your phone, they could potentially steal your coins as well as any private keys associated with them. If you go down this route, make sure to set a secure password and 2FA if possible, and never leave your phone lying around where it could be vulnerable to theft!

If you're already on your third phone this year because you keep losing or breaking them, a mobile wallet perhaps isn't the best way to store your Bitcoin.

Wrapping Up

Source: https://unsplash.com/photos/aFdTdWYXFd0 

There are different types of crypto wallets, and they all have their own set of pros and cons. It's important that you choose the right one for your needs; hopefully, our explanations above will help you find out which type is best for you.