If you hold money, you need a wallet to put them safely. Since cryptocurrencies are digital, they require a digital wallet. Today, there are many different types of crypto wallets that you can use. Each type is designed specifically for a set purpose. If you are not sure what kind of a wallet you want, let us guide you.
First, you need to understand different types of wallets:
- Hot Wallets: Broadly speaking, any kind of a crypto wallet that stores its keys online is referred to as a hot wallet. These types of wallets are the most used. Different wallet providers support different platforms, such as PC, mobile and cloud. If you need to frequently send and receive coins, these types of wallets are the most preferred option.
- Cold Wallets: Also referred to as hardware wallets, these are physical in nature. Cold wallets don’t upload the keys to the provider servers, but keep them within the device, ensuring better security as there’s no server to breach and steal the private key.
- Paper Wallets: There are wallet providers that give the option of creating a wallet and don’t store the keys at all anywhere. Both public and private keys are generated in real time, using randomizer algorithms. The wallet user is then given the option to download the data in a printable document containing the keys, hence the name.
What Wallet is Suitable for my Coins?
It all boils down to what your use is. Mobility, frequency of access, the value of coins stored and type are the key factors here.
If you use your PC or laptop, a PC based wallet is the best option. In case you need to have the wallet on you at all times, look for a mobile based option. There are wallet providers that offer multi-platform support so that is something you should consider if you want to access from both sides. The downside is vulnerability as phishing, malwares and hacks can compromise your keys.
Paper wallets offer good security, but paper is paper and it can get damaged, lost or stolen. So only use this option if you can keep it safe and don’t frequently access your wallet.
Cold wallets offer the most robust security but are expensive. Depending upon the amount of coins you want to hold, this can be feasible or too expensive.