CRYPTO

The Different Types Of Cryptocurrency Wallets

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When it comes to cryptocurrency wallets, there are a number of types that you can use.  It is important that you know what these wallets are as well as what they have to offer.  There are three primary categories that these wallets can be divided into and they are software, hardware, and paper. 

Software Wallets

Within the category of software wallets, there are 3 types.  The first is the desktop wallet which is a piece of software that is downloaded onto your computer.  This wallet is accessible from one computer only and offers very good security.  However, if your computer is hacked or infected with a virus, you could lose your funds.  

The next type of software wallet is the online wallet.  As the name suggests, these wallets are run in the cloud and accessible from any device with an internet connection.  They are the most convenient to use, but they are also the most vulnerable.  This is due to their internet connection and the fact that they are controlled by third parties.

The last type of software wallet is the mobile wallet.  This will be an app on your mobile device which can be used anywhere.  These wallets are the simplest and smaller than desktop ones because of the limited space on the mobile device. 

Hardware Wallets

Hardware wallets are physical devices that are used to store private keys and will generally be a USB style device.  While the wallet itself is not connected to the internet, you can still use them to complete online transactions.  The offline storage of the keys will actually make these wallets among the most secure.  

These wallets will be compatible with a number of web interfaces and will support different currencies.  To use them, you simply have to plug the wallet into your computer, enter a pin, send your currency and confirm the transaction.  Keeping your currency offline will keep it away from danger which is a major benefit of these types of wallets. 

Paper Wallets

Another wallet that offers high levels of security will be the paper wallet.  They are very easy to use, but there are some issues that you need to be aware of.  A paper wallet is not an actual wallet but a term which refers to the process of printing out a physical copy of your private and public keys.  It will also refer to the software used to securely generate a pair of keys which are printed.  

When you want to use your paper wallet, you will need to transfer currency from the software wallet to the public key of your paper wallet.  To withdraw the money, you will need to transfer the currency from your paper wallet to the software wallet.  This is a process known as sweeping and could be done through the manual entering of the private keys or through scanning the QR code on the paper wallet.  

There are a number of different types of cryptocurrency wallets that you can use and you need to know about them.  Some of these wallets are more secure than others and you need to be aware of this.  Security is vital if you want to ensure that your currency is safe.