visibility_off 5 Types of Cryptocurrency Wallets Explained
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With the increasing popularity of cryptocurrency and its growing market cap, people are now more concerned on how to keep their crypto investments safe.
There are 5 different types of wallets you should know about.
1. Paper Wallets
A paper wallet is a document that contains copies of the public (used for people to send cryptocurrencies to you) and private (used to send cryptocurrencies to others) keys that make up a wallet. Often it will have QR codes, so that you can quickly scan them and add the keys into a software wallet to make a transaction. It’s a hacker-proof choice and is also stored offline. It is advised to keep multiple copies of your keys because paper can be damaged.
2. Online / Web Wallets
Online wallets are the easiest to use. These are wallets that you can access online and are a fast way to execute transactions. Although, it is ill-advised to store huge quantities of cryptocurrency because online wallets are stored on another server, which may be prone to being hacked. For example: In 2014, hackers stole $460 million worth of Bitcoins from Mt. Gox, a popular Bitcoin exchange site.
3. Mobile Wallets
These type of wallets can be accessed through your mobile device in an app. These are ideal for doing everyday transactions. Similar to an online wallet, these are prone to hackers and should not be the primary method of storing large quantities of cryptocurrency.
4. Desktop Wallets
Desktop wallets are downloaded on a laptop or a PC. These wallets can be downloaded from the official coin website of a specific coin. They are easy to use and can be accessed without internet. Most people use an older laptop and keep it completely offline for maximum security. However, there are still open to malware, viruses, and keyloggers!
5. Hardware Wallets
These wallets are cold-storage devices that generate keys while making transactions. These type of wallets vary; some have screens and some have batteries. This is the recommended wallet for storing large quantities of cryptocurrency, as it often gives you more control over your financial security