The Most Popular Types of Crypto Wallets, Their Strengths & Limitations
So, you have accumulated some crypto and are looking for reliable storage for your digital money?
Your go-to can be a digital crypto wallet, a dedicated program or application that saves and securely stores public or private keys to your cryptocurrencies. Private keys can be thought of as passwords or unique codes that keep your crypto safe from any unauthorized third-party use. Moreover, once you start utilizing your crypto wallet, you can take full control of your money. You can top up your crypto balance, receive payments in different currencies, send digital money to other users, trade your assets more easily on your favorite exchanges, and much more.
As you see, crypto wallets can be a win-win choice when it comes to storing and managing your cryptocurrencies. But not all crypto-wallets are created equal. And it’s good to know what to expect from different types of wallets, as well as what advantages and limitations you may experience when using them.
Online Wallets
Though it can be a nice temporary storage, an online wallet isn’t the safest solution, especially if you intend to store your digital assets for a long haul. If you opt for this type of wallet, the wise decision would be to keep only small amounts of crypto in it. It might be a handy option for those who need to occasionally pay for certain products or services in crypto or want to use their crypto on a day-to-day basis. What’s more, web wallets are the easiest way to access your assets via the Internet on multiple devices and quickly carry out the required transaction. All you need to do is contact a web wallet service and obtain a unique code from them, which will give you access to your private keys stored on their servers.
The major problem with online wallets is their vulnerability to hacks and scams. Viruses or any other type of malware accidentally installed on your device might enable fraudsters to access your keys and then strip you of your hard-earned crypto. Plus, all information about your assets is stored on third-party servers, which means you can never be sure your money is 100% safe.
Mobile Crypto Wallet Apps
Now there’s a dedicated application for virtually everything. And crypto wallets are no exception.
Just like any app, your crypto wallet can be downloaded from the App Store or Google Play and installed onto your smartphone within minutes. After that, you can use your wallet as you would normally use any other mobile payment app.
Link your mobile wallet to your exchange account and start transferring your funds faster. Mobile crypto wallets are also a convenient way to pay for products and services in physical stores and on ecommerce platforms. Some apps even have a QR code scanning feature, which makes face-to-face transactions a breeze.
Mobile wallets give you more flexibility and control of your cryptocurrencies. With a reliable app, you can instantly put money on your wallet, make payments, and even trade your crypto assets on the go. Additionally, you can keep track of all your transactions and tweak app features to your liking.
The major downside to crypto wallet apps is that you may lose your digital money in case of smartphone theft, loss, or damage. What’s more, as is the case with online wallets, their mobile counterparts are not immune to hacks and phishing attacks.
Hardware Wallets
If you’re on the lookout for the safest storage option for your digital money, you can’t go wrong with a hardware wallet.
Hardware, or cold storage, wallets have long earned a reputation for providing the safest storage for your crypto. Unlike other popular digital wallets, they don’t rely on third-party software or devices to store the keys to your digital currencies. They are physical devices themselves.
Hardware wallets normally look like a USB drive, but instead of storing media files, they serve as a safe and secure repository for your digital money. They isolate your private keys from the World Wide Web, keeping them safe from online threats. This goes a long way towards mitigating the majority of safety risks most Internet users run these days.
Don’t hesitate to use hardware wallets if you want to add an extra layer of protection against malware, hackers, and scammers eager to pocket your cryptocurrencies. That’s why this type of wallet is the best bet for crypto owners that tend to invest in crypto in the long haul or store large crypto amounts in their accounts.
Despite its manifold benefits, a cold storage wallet has its own fly in the ointment.
If you decide to go with a hardware wallet, be ready to fork out as it’s the most expensive option on the market. Plus, it can hardly be called a user-friendly tool, especially for beginners. So, it might take you a while to set up and configure your wallet to your liking. But the added safety your hardware wallet can afford is definitely worth the hassle!
