List of cryptocurrency wallets
Just as you need a wallet to protect your money and credit cards, you should also know where you will store your cryptocurrencies.
When you buy digital currency from a trading platform, or exchange, you may have the option to leave your coins “keys” inside the account – this is a form of storage. But you can also move it from the platform to a personal crypto wallet, which may be an online program (hot wallet) or a completely offline device (cold storage).
Here's what you need to know about cryptocurrency wallets, and how to decide which storage option is right for you
What is a cryptocurrency wallet?
Like a regular wallet that stores physical currency when not in use, a cryptocurrency wallet is a place to store your digital currency.
All you really need to trade in cryptocurrency is two things: your wallet address, also called your public key, and then your private key and the blockchain.
public key It is like your bank account number. You can share it with other people or organizations, so they can send you money or take money from your account when you allow it. These people usually view your public keys as a wallet address — a more hashed or compressed version of that public key.
but private key It's like your bank account password or your debit card PIN.
As a purely digital currency, crypto is not held directly in your wallet; Instead, the wallet stores information about your public and private keys, which amounts to your ownership stake in the cryptocurrency. With these keys, you can send or receive cryptocurrency while keeping your private key encrypted.
Types of cryptocurrency wallets
Different cryptographic storage options can serve different purposes, depending on what you plan to do. Long-term bitcoin investors, for example, who plan to hold it for a while as a store of value may want to secure an offline cold storage wallet. On the other hand, people who are more involved in actively dealing with cryptocurrencies may want the convenience and speed that an online hot wallet can provide.
Sometimes called cold wallets or cold storage, these store your keys on a device that isn't connected to the Internet. Many popular cold wallet devices are similar to a USB drive. Sometimes paper wallets - where you print information about your public and private keys on a sheet of paper - are used as cold storage.
Cryptocurrency enthusiasts often see cold storage as the gold standard for protecting your digital assets. Since they are offline, hardware wallets are the hardest type of wallet to hack. But this does not mean that there are no risks.
Hardware wallets can easily be lost so hacking can remain a concern. If you choose cold storage, we recommend purchasing a device directly from the manufacturer, rather than buying a used one. If you purchased from a third party, you may risk the device being tampered with by a hacker who may have purchased it, breached it, and repackaged it for sale.
These may also be called hot wallets, you can think of a software wallet as your online bank account. They are often associated with exchanges, are easy to use, and have really opened up the space for a more mainstream market.” "But there are many risks to keeping your money online."
Hot wallets can take many different forms. You can access one through the crypto exchange platforms you use to buy your coins, download a program on your computer desktop, or even use a smartphone app. But since each of these options leaves your public and private keys online, you may run into a higher risk of hacking than if you were using cold storage.
How to choose the right crypto wallet
When choosing a storage option for your cryptocurrency, you should assess your risk tolerance and goals, as well as your level of knowledge when it comes to cryptocurrencies. If you want to hold your coins for the long term and don't plan to do any trading, cold storage may make more sense. But if you are a beginner and are generally wary about how much you invest, you may prefer the simplicity of being able to buy your coins and keep them in the exchange.
Crypto wallet security
Like any type of online account, the active security measures you take can make a big difference in keeping your wallet safe, here are some things to keep in mind:
- If your wallet is running software, update frequently and don't keep using old versions of the software.
- Sign up for two-factor authentication, and be sure of any hot wallet exchange or software
- Don't share your private key with anyone, just like you don't share your bank card details.
- Keep strong passwords that you update regularly, and don't use the same password for multiple accounts.