Most people see Bitcoin as a private and secure currency, but it is not without risk. To use bitcoin to keep your fund private and secure, users have to choose a suitable wallet to protect their finances.
A crypto wallet or cryptocurrency wallet is a digital wallet used to send, receive or store different digital currencies. A cryptocurrency wallet is a software that tracks digital keys used in signing cryptocurrency transactions and is the only way of proving ownership of cryptocurrencies. This makes cryptocurrency wallets important for trading cryptocurrencies.
There are numerous types of cryptocurrency wallets. To choose the best one, the most important factor to consider is security. Here are the available cryptocurrency wallets in 2021.
Hardware cryptocurrency wallets
As the first one on the list, hardware wallets are the most secure way of storing cryptocurrency. They are highly recommended for long-term investors who want to buy and store the crypto over an extended period. The most popular brands include Safepal, Ledger, Cobo Vault, and Trezor.
Just as the name suggests, a hardware wallet is simply hardware devices created specifically to handle public addresses and private keys. They are available as USB devices made with an OLED screen and buttons for easy navigation of the user interface. They also come with desktop apps for easy connection to a computer.
Most modern hardware cryptocurrency wallets allow you to store at least 22 cryptocurrencies and more than 500 ERC-20 tokens.
While these are not too relevant in the modern-day, paper wallets require high technical knowledge and caution to be used. To store your cryptocurrency on a paper wallet, you are required to print your security key and addresses on the paper then transfer the crypto to the paper. This cold storage method allows you to store your crypto offline. However, most cryptocurrencies do not offer paper wallets.
Even with their dying popularity, paper cryptocurrency wallets are the second most secure method of storing cryptocurrency.
Desktop crypto wallets
Desktop crypto wallets are hot wallets that come as software packs for installing into a desktop computer. They are available for most operating systems, including Linus, Mac, and Windows. With a desktop crypto wallet, you need to follow some basic security guidelines if your computer is always connected to the internet. This includes having a strong firewall and installing anti-malware programs.
Rated as the third most secure method of storing crypto, desktop wallet options include Bitcoin Core, Exodus, and Electrum.
Mobile wallets are the most commonly used hot crypto wallets in the market today. This is because they are fairly easy to use and mobile-based. If you trade popular cryptocurrencies like bitcoin, the mobile wallets are compatible with iOS and Android.
Mobile wallets rank fourth in terms of security when storing cryptocurrencies. This is because mobile wallets are always connected to the internet, thus increasing risk factors. Some mobile wallet brands to choose from include Trust Wallet, Coinomi, Mycelium, Electrum, and Safepal.
These are the least secure types of wallets for storing cryptocurrencies. Web wallets are hot crypto wallets always connected to the internet and are accessible through different browsers, including Firefox, google chrome, and even internet explorer.
The private keys to web wallets are stored online in a browser, making them highly susceptible to DDOS attacks. Crypto exchange platforms are types of web wallets. The most important factor to understand about web wallets is that users have no access to the private keys. If the exchange is shut down or hacked, you lose access to your crypto.
Examples of web wallets include Binance, Coinbase, MetaMask, MyEtherWallet, and CEX.io.
Matthew Stern is a technology content strategist at TechFools, a tech blog aiming at informing readers about the potential dangers of technology and introducing them to the best ways to protect themselves online.
As a tech enthusiast and an advocate for digital freedom, Matthew is dedicated to introducing his readers to the latest technology trends and teaching them how to gain control over their digital lives.