There are different types of wallets for storing cryptocurrency. The hot wallet always remains connected to the internet. Therefore, hot wallets can be accessed anytime. On the other hand, the cold wallets are not connected to the internet and let you store your cryptocurrency in offline mode.
It is quite clear from its name that these wallets are used to store your cryptocurrency and crypto tokens. This Cryptocurrency wallet can be a separate device or just a program. Blockchain technology is used in cryptocurrency wallets and let you store your crypto assets safely. These wallets also facilitate the transferring of cryptocurrencies.
Some cryptocurrency wallets let you store only one type of cryptocurrency. On the other hand, most cryptocurrency wallets let you hold multiple cryptocurrencies in just one wallet. It means you can store Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, etc. in just one type of wallet. These solutions for storing cryptocurrencies will make sure that only the owner of that wallet can access the stored currency. Strong passwords and the latest technology security features make sure that your assets are safe. The users can access the cryptocurrency wallets from the smartphone and computers as well.
Different Types of Wallets
In broad terms, wallets are categorized into two different groups: hot wallets and cold wallets. But, the hot wallets are also further categorized into different groups such as online cloud wallets, most mobile wallets, crypto exchanges, and software wallets. There are desktop wallet apps that can be installed on your PC. If safety is your topmost priority, you should consider investing in a Bitcoin core wallet because you do not need to rely on a third party. Let’s discuss different types of wallets in detail:
- Hot Wallets
Hot wallets are those that can be accessed anytime and anywhere. You just need to have an internet connection and a cryptocurrency wallet app. The hot wallets apps are widely popular among cryptocurrency investors.
- Cold Wallets
These types of wallets app do not need any internet connection and you can store money by staying offline. You can receive funds by using the cold wallet app. But, you have to sign that transaction by using the private key. The cold wallets include hardware wallets and paper wallets.
- Hardware Wallet
This type of cryptocurrency wallet provides a perfect balance between convenience and safety for storing crypto. The hardware wallets are specially designed to offer protection to your private keys from online storage like computers and smartphone can be easily accessed by hackers. As your private key will never leave your devices, therefore, it cannot be hacked. In case your hardware wallet breaks then you can reviver your cryptocurrency from another device. You just need to know your recovery password.
- Paper Wallets
The paper wallets are stored on printed papers. Therefore, these are the safest form of wallets for storing cryptocurrency. By using paper wallets, you can transfer the cryptocurrency by entering the security key or by scanning the QR code printed on the paper. The paper wallets cannot be hacked because they are not stored on a computer or smartphone. Also, you do not need to be dependant on the third-party server. The crypto-owners should never click the photo of crypto wallets and save them on a phone or laptop. It is so because these photos can be exposed to the network.
Which Crypto wallet Is Safest?
Undoubtedly, the crypto wallet is the safest wallet of all. This type of wallet is secure from various online hackers and viruses. Also, you do not need a third-party for storing your data. You do not need a hot wallet app unless you are not going to use your cryptos for daily basis transactions.
On the other hand, a hot wallet is a perfect option if you want to use your wallet as an exchange. In addition to this, the hot wallet apps are user-friendly and let you easily store your assets. With the advancement in technology, various new coding techniques are used in hot wallets that make it difficult for hackers to access the stored data.
There are various cryptocurrency wallet apps that you can use in 2021 and the list is given below:
- Coinbase wallet
- MyEther Wallet
- Staked Wallet
- BitGo Cryptocurrency Wallet
- Bitcoin Core Client
- Electrum Wallet
- CoinPayments Wallet