Different Types of Cryptocurrency Wallets. Image credit: AdobeStock
If you have landed on this page then for sure you are looking for the cryptocurrency wallet for keeping the cryptocurrency like bitcoin, dogecoin, etc. For buying the cryptocurrency it is necessary you should have a cryptocurrency wallet, and choosing the right wallet is tricky. Cryptocurrencies like bitcoin, Litecoin, dash, Ethereum and others can be kept in a digital wallet. For now we will just discuss bitcoin, so bitcoin is the famous cryptocurrency, and to keep this we need a digital wallet called bitcoin wallet.
Investing in bitcoin is just like investing in gold. Everyone who is investing in bitcoin has different requirements and expectations. Similarly every bitcoin wallet has its own features and functionalities.Yuan Pay Group So not every wallet is suitable for every investor.
In this article we will explore different types of wallets. Usually bitcoin wallets are classified in two categories: hot wallet and cold wallet. Take a look at immediate edge.
The major difference between cold wallets and hot wallets is whether the wallet is connected to the internet or not. Let’s look at both categories with explanation.
The offline mode wallets are called cold wallets. The cold wallet is usually used for the cold storages and crypto tokens. These wallets are more secure because they are offline and you can access them. It is just like a vault only you have an access key. There is no internet connection with it so no one could dare to hack it.
Hot Wallets are the opposite of the cold wallet. These wallets are connected to the internet, and this is the reason these wallets are less secure. To access this wallet you need an internet connection, there are still threads of being hacked, or scammers. The best thing in the hot wallets are user friendly, but still there are privacy and security concerns with this wallet.
Digital key is actually the identity of your wallet. There are two types of the digital key i.e. private key and public key. For cryptocurrency exchange, buying and selling of the cryptocurrency, for sending or receiving the cryptocurrency, or want to convert fiat currency in cryptocurrency you can use either private or public key. Private key is the confidential key that is stored in the online mode. Try not to share this key to anyone for business purposes using a public key. Both keys are the combination of the alphanumeric characters. Private key is more sensitive so don’t lose it. Otherwise you will lose your bitcoin forever, and you will never recover it.
Bitcoin wallets are like your online banking apps. The private key is responsible for protecting your bitcoin from unauthorized access. You must set the security for securing your wallet. Some wallets are offering offline private keys and some are offering online private keys. So keep it in mind before choosing the bitcoin wallet.
Actually there are 5 types of cryptocurrency wallet. Mobile, desktop, hardware, paper, and online wallets. But in this blog we will discuss the main three types of wallets. Every wallet has its own features, functions and security level. So we can compare these wallets on the basis of efficiency and reliability. Let’s differentiate between three wallets.
The online or web wallet can be accessed through internet browsers. It is my recommendation to never keep all cryptocurrencies in the web browser wallets. These types of wallets can easily be hacked, and hackers are always trying to hack these wallets. The best thing about the online wallet is it is very fast and completes the transaction in just a few seconds. Online wallets can be used for managing more cryptocurrencies at a time.
There are many wallets like coinbase and blockchain that have mobile applications, you just need to download and install them on your mobile. With the help of these applications you can easily access your cryptocurrency and can manage it. You need an internet connection to access these wallets, and keep the daily activities. Because of the internet connection you also need to set some security on these apps as well. For making the payments from the mobile application you don’t need to pay out your credentials. You can simply through the QR code. The one more security factor of the app is you can’t take the screenshot of the screen.
Desktop wallets are considered as the most secure wallet among the web and mobile crypto wallets. But still you require an internet connection to run your wallet on desktop. So make sure you have taken all security and safety precautions. But now desktop wallets are also available in the offline mode. So if you want to keep your cryptocurrencies in offline mode then you can. The offline features make the desktop applications more secure and reliable over mobile and web wallet.