A cryptocurrency wallet is “digital wallet” that stores and holds your cryptocurrency tokens and blockchain assets. There are several kinds of wallets that we’ll cover below. Each kind of wallet has positives and negatives, so depending on how you use your cryptocurrency, you may find some options better than others.
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Many websites and online services offer cryptocurrency wallets for people who like to have access to their assets anywhere with an internet connection.
You can access your wallet anywhere in the world where you have the internet. These online services are designed for quick and easy access.
Using an online service means you are trusting someone else to hold your cryptocurrency. If the wallet’s website gets hacked or goes offline, you may not be able to access your cryptocurrency or even lose them.
Most blockchain projects have their own wallets that you can download to your computer to keep your assets. Also, there are several websites that provide desktop wallets that can hold many different cryptocurrencies in a single wallet.
Desktop wallets are generally more secure than online wallets since you are holding your own assets without relying on a web service. It’s also easy to send, receive and transfer assets through desktop wallets.
If you’re not at your computer, you won’t be able to access your wallet. Also, if your hard disk fails and you don’t properly backup your wallet, you could lose your assets. Lastly, if someone else has access to your computer or it gets hacked, it’s possible for others to access your wallet and steal your assets.
Similar to desktop wallets, some blockchains offer mobile wallets. This allows you to access and manage your cryptocurrency directly on your phone. Just like desktop wallets, there are also websites that offer mobile wallets that can hold multiple cryptocurrencies.
You can access your cryptocurrency anywhere with your mobile phone. It is easy to use your currency for purchasing things at merchants who support cryptocurrency payments.
If you lose your phone, someone could steal your currency. Also if your phone breaks and you don’t properly backup your wallet, you could lose your currency.
Hardware wallets are generally more secure than desktop/mobile wallets. There are several kinds of hardware wallets you can buy and connect to your computer via USB.
These wallets are completely offline so even if your computer gets hacked, your assets are completely secure. You only need to connect the wallet to your computer when you want to use/transfer your currencies.
To access the currency in your wallet, you’ll need to connect it to your computer. It is less convenient if you are trading or using your cryptocurrency often. Also, these wallets can only hold certain blockchain assets and may not be able to hold all your different currencies.
Example Hardware Wallets:
This is the last wallet we’ll cover in this post. This wallet is literally a piece of paper that has a special passphrase that holds your cryptocurrency.
This is possibly the most secure way to store your cryptocurrency. As long as you keep the paper safe and secure, it won’t be compromised by technology or other unwanted access.
Paper wallets are the least convenient in terms of accessing and using your currency. Only use this option if you want to keep your currency secure and locked up for long periods of time.
As you can see, there are many options for holding your cryptocurrency. Depending on how you use your currency, chose the best option for you. It may be best to use different kinds of wallets for different uses of your currencies.