Types of Crypto Coin Wallets
April 30, 2018
There are many articles on the internet that states the benefits and future of cryptocurrencies and even few particular crypto coins. This convinces many new investors to invest in the cryptocurrencies, but in reality, this only helps them through half of the way. These new investors need guidance regarding the investment storage. You cannot store these cryptocurrencies in your regular banks or in your regular wallet.
Many people investing in cryptocurrencies are confused regarding the crypto-coin storage options and select the cheap ones that are available in the market. They are mostly unaware of the options that they have for storing their crypto coins. The wallets are digital safes that are specifically designed to store the crypto coins and keep them secure from any attacks and data manipulation. There are basically two types of cryptocurrency wallets which are hot wallets and cold wallets.
The Hot wallets are cryptocurrency wallets that are connected to the internet and can be used as a mode of transactions with any crypto coin platforms. These are basically an online connected wallet that can be used for transactions at any time. These wallets are basically software platform or trusted web platform.
As it can be assumed that cold wallets are the opposite of hot wallets. The cold wallets are safe wallets that are not connected to the internet hence preventing any online attack threat. The cold wallets are only used for storage and are only used when the online resources of the investors run dry. There are hardware wallets such as pen drives, hard disks, and compact disks that can be used as cold wallets.
There are many subtypes of the above-given wallets types that are explained below so that the first time investors can understand the wallet options they have for crypto coin safekeeping.
This wallet falls under hot wallet category as it is constantly connected to the internet. These mobile wallets are used to store all kinds of crypto coins based on the wallet application that you are using. Many cryptocurrencies provide their personalized wallet for storing their own crypto coin. These wallets are available for all devices regardless of the platform. Mobile wallets are considered the fourth most secure wallet for storing crypto coins.
This is another typical hot wallet that stores your crypto coin on an online web platform. Although these types of wallets are secure, the encryption of these wallets should be considered before actually seeking their services. There are hosted and non-hosted web wallets but it is recommended to use non-hosted web wallet so that you can control the funds on your own.
The desktop wallets are installable software available for desktop regardless of the platform. These software applications are generally provided by the cryptocurrencies who are serious regarding their user’s security. This type of wallet falls under hot wallet because of the internet connectivity required to transact the currencies. Therefore, it is recommended by experts to use quality anti-virus and anti-malware software and a strong firewall. Electrum, Exodus, Bitcoin Core are some of the desktop wallets that can be used to secure the funds.
This is a typical cold wallet that is available to the user for storing their investment. The hardware wallets are specifically designed for crypto coin storage. These are USB devices that have an OLED screen and buttons so you can interface with the device. This device falls in between $70 - $150 in the commercial market. The famous hardware wallets that are trending now are Ledger Nano S and Trezor.
If you are a new investor who have just bought any cryptocurrency or availed online cryptocurrency exchange services and are looking to secure the investment, then above-given are some of the wallet options that can be used to secure the investment. If you have a technical background then you should dictate the wallet based on your transactional purposes.