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Unlike classic currencies, cryptocurrencies are stored in a wallet and are therefore not physically present. In order to keep your cryptocurrencies safe, you should make sure that your cryptocurrency wallet is secure and data-protected. This article explains what else you need to consider when choosing a cryptocurrency wallet. 

What is a cryptocurrency wallet?

A crypto wallet is an online or offline wallet in which investors can store their cryptocurrencies. While online wallets run on a cloud and can therefore be accessed from anywhere, an offline wallet is reminiscent of a classic wallet. Only the appearance differs, because an offline wallet is more reminiscent of a USB stick than a classic wallet. While an online wallet is called a hot wallet, an offline wallet is called a cold wallet. Coins and tokens can be stored in both wallets in a secure manner. Basically, however, there are different encryption methods. When buying a cryptocurrency wallet, it therefore depends on the storage location and the deposit security. Furthermore, when buying a cryptocurrency wallet, it should be noted that not every cryptocurrency can be stored in every wallet.

The following types of cryptocurrency wallets are available:

  •     Wallet for the smartphone/tablet/browser (web wallet).
  •     Wallets for the computer (software)
  •     Hot wallets on the internet in the form of a cloud wallet (online)
  •     Physical cold wallets (hardware)

Tip:

With over 1500 cryptocurrencies, there are also countless different wallets. You therefore need to find out which wallet is suitable for your cryptocurrency. Not every wallet can store every cryptocurrency!

Comparison of the cryptocurrency wallets Hot and Cold

In the crypto world, a distinction is made between cold wallets (hardware) and hot wallets (online). Hardware wallets are physically in your hand and hot wallets (online) are only available on devices with internet access. Flexible use is made possible by retrieving cryptocurrencies via tablet, smartphone or PC. The cold wallet, on the other hand, is tangible and located in one place. There are therefore major differences between these two types, which I would like to explain to you in the following comparison.

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Software and paper wallets at a glance

Although hot and cold wallets are the most well-known wallets for cryptocurrencies in yoour https://exnessbroker.net/mt4/, there is also the software and paper wallet. A software wallet can either be on your smartphone or computer. Both as a downloaded software application or as an app, the wallet can be stored virtually. Software wallets are characterised by very good security regulations, but are not flexible in use, as the storage of the coins always takes place in only one place. It should be emphasised, however, that the storage of the private key is possible in a user-friendly way with software. Thanks to the encryption of the key, it is even possible to store the key in the key ring of the computer or smartphone. This enables faster access to the coins.

For all crypto owners who would like to have something tangible, they can enjoy a paper wallet. This is a paper printout of the access data of one's own crypto wallet including a QR code. On the one hand, such a printout is useful because the access data can be stored physically. On the other hand, sheets of paper can quickly get lost if they are stored in an unstructured way. I therefore do not recommend this type of wallet, as there are certainly better storage locations for one's own cryptos.