If you are new to trading with cryptocurrencies, you have come to the right place. In this topic, we will cover the five popular wallet types. Additionally, we will discuss which wallet type is the most convenient to use for trading and which is the safest to store large amounts of cryptocurrencies.
The mobile and web wallets are currently the most used wallets for Bitcoins and altcoins. Firstly, the mobile-based wallet makes it highly convenient and easy to use. They are designed specifically to provide as much security as possible in an insecure environment. As phones can be possibly misplaced or defective; it’s advised that you set up the multi-factor authentication feature, password protect your wallet, and create a private key backup.
On the other hand, is the web wallet, and although you are relying on a third party to hold the coins for you, web wallets allow you to buy, sell, and send crypto instantly. It is one of the best options when managing and trading with multiple cryptocurrencies which makes this the usual choice for active traders. Additionally, since anything web-based or mobile-based can be prone to malware or lost, it is advisable not to store extraordinary amounts in this wallet type, unless used side-by-side with a hardware wallet.
These are physical devices to store your private key securely, such that it cannot be hacked, even if your device was compromised by malware. You can even use hardware wallets with a public computer that you don’t trust. Most hardware wallets provide a seed backup in the event that the device itself is lost or stolen.
Paper wallets are just pieces of paper with the private key or seed written on them. By doing so, only someone who can physically access your paper can steal your crypto. However, paper wallets are easily destroyed and therefore it is advisable to create multiple copies so that when it’s lost, your crypto can still be retrieved. Another disadvantage is that to send the crypto you have on your paper wallet to someone else, you will have to import the private key to some form of digital crypto wallet.
In conclusion, before you decide on how you wish to store your cryptocurrencies, it’s essential to first consider how you will be typically using them. By understanding each wallet’s advantages, you can equip them in your favor.