Crypto Wallets: Types, advantages, and disadvantages

Cryptocurrency wallets are software for storing digital money. They store public and private keys that can be used to send and receive crypto coins, or to make payments using digital means. Without them, the idea of ​​cryptocurrencies will not last a day.

Paper wallet

This is a cold view of crypto wallets. To use it, you will have to print public and private keys. And to send funds, you will have to transfer the necessary amount to the public wallet address, you will need to enter your private key or using the printed QR-code.

Their advantages are: secure, they are not stored on third-party servers and cannot be hacked.

Among its shortcomings: difficult to use for daily transactions and you may lose access to the wallet if it breaks, burns or something else.

Hardware Wallet

These are some of the safest crypto wallets. Your private keys are stored on a physical USB drive. You can make online transactions with him, and when he is offline, he will be considered a “cold” wallet.

Advantages: great for storing a large number of cryptocurrencies that you are not going to use yet. It is also one of the safest options among crypto wallets.

Their disadvantages: not too convenient for beginners, but absolutely necessary for working with large volumes of cryptocurrencies.

Online Wallet

It works through the Internet. So while you are connected to the network, you can receive, store and send money, as well as make payments. Through it, you can manage several cryptocurrencies and make quick transactions.

This wallet stores your private key on its server. The cryptocurrency website can send you a crypto code with which you can access your money. Different services offer different services, including connecting to different devices that have access to the Internet, for example, to a phone, iPod, and computer.

Among its shortcomings can be called a low-security indicator, a high risk of hacking and fraud. There is also a high risk of becoming infected with computer viruses and the fact that your cryptocurrency is stored by a third party.

Mobile wallet

They are available on the phone through special applications. You can use them for shopping in stores that accept cryptocurrencies and pay in the same way as with Apple Pay.

One of the advantages of mobile wallets is that they are more secure than online wallets, convenient and have other useful features. For example, a scanner of QR codes.

Their disadvantages: a high risk of infection with viruses and in case of loss of the phone, you can lose all your savings.

Desktop wallet

It is designed to be installed on a computer. This is a convenient choice for those who usually trade cryptocurrencies through a computer. Also, your keys are not stored by a third party, which is very reliable.

Disadvantages of such wallets: less secure if connected to the Internet, and if you do not have a backup copy of the data from your computer and it stops working, then you can lose all your savings.