Explanation Of Different Crypto Wallet Types

by Alfredo Chaim
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Cryptocurrency has been revolutionizing the financial sector. It has grabbed the attention of worldwide investors, technology, government, professionals, organizations, and general public. Cryptocurrency popularity has fueled its usage growth. Some people are curious about which crypto wallet is the safest to store their virtual coins.

Why worry about choosing a cryptocurrency wallet?

Cryptocurrency is not physical. It is an array of codes. It is stored on a blockchain with a unique address. Simultaneously, the private key is used to unlock crypto assets in a wallet. The wallet helps to maintain funds’ safety. It does not store real cryptocurrency but holds information to connect users to funds and ensure safety.

Crypto wallet types

Hot wallets

It is a type that connects to the internet. It offers easy accessibility because of its connection to the internet. However, they are user-friendly but vulnerable to hackers and fraudsters. It offers less security!

Hot wallet types

  • Desktop wallets – It involves downloading the app from ZenGo to your laptop or desktop. The app helps to generate data files for storing wallet keys. Create a solid password to access the keys. You gain access to ownership of the desktop wallet but with the risk of malware infection or physical damage.
  • Web wallets – Web wallets can be accessed via a web browser. There is no need to download specific software or app. web browser empowers the user to gain access to their crypto assets from anywhere with a device web browser and password.
  • Mobile wallets – In hot wallet type mobile wallets are crucial. The functionality is the same as a desktop wallet but you need to install a mobile app on your smartphone. Mobile wallets offer better flexibility to exchange funds but with some security dilemmas.

Cold wallets

Cold storage means the token is stored in offline mode. They are solid vaults for daily transactions. People having crypto assets in a vast amount can find more safety with cold wallets. Crypto users can choose both cold and hot wallets to their advantage. Hot wallets allow better flexibility, while the cold wallet stores large fund amount securely. A hybrid approach offers flexibility and improved security!

Cold wallet types

  • Paper wallets – Paper wallets are physical paper that contains all the details needed to access the crypto assets. In general, it offers extra security. The risk is that you can lose the paper document, which can make you lose the crypto coins in the wallet. The paper wallet also has limitations and the transactions are time-consuming.
  • Hardware wallet – Online exposure to your private keys is completely avoided with hardware wallets. The keys are saved on a physical device in an offline environment. It is similar to a flash drive. They are easy to use as you can connect them to a desktop or any device via USB. Even when you connect the hardware wallet to the internet, the private key needs your approval to leave the device.

It is essential to understand different crypto wallet types. Security is of utmost importance when you plan to invest in cryptocurrency as it is a decentralized form of currency.

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