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Crypto wallets: what exactly are they?

Cryptocurrencies are unique in nature since they mainly exist digitally and do not have a physical form unlike fiat currencies, which include paper bills and coins. This makes you think about how cryptocurrency owners store all of their money. That is where crypto wallets come into play.

A real wallet stores paper bills, but a crypto wallet does not hold any of your money. Instead, it contains all of your private keys, which are the passwords to access your cryptocurrencies. Moreover, these keys are your identity or proof that you are the owner of the money present in the wallet. With crypto wallets, you can keep your hard-earned tokens safe and secure.

Different crypto wallets you can use

In today’s digital world, there are threats involving the safety of cryptocurrencies. That’s why you need a good storage where you can keep your funds secure. With that said, find out the different types of crypto wallets that will fit your preferences. Here are the crypto wallets you should know about:

Hot vs Cold wallets

Crypto wallets are divided into hot and cold wallets. The former is connected to the internet, which grants you convenience. The latter promises more security since only the owner can have access to the wallet, as long as they have the private keys. 

Kinds of Hot wallets

If you are planning to use a hot wallet, then you should know its different types since there are various options you can choose from. Below is a list of hot wallets you should know about:

Desktop wallet

As its name suggests, the desktop wallet is a computer program that you can install on your computer or laptop. Since this is connected to the internet, it’s ideal to install an antivirus as precaution Below are some of the most trusted examples of a desktop wallet that you can use:

  • Exodus – A wallet that lets you take control of assets and offers 138 cryptocurrency swaps with others.
  • Electrum – One of the oldest Bitcoin wallets and a crowd favourite due to its easy-to-use interface.
  • Bitcoin Core – Another secured Bitcoin wallet with decentralization and no voting as its main features.

Web wallet

With a web wallet, you can access your cryptocurrencies through a web browser., You will only need a computer and a stable internet connection to conduct a successful transaction. Aside from that, you can store your private keys through a host, a third party manages your crypto, or non-hosted, which means everything is under your control, platform. Here is a list of some web wallets you can use:

  1. Coinbase – This platform is perfect for beginners because of its easy-to-understand features and interface. Coinbase also allows you to buy, sell and exchange more than 30 cryptocurrencies to different people.
  2. Metamask – This is a web browser plugin you can use as your Ethereum wallet and it is only for this cryptocurrency users only. 

Mobile wallet

With the fast advancement of technology, you can now also use your phone to store your private keys! Mobile wallets are accessible on either iOS or Android phones, This is ideal to use if you often make transactions in exchange platforms. On top of that, this method is secure since it requires a specific QR code or your fingerprint to confirm your identity.

Kinds of Cold Wallets

If you value security over convenience, then you should consider getting a cold wallet. As mentioned earlier, a physical medium is offline because it stores all of your private keys. To give you an idea, below are some examples of cold wallets:

Hardware wallets

The most famous cold wallets come in the form of hardware wallets. These devices resemble a USB drive that stores all of your private keys. Moreover, the purpose of hardware wallets is to isolate all important data away from vulnerable devices such as your phone or laptop.

When you own a handful of cryptocurrencies, hardware wallets are one of the best options to choose. This will not only keep them organized but also safe from malicious intent. However, the downside is that you must keep it to yourself at all times or lock it at a place where only you can know. Once you lose this, every access you have to your digital money will be gone.

Paper wallets

Another example of a cold wallet is the paper wallet, which is a printed piece of paper that contains keys and a unique QR code that you can use when making a transaction. Before the hardware wallets, this method is the most preferred option since it’s completely away from online attacks. However, there are tendencies when you can lose, damage or misread the paper, which can prevent you from accessing your money.

Stay secured with your crypto wallet

Even though crypto wallets promise you security and convenience, it is still best to stay vigilant and create preventive measures to steer you away from danger. Check out some tips that can help you stay secure with your crypto wallets:

  1. Use a VPN

Subscribing to a reliable VPN is what will keep your internet connection safe from hackers online. This is because it redirects your connection to an encrypted tunnel, which in turn makes your IP address invisible to anyone. As such, this will help your hot wallets be more safe and secure.

  1. Avoid phishing

Through time, hackers get smarter and creative because they study the patterns of your web browser through cookies and data. Chances are you would suddenly receive random emails that seem related to your usual website. To avoid this, always make sure that you are double checking the domains of your link. You can do this by searching it in search engines like Google or Bing.

  1. Keep your passwords to yourself

Treat your passwords as a secret code that can’t be shared with anyone since it contains everything about you. This information is yours alone and you should never give it to anyone else. To double the security, make it a habit to change your passwords after every 6 months to keep hackers away!

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