What Are Crypto Wallets? Do I Need One?

• A cryptocurrency wallet is a virtual wallet that houses the private passwords that allow you to access your cryptocurrency.
• There are multiple types of crypto wallets available – some are online/on your device, and some are physical objects like a USB.
• A crypto wallet is important because your keys are your only access to your cryptocurrency. Once your keys are lost, so is all your cryptocurrency.
• Cryptocurrency and crypto wallets are perfectly legal, and you may use your cryptocurrency anywhere as long as it is accepted.
• There are transaction fees applied when transferring currency from one wallet to another. The amount will change depending on the wallet.

Different Types of Cryptocurrency Wallets

Crypto wallets come in a plethora of different platforms and mediums. You can choose your crypto wallet based on your preferences.

1) Hardware Wallets

A hardware wallet is a crypto wallet that is a physical object, similar to a USB, instead of a virtual one. The idea behind hardware wallets is that you keep them in a safe spot until you need to access your private keys. The hardware wallet should be thought of as something to keep locked away in a safe.

A hardware wallet is perfect for those that prefer to have a physical reminder of their keys. If you have a safe or another area where you store important documents, this will join those.

2) Software Wallets

A software wallet is an entirely virtual wallet instead of a physical object. It may run on your computer and only be accessed by you. From your software wallet, you will be able to receive, send, and save your currency.

This is an ideal wallet for someone that prefers to keep their information on their computer.

3) Desktop Wallet

Like a software wallet, a desktop wallet is a program on your computer’s hard drive. It will save and keep your private keys safe. If you keep your private information only on your computer, consider adding a desktop wallet.

A desktop wallet is preferable for those that use the internet often and may need access to their keys in that way.

4) Paper Wallets

A paper wallet is a more traditional idea of a wallet. Your private keys may be physically written down and stored somewhere. This means that you may only use a paper wallet online.

A paper wallet is ideal for those that would rather keep a physical paper to remember their keys than store it online.

5) Mobile App Wallets

A mobile app wallet is an app made specifically to store and make the most of your private keys. The entire purpose of the app is to make using your cryptocurrency easy. From a mobile app wallet, you will be able to use your cryptocurrency as well as receive it.

A mobile app wallet is perfect for those who constantly keep their phone on them and often buy and use their cryptocurrency.

6) Website Wallet

Similar to others we’ve discussed, a website wallet is one that exists entirely online. Your website wallet may contain all your private keys, and you may only access it online. You will be able to view your keys from an internet browser or a mobile device.

A website wallet is ideal for those that store most of their information online.

7) Hot Wallet vs. Cold Wallet

As we’ve seen, some wallets work both online and off. A hot wallet is a wallet that stores all of its information online. If your crypto wallet is accessible through the internet, you have a hot wallet. A hot wallet may be easier to access but more likely to get accessed by someone you don’t want to see your info.

A Cold Wallet is the opposite – a wallet that is not connected to the internet in any way. A cold wallet may refer to a paper wallet or a hardware wallet. A cold wallet may be inconvenient in its accessibility, but it will be safer because no one will access it without your permission.

8) Atomic Wallet

Atomic Wallet is a crypto wallet that can support over 500 types of cryptocurrencies. If you’re looking for a wallet that can hold multiple cryptocurrencies, give it a try.

How Does a Cryptocurrency Wallet work? 

Cryptocurrency is a virtual currency that can be traded and used. From your crypto wallet, you will be able to attach accounts and transfer between them. After inputting the destination address where you would like funds to go, your wallet will transfer them.

Private keys are what is kept in your crypto wallet instead of your cryptocurrency. It would help if you thought of your private keys as secure codes unique to your cryptocurrency. Your private keys are the way to access your currency. Actual money is not stored in your crypto wallet, but instead, the private keys are. They are your access to your actual money.

Are These Crypto Wallets Secure?

While crypto wallets are safe, there is always a chance for hacking and other accessing of your accounts. If you are worried about being hacked, you should consider using a cold wallet as the internet’s disconnect keeps your private keys much safer.

It would help if you kept your wallet and keys safe, as losing them means losing all your cryptocurrency. Your keys are your only gateway to your currency.

Things to Keep in Mind when Selecting a Crypto Wallets

Here are some things to keep in mind when selecting a crypto wallet.

1) Exodus

• This one wallet can hold a wide variety of currencies.
• It receives regular updates to ensure your keys are safe.
• Easy to use and beginner-friendly

2) Wasabi

• Privacy is the main priority
• A hot wallet that can still protect your private keys
• Open-source

3) Electrum

• Keeps your keys offline to ensure safety
• Great for advanced users
• Plug-ins are supported

4) Mycelium

• Transaction fee settings allow you to add times you’re willing to wait for a transaction to go through.
• Offline storage of private keys is available for safety.
• Open-source

5) Trezor Model T

• Supports many cryptocurrencies
• Open-source
• The limitless storage means you never run out of space.

6) Ledger Nano S

• Cheap yet effective
• Protects your keys and keeps them safe
• Open-source

How to Choose the Right Crypto Wallet?

Choosing the right crypto wallet really comes down to personal preference. You must decide if you prefer a cold or hot wallet first. If you find that you’re someone who keeps a physical reminder of their belongings, perhaps a cold wallet will work better for you.

If you often save your important documents and information online, a hot wallet may be your best bet. From there, you can determine what wallet will work with your lifestyle. If you spend a lot of time on your cell phone, you may do well with a mobile app wallet, for example.

Certain disadvantages come with each wallet type, as well. Hot wallets may be more prone to hackings and exposures, while cold wallets may be harder to access and use.

A mobile app wallet will work best for those who perform many transactions as the accessibility is supreme. Beginners may benefit from a hardware wallet as the simplicity of it is easy to grasp.

Conclusion & Recommendation

If you have cryptocurrency, then a crypto wallet is essential. Having a crypto wallet ensures that your private keys, and, in turn, your currency, are safe. They also provide an easily accessible spot for you to store and use your currency. If you have cryptocurrency in any capacity, you should consider getting yourself a crypto wallet.

Based on everything we’ve learned here, I would recommend using a software wallet as nearly everyone nowadays is online. You will be able to access your private keys with the click of a button, convenient as most people have a cell phone on them 24/7. Having that easy access ensures that you can use your private keys when needed though they will remain safe otherwise.