All you need to know about cryptocurrency wallets!
Crypto currency has been the talk of the town recently with new projects coming out every new month. However, have you ever thought about where you store your coins after acquiring them?
No, they cannot be saved in your pocket or in a folder on your computer. You need a crypto currency wallet for storing your coins. But, is that all that a crypto wallet can do? Read on to find more about crypto currency wallet.
What is a crypto currency wallet?
A crypto currency wallet is a storage space that lets you store or retrieve your crypto currency assets such as tokens/coins. In addition to this, you can also store your passwords and other pieces of information so it remains end-to-end encrypted and safe from any possible breaches.
However, you don’t store your coins in a wallet, rather your wallet has the address of your coins and allows you to interact with them when needed.
Types of crypto wallets
There are two types of crypto currency wallets that you can use right now. First, a hot wallet (online storage) and cold wallet (offline storage).
Hot wallets
Hot wallets are more popular among crypto currency users because you can easily set up your wallet on the internet and start using it as storage.
Whenever you sign up for a cryptocurrency exchange, you will have to download an app that will work as a hot crypto currency wallet.
However, hot storage wallets are not the safest options available to store your information. Mainly because they are prone to crypto hacks and anyone with the right amount of expertise can breach your assets.
This is why it is necessary to be more vigilant and use a VPN while surfing through the web. In addition to this, do not disclose your crypto keys to anyone to be on the safer side.
Cold wallets
A cold wallet is basically offline storage. You can keep it in a USB or hard drive and connect it to the internet when you need to make a transaction.
In comparison to hot wallets, cold wallets are more secure as no one can breach into your assets (unless they steal the drive itself).
However, cold wallets are not as convenient as you will need the device to transfer or snag with your assets. Whereas you can access your hot storage anywhere with just a working internet connection.
The best option
There is no best option out there for crypto currency wallets. You will have to choose an option that works best for you.
For example, if you are someone who likes to HODL your crypto coins for a longer period then a cold storage will be a better option as you will not have to worry about any security breaches.
However, if you are someone who regularly trades coins on crypto exchanges then a hot wallet will be your best bet as it is more convenient to use.
You can also use a combination of both hot and cold wallets if it’s more convenient.