TYPES OF CRYPTOCURRENCY WALLETS

 

2017 is the year that the cryptocurrency universe finally merged with mainstream life as it has finally shown us all a little of what it is capable of. Bitcoin and the rest of the industry have witnessed a phenomenal surge in value where the whole market was able to multiply in value over 10 times within a year! With so much at stake when it comes to potential value, coupled with the ultra-portability these digital currencies are known for, it is very important to have the most secure storage facilities for your cryptocurrencies. Depending on your kind of use, and security need, here are the options you have when it comes to cryptocurrency wallets

 

Software Wallets

As the name implies these are cryptocurrency storage facilities that are programmed to be used on all kinds of devices with the sole purpose of receiving, sending and storing cryptocurrencies safely. Software Wallets come in two categories namely

  • Hosted Wallets: These are software wallets that are the closest thing that exists in the cryptocurrency world to a banking account. In that, this is a wallet with which the user accesses their cryptocurrency holdings using usernames and passwords but that is resident at the exchange site or Wallet Company rather than their phone or computer. A classic example of a paper wallet is that of Coinbase and Blockchain.info, but this category of the crypto wallet is mostly used by those who want instant access to their digital assets for day to day payments. However, they are not recommended for use for a permanent storage due to security concerns.
  • Non-Hosted Wallets: These are a category of cryptocurrency wallets where the software is installed right on the user’s computer or phone device, and where the whole crypto holdings are resident. In this kind of wallet, the total amount the user has in cryptocurrency are right there stored on their device and as such their computer or mobile device is their bank, with the responsibility of keeping their assets safe completely in the user’s hands. A good example in this category is Electrum and Exodus

 

Hardware Wallets 

Hardware Wallets are cryptocurrency wallets that are made in the form of dedicated hardware devices but whose focus is mainly on security rather than ready access to the stored currencies. Hardware wallets act like mini bank vaults where the user can keep their cryptocurrency assets with relative certainty that it is safe from physical or online theft. Hardware Wallets come at a considerable cost with some costing up to $100, and are mainly targeted for those with large crypto holdings. Examples are Jaxx, Trezor, and Ledger Nano S.

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Paper Wallets

This last category of cryptocurrency wallets is as simple and as ingenious as they are secure. All a paper wallet is in essence is your cryptocurrency holdings converted into what looks like your fiat money. When a user wants to turn to the use of a paper wallet, all they do is print out their cryptocurrencies on a sheet of paper (following certain procedures) in the form of QR codes. What this does is that it prevents any unscrupulous elements from following through the networks to steal your cryptocurrency holdings. Unless someone physically comes and steals your crypto assets from the safe or vault you keep your printouts, your cryptocurrencies remain safe for your future use.   

For further information on securing cryptocurrency in 2018