Types of cryptocurrency wallets
Online Wallets
This category includes all wallets that can only be accessed through a computer browser. They can be specialized online services for operating or using digital assets. In addition, online wallets include all accounts of cryptocurrency exchanges.
One should keep in mind that all user assets stored in an online wallet are under the control of the company that provides the wallet. Therefore, before you start using such a service, you need to study it carefully to understand how reliable it is.
Browser Extensions
This is lightweight software that is created as an extension for the browser. Such wallets are quite convenient to use. There are services in the cryptocurrency market that can only be accessed through a browser wallet.
In contrast to online wallets, they assume that the user himself must control the security of his device. If the computer gets infected with malware, hackers can steal the entire contents of the browser wallet.
In any case, it is necessary to save the private key on a separate medium. Then, if necessary, you can restore access to the wallet through another device.
Easy Wallets
In most cases, hot wallets don’t involve downloading the entire blockchain. Most often, they are lightweight software that is installed on a PC or mobile device. It is used only to store keys and provide connectivity to the decentralized network.
Standardly, such a wallet allows you to receive and send cryptocurrency, it may have additional functions. When working with such software, it is important to keep private keys to be able to restore access to the account from another device.
Cold Wallets
Cold wallets are most often chosen by people who work with large sums of money, or plan to store cryptocurrency for a long time. Therefore, they need reliable storage, as well as protection against theft and loss of funds.
Downloadable wallets.
The classic version of a cold wallet involves downloading the entire blockchain to your computer. Take bitcoin as an example – today its blockchain size reaches 400 GB. Many users also use lightweight wallets for this purpose. In addition, there are versions for smartphones and tablets.
Once such a wallet is installed, the device is disconnected from the network and is rarely used for transactions thereafter. If the device is not unplugged, it cannot be considered cold storage.
Many users believe that the best cold storage wallets are those developed by the creators of a particular cryptocurrency. And software from third-party developers is considered less reliable. This is not the case. There are platforms that store bitcoins with just as high security.
Hardware wallets
A hardware wallet is a small device that is designed to securely store private keys as well as conduct transactions. They are considered cold because they are not connected to the internet.
To make a transaction, such a wallet must be connected to a PC via USB-connector. Next, you need to specify the amount and the recipient’s account. The sending itself is confirmed by pressing the physical button on the device.
A high-quality hardware wallet guarantees that the private keys will not be stolen, even if it is connected to an infected PC.
Paper Wallet
This is probably the cheapest way to store bitcoins. At the same time, it has high security.
A wallet is a simple piece of paper with public and private keys printed on it. It is possible to place QR codes for both keys on it, if you wish.
In order to receive funds on such a purse, it is necessary to give the sender a public key. And to send cryptocurrency, it is necessary to enter a private key into any wallet and create a transaction. Both of these actions are simplified by the use of QR codes.
Multicurrency wallet
This is a separate category of cryptocurrency wallets, which involves storing different assets in one place. They come in different types: online wallets, dostktop, mobile, hardware, etc. Moreover, such wallets can be either hot or cold.
Today it is multicurrency wallets that are in maximum demand. The main reason is their convenience – if a user wants to work with different assets, he does not need to download separate wallets for each cryptocurrency.