CryptoWallets - Which one should you use

Saw a lot of posts lately about wallets so here we go:What is a cryptocurrency wallet?A cryptocurrency wallet is a hardware or software program that allows you to store, send and receive digital currencies. Because cryptocurrency doesn’t exist in physical form, your wallet doesn’t actually hold any of your coins — instead, all transactions are recorded and stored on the blockchain. Some cryptocurrencies offer their own official wallets, while other products allow you to store multiple currencies within the same wallet.How do cryptocurrency wallets work?Instead of holding physical coins, a crypto wallet is electronic and includes a public and private key.- Public Key: This is a long sequence of letters and numbers that forms the wallet address. With this, people can send money to your wallet. It’s similar to a bank account number in that it’s used to send money to an account only.- Private Key: This is used to access the funds stored in the wallet. With this, people can control the funds tied to that wallet’s address. Like a PIN, you’ll need to keep your private key secret and secure. However, not all wallets give you sole ownership of your private key, which means you don’t have full control over your coins.​Type of WalletsCold(Hardware) Wallets:Hardware wallets are the most secure wallet option available. Unlike the online or software crypto wallets, hardware wallets are completely offline and are virtually hack-proof. Hardware wallets allow users to send or receive funds only when the device is connected to a computer with access to the internet, and cannot send funds without a user pressing a physical switch or button on the device itself.​Pro:Reasonable priceHigher security - possibility of offline storageSupports multiple coinsAccepts crypto transfers even offlineEase of useCons:Not mobile friendly​Options:LedgerTrezor​Hot WalletsHot wallets are digital wallets that are connected to the Internet. These allow quick and immediate access to your digital currencies, but because these wallets are constantly connected to the network, there is a risk of the wallet being hacked by exposing the private key. The primary use is for ‘everyday’ money when high liquidity is needed. It is recommended that hot wallets use a PIN password as well as second layer authentication (2-FA).​ProMobile friendlyPossibility to buy/sell crypto directly from the wallet2 step verification for better securityPossibility of earning interest/stakeCons:At risk for malware and virusesLosing the assets if the phone it's lost and the seed phrase not backed upSome require the KYC process​Options:ExodusMetamask(best for ethereum)Electrum(bitcoin dedicated)CelsiusCoinbase WalletNatriumMaiarTrust WalletNexo WalletAnd many others​Exchange(Online) WalletsExchange or online wallets are typically accessed through cryptocurrency exchange accounts. Online wallets are easy to access and use, but don’t provide full control over user funds and are at risk of hacking.Pro:No need for transfers to and from walletCons:Not your keys, not your coins​Options:BinanceKrakenRobinhoodCoinbaseAnd others​Paper WalletsTo keep it very simple, paper wallets are an offline cold storage method of saving cryptocurrency. It includes printing out your public and private keys on a piece of paper which you then store and save in a secure place. The keys are printed in the form of QR codes which you can scan in the future for all your transactions. The reason why it is so safe is that it gives complete control to you, the user. You do not need to worry about the well-being of a piece of hardware, nor do you have to worry about hackers or any piece of malware. You just need to take care of a piece of paper.​Pro:Not subject to malware and keyloggersThere is no need to rely on third-party services for coin protectionCons:Can be lost or taken by someone​Options:Paper Wallet generatorMyEtherWallet​​Stay safe and as always:DoYourOwnResearch

Submitted February 05, 2021 at 05:01PM