Do you trade cryptocurrency? Like paper money and coins, cryptocurrency assets should be secured against vandals. Luckily we have several wallets that you can use to secure cryptocurrency. A cryptocurrency wallet is any method you can use to store these assets, either online or offline. These wallets exist mainly in two types – hot wallets and cold wallets.
Hot wallets are usually connected to the internet, making them accessible from anywhere anytime. They can be broken down into the cloud, mobile, and software wallets. Cold wallets, on the other hand, aren’t connected to the internet. You can use them to store your cryptocurrency assets offline. They mainly consist of paper, USB, and other storage devices. Cold wallets provide the best way to secure cryptocurrency since they cannot be compromised by hackers.
Now, let’s narrow down to the methods to secure cryptocurrency assets.
- Paper Wallets
When you print out your private and public keys, then you have a paper wallet. So, it is either a physical piece of paper with keys or a key-generating software and a print-ready digital file. Paper wallets provide the highest levels of security. Some usually have QR codes for the eventual transfer of cryptocurrency wallets. Even with a high level of security, paper wallets can quickly get burned, damaged, and copied. Where you keep these paper wallets really matters. You may create multiple copies, laminate them, stored in multiple locations, or engrave the key on a piece of metal.
- Hardware Wallets
Unlike software wallets, hardware wallets do not require a smartphone or personal computer to be safe. Instead, they exist in the form of storage devices such as USB or micro-SD connected to a computer when there is a need. They are considered adequate, secure cold storage. Several hardware wallets are designed to work in tandem with specific web-based platforms and may support more than one cryptocurrency. Once you plug it in a computer, the wallet will be unlocked to make it possible for you to carry out transactions online. You will pay regular fees to use them.
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- Cloud Wallets
Cloud-based wallets are hot in nature. They store cryptocurrency assets online and are accessible from anywhere. When you want to quickly trade cryptocurrency, cloud wallets are the best. Being online, they are susceptible to the actions of hackers. Apart from having a password, the wallets you choose needs an extra layer of security. For instance, you can increase asset security by applying two-factor-authentication.
- Software Wallets
Software wallets are just that – downloadable software installed on a smartphone or a personal computer. The security level is relatively high, even though they are still vulnerable to viruses and hacker attacks. Depending on the type of wallet, you can access funds from one device or multiple ones. Managing funds on these wallets is much easier than you can imagine.
How you choose to store your crypto assets will depend on the number and types of assets you have. Good enough, different cryptocurrency assets have wallets designed explicitly for them. So, the choice is easy to make.