A crypto wallet is an essential component of your crypto endeavour, as it is not only a safe place for coin storage, but also a way to send and receive cryptocurrencies. Though crypto wallets come in many different forms they all serve the same function, although some wallets are more appropriate than others for different uses. To be able to choose wisely whether to prefer a web, mobile, desktop, paper or hardware crypto wallet then, you must first have a clear idea and plan of how you intend to use your cryptos.
Crypto wallets are broadly divided into two categories, namely hardware and software wallets, both of which store the information that grants access to your crypto assets on the blockchain, in other words they store both your public and private keys.
As implied by their name, hardware wallets are actual physical objects (usually in the form of a USB drive). There are several popular and reliable hardware wallets that one can choose from, such as for example Ledger Nano X, Trezor and KeepKey. As hardware wallets are physical devices and not connected online, they are by far the most secure type of crypto wallets. They are best suited for those who do not plan to trade regularly and prefer to hold large amounts of crypto for long time periods. Software wallets on the other hand, are applications that should be downloaded onto your computer or mobile device. Your crypto assets are kept safe in software wallets though the use of encryption. Software wallets are also known as hot wallets, while hardware wallets are called cold wallets, because the former are connected online, while the latter are not. Another option is to store your crypto in online platforms that can be accessed through internet browsers and for which no download and installation is needed on any device.
Further to the hardware vs software divide, crypto wallets are also categorized into the following types:
What should primarily guide and determine your decision and choice when searching for the best and most suitable crypto wallet is the exact use you intend to be making of your crypto. For example, a hardware wallet is the most suitable if you intend to buy crypto and hold it for a long time. This being said, you may well choose to have more than one wallets, of different types of wallets, for different uses and in order to further mitigate and dispense risk.
If you decide not to acquire your own crypto wallet in order to safely keep and hold your cryptocurrency, you can leave your crypto in your crypto trading account and trust your crypto brokerage enough, since they will be holding your private keys. This is not a recommended solution for most, though today’s big exchanges are highly secure and do their utmost to safeguard client funds and avoid security breaches. However, big exchanges are known to have suffered from security breaches or hacking attacks in the past and thus the risk is always there.
When trying to decide whether you should choose a hardware crypto wallet, take into account the following advantages and disadvantages of hardware, cold storage wallets:
There is no one cryptocurrency wallet type or brand that is undoubtedly the best all around. Rather the best crypto wallet for each user is the one that best serves and suits the needs and requirements of that particular user. The best crypto is different for each user and depends entirely on how each crypto owner intends to use their crypto funds.
If optimum security is your first priority, especially if you plan to hold your cryptocurrency for a long time and not engage in trading often, then a hardware wallet should be your choice.
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