Crypto wallets can be a great way to access your digital assets and keep them secure. Depending on which platform you choose, you’ll either have cold or hot wallet. A hot wallet is a wallet that’s connected to the internet, while a cold wallet is not. There are five different types of wallets, some of them being hot, and others being cold. Let’s take a deeper dive into what those types are.
1. Online Wallet
An online wallet is a type of hot wallet that stores all of your information online, such as a cloud server. You can access your assets through a website or a compatible app. Crypto exchanges tend to have an online wallet where all public and private keys are stored online. This is the least secure type of wallet, as someone can hack a crypto exchange and all of your assets could vanish. However, online wallets tends to be the fastest when it comes to crypto transactions, and you have more options of crypto to choose from.
2. Desktop Wallet
Desktop wallets can be a great cold wallet if that desktop isn’t connected to the internet. Your private keys will be secure and can be only accessed on that specific desktop. But if the desktop you use is connected to the internet, you’re at risk of your keys being breached through scams and viruses. And if your computer crashes permanently, you’d have to go through a recovery method to access that wallet on a different computer, assuming that desktop wallet platform has a recovery method.
3. Mobile Wallet
Basically everything that was previously mentioned about desktop wallets can be applied to mobile wallets. Mobile wallets are strictly available only through a mobile app, and offer great privacy if kept offline. What can give a mobile wallet the edge over desktop wallets is mobility. You’ll be able to to carry your mobile wallet on the go and access it when you please. Just don’t lose your phone or you’ll have to look for recovery options if they’re available.
4. Paper Wallet
The original cold wallet, paper wallets involve printing out your private and public keys, then sending and receiving cryptos by scanning the QR codes for the keys. But the process isn’t always as simple and can require advanced technical knowledge at times to utilize it. Paper wallets are rarely used anymore as technology has advanced and there are more modern cold wallets available. They’re outdated and you could simply misplace them, get it wet, or tear it mistakenly.
5. Hardware Wallet
Arguably the best type of wallet you can get, hardware wallets are a device such as a USB drive, that stores your private keys. Their sole purpose is to be a wallet, and have special software that when you plug it into a computer, your data is kept safe. If you plan on holding large amounts of crypto, this is the most recommended type of wallet to go with. One of the few drawbacks of this type is that you have to buy the actual device and it can be expensive. But when dealing with larger amounts of crypto, it’s worth the money.
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