What is a crypto wallet

In order to interact with the blockchain - send and receive cryptocurrency, store or exchange it - you need a crypto wallet. They are very different, ranging from multifunctional, similar to mobile banking and ending with simple, working without a network connection. Let's figure it out, how and where to store cryptocurrency and review all types of wallets.

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Types of cryptocurrency wallets

“How to buy and where to store cryptocurrency?” are the two main newbie questions, who wants to start earning on the digital asset market. Lots of options. There are currently over a hundred cryptocurrency wallets. Some of them allow not only to store coins, but buy cryptocurrencies and even trade them. But the main principle for all wallets is the same - they provide users with a pair of cryptographic keys: public, serving as a storage address for coins, and private, acting as a kind of access password.

All existing crypto wallets can be divided into 5 species, which, in turn, are divided into two large groups - “hot” and “cold” wallets. “Hot” wallets are convenient for frequent transactions, but are considered less safe. “Cold” work without Internet access, due to which they are invulnerable to hackers and more reliable.

Mobile crypto wallets

These are applications for mobile gadgets. Mobile wallets are convenient for those, that allow you to store cryptocurrency literally in your pocket. They can be protected by PIN code or fingerprint.

Desktop

They are computer programs. This type of wallet is considered one of the most secure., because it allows you to store the secret key in files on your hard drive without access to the Internet.

Hardware crypto wallets

These are physical devices for storing cryptocurrencies.. Outwardly, they resemble a small flash drive.. This is the safest type of wallets, storing cryptocurrency without access to the network.

Custodial

Custodial wallets - online services, storing keys on their servers. Users of such wallets do not need to store private keys.. Get access to your assets from any device with Internet access, by logging into your account on the service.

Paper crypto wallets

A paper wallet is a pair of generated keys, written down on paper. This is an alternative cold wallet method, which can only work on incoming transactions. To send coins to another address, you will need to enter the keys in the electronic wallet interface.

Now you know how to buy cryptocurrency and where to store it. The choice of the type of wallet depends on, how often do you need access to funds. Larger amounts are recommended to be kept in “cold” wallets, and a small amount of crypto, required for daily transactions, on “hot”. Pay attention also to, that different wallets offer different commissions for transactions. Some allow you to set a commission at the discretion of the user, others - use the average commission in the network.

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