Wallets Explained

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In the wonderful world of cryptocurrencies, you won’t get very far without finding you need a wallet. Even if you’re just collecting airdrops, you’ll still need to have one. Now, there’s plenty of them out there to choose from, but you need to know a little bit more before you can choose which one is right for you.

Before I break it all down for you, don’t forget to sign up for our newsletter, if you haven’t done so already, and our Telegram community is a great place to learn more about crypto from out other readers.

So, let’s kick-off with hot wallets.

A hot wallet is any wallet that has connected to the internet at some point. Since you need to access the internet to purchase, sell or trade cryptocurrencies, most wallets fall into this category, but hot wallets are typically considered less secure than cold wallets (I’ll tell you about those in a little bit).

Whether you like it or not, you’ll have to use a hot wallet at some point, but you’ll probably find that you need several wallets for different purposes. The one thing they all have in common is they both supply you with a set of keys: one public key, that is safe to share, and a private key that you must never share.

You’ll more than likely access an online wallet, such as MyEtherWallet, via your web browser. The problem with online wallets is that they are exceptionally attractive to hackers, especially when there are high balances. Since your address is publicly viewable, it’s easy for them to find out if you have a lot of valuable tokens or coins.

A mobile wallet is just as it sounds – it’s a wallet that you access from your mobile device, and many offer more advanced features than online wallets. Desktop wallets are the same, but they usually offer even better features still. Both mobile and desktop wallets have more security risks to be considered such as viruses or malware that may reveal your private key to hackers.

If you have an older phone or craptop lying around, you can do a clean system install on them and then only use them to access your hot wallets. This is almost as safe as cold storage, just don’t do anything else with them, like go browsing the internet.

Next up, cold wallets.

Quite simply, these are offline storage methods for cryptocurrency balances, and you can choose from paper or hardware wallets.

Paper wallets were the standard in the early days of crypto, but recently the Ledger and Trezor devices have rapidly gained in popularity and adoption. You can think of hardware wallets like a safe that you can safely store large amounts of crypto in.

Some hot wallets allow you to print off a paper wallet when you create an address, but hardware wallets are certainly a safer choice overall.

I hope this has been of some assistance to you. My personal preferences are MyEtherWallet used in conjunction with my Ledger Nano S. No referral links, just saying. For more awesome crypto hints and tips, don’t forget to sign up to our Telegram community. There’s always more to learn…

Chronic crypto nut and freelance writer/editor for longer than I care to remember. Have finally found a home here at Crypto Disrupt.

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