Types of Cryptocurrency Wallets and Their Overall Security Aspect

You can store your digital currency in a variety of ways with different types of wallets. In this context, the question is: Are these wallets safe? It is important to be familiar with the different types and varieties of cryptocurrency wallets available today before we get into the security aspect.

There are many types and varieties of cryptocurrency wallets

The wallets can be broadly classified into 3 categories:

Software wallets

Hardware wallets

Paper wallets

You can now sub-divide cryptocurrency software wallets into desktop, mobile and online wallets.

Desktop software walletsThese wallets can be downloaded and installed on both desktop and laptop computers. Although this particular version offers the best level of security, it is only accessible to the computer on which it was installed. There is also the possibility of losing all your money if your computer is hacked or infected with viruses.

Software wallets online:These cryptocurrency wallets are cloud-based. They can be accessed from any computer, from any location. This type of digital wallet stores private keys online, which is convenient and easy to access. These keys can even be controlled by third parties, making them vulnerable to theft and hacking.

Mobile walletsMobile software wallets, unlike the other types, can be used on smartphones via an app. These wallets can be used anywhere, even in retail stores and malls. The range of wallets is typically smaller than the desktop versions to fit the small space available on mobile phones.

There is a difference between software and hardware wallets

The aspect of storing private keys differs between the software and hardware digital wallets. Hardware wallets save the user keys on a physical device, such as the USB. These wallets provide additional security because the keys are kept offline. Hardware wallets can be used with various online interfaces, and can handle different currencies. It is easy to transact with these cryptocurrency wallets. You simply need to connect the device to any computer that is connected to the internet. Once the PIN has been entered, the currency can be transferred and then you can confirm the transaction. Hardware wallets keep your digital currency offline, so there is less risk.

Paper digital wallets: These digital wallets are user-friendly and provide high levels of security. The term "paper wallet" refers to a hardcopy copy of the user's private and public keys. It can, however, refer to a software program that generates the keys securely before printing, depending on the circumstances.

Paper wallets for swiping

It is quite simple to use paper wallets. To transfer cryptocurrency to your paper paper wallet, simply transfer funds from your software wallet to your public address. This is the address that your paper wallet will display. You can also transfer funds from your paper wallet to your computer wallet if you need to withdraw or spend money. This is commonly known as "sweeping".

You can either scan the QR code on a paper wallet or enter the private keys manually to sweep.

How secure are cryptocurrency wallets?

Different digital wallets provide different levels of security. Two factors are key to security:

You can choose which type of wallet you want - paper, online or hardware.

Choose a service provider

It is not necessary to mention that it is safer to keep your currencies offline than online. It is impossible to ignore security precautions, regardless of which wallet you have chosen. All the money in your wallet will be lost if you lose your private keys. It is impossible to reverse a transaction or reclaim money if your wallet is hacked.