What are cryptocurrency storage devices or wallets?







We will now always find that the crypto currencies are in the limelight. It is mainly because of their high prices. When you have the desire to trade using the digital currency, there is one important aspect that you have to consider. Owning a digital wallet is definitely one of the primary elements that need to have in order to use the crypto currencies.













What do you know about the crypto currency wallet?







A crypto currency wallet is more or less similar to a bank account. You can store, receive as well as send your digital currency to another wallet account. Moreover, you use the wallet for shopping online. A crypto currency is used to store, receive and send the digital currencies like the Bitcoin, Ethereum and other crypto currencies.









How do the crypto currencies operate?





There are perhaps millions of people across the globe who use the crypto currency wallets. Unfortunately, there is a misunderstanding regarding the way they work and operate. The crypto wallets are not like the conventional wallets that store the digital currency in the physical form in any one location.





The existence of the wallets is basically in the form of the transaction records that take place around the world. All such transactions get stored in the blockchain. The crypto currency wallet is a software program that stores both your private as well as public keys. There are various blockchains involved aiding the users to keep a track on their total balance, send and receive funds and carry out other functions.





When someone sends you Bitcoins, or any other types of crypto currencies, the person is giving up his/her ownership of the digital currency coins and transmitting them to your wallet’s address. In order to send the coins and unlock the fund transferred, it is important that both the private key and the public address mentioned in the wallet are the perfect match.

Once the public and the private keys match with each other, there will be an increase in the balance of your wallet, and the balance in the sender’s wallet will automatically decrease. In such a transaction, you will not find any real exchange of the physical coin as it takes place in the virtual world. The whole transaction record takes place on the blockchain.





















The different types of crypto currency wallets





You will come across a wide array of crypto currency wallets, providing so many varied ways to store and access the digital currency. There are three main categories of crypto currency wallets. They are:

1. Software wallets, which are further sub-divided into:

Desktop

Mobile

Online





2. Hardware wallets





3. Paper wallets







Let us get into a brief discussion on each:





Software Wallets





A software wallet is a Bitcoin application that positions itself on the hard disk of a computer, and there is an absolute control and security. This is because each and every Bitcoin that you hold can be accessed only via your computer device.





Desktop Wallets

The desktop wallets are basically downloaded and then installed on your computer device like a laptop or PC. The wallets can be accessed only from the computer in which they have been downloaded and installed. It is the desktop wallets that are known to offer the highest security level. But, in case, your computer system gets hacked, or there is a crash, you end up losing all your funds.













Mobile Wallet

In order to use the mobile wallets, it is essential to have a smart phone and run the app. The mobile app is particularly helpful as you can use it practically anywhere, even when you are on the go. It is way simpler than the desktop wallet since only limited space is used for the downloading and installing.









Online Wallets

The online wallets operate on the cloud. The best part about such wallets is that they can be accessed from any computing device from around the world. There is no doubt to the fact that the online wallet is very convenient to use, but your private keys get stored online and a third party has the authority over it. This makes it more vulnerable and prone to hacking and online thefts.









Hardware wallets

If you compare the hardware wallets with the software wallet, they are different, especially in terms of storing the private keys. In the hardware wallet, your private key gets stored in a hardware device like a USB. The transactions that take place using the hardware wallets are not doubt online, but they are stored offline. Hence, the hardware wallets are considered to be more secure and safe.





The hardware wallets are known to support varying digital currencies along with different web interfaces. The compatibility depends on which currency you are using. Moreover, the entire transaction process is so easy and hassle free. You simply need to plug in the device to any web enabled computer or any device, enter the pin, send an amount and then finally confirm. Thanks to the hardware wallets that enables you to transact money while keeping it offline and guard against the online thefts.





Paper wallets





The paper wallets are no doubt very easy to use and also render a very high security level. The paper wallet can refer to a physical printout or copy of your public key and a private key. In fact, it can also denote to the software that is used for generating a pair of printed keys in a secured manner. When you are using the paper wallet, everything seems quite straightforward.





When you want to transact any digital currency to your paper wallet, it is catered by the transferring of the funds from your software wallet to the public address that is denoted on your paper wallet. Moreover, if you want to withdraw the currency or spend on something, the process of transferring fund is simple. You have to transfer from your paper wallet to your software wallet. This method is referred as “sweeping”. Sweeping can be done in three different ways:





You can do it manually Scanning the QR code on the paper wallet Entering the private keys













After Login a Online Crypto Wallet



Are the crypto currency wallets safe and secure?

Well, the crypto currency wallets are secured on the grounds of the type of wallets you are using. There are different types, including the desktop, mobile, online and hardware wallets. The security level of the wallet also depends on the service provider. When a web based wallet is used to store, receive or send the currency, it is way riskier than the offline wallets.





The online wallets are more vulnerable to hacker and thefts because of the use of the third party. On the other hand, the offline wallets are not easy or impossible to hack because they are not connected to any web network. Moreover, the offline wallets don’t depend on any third party for the purpose of the security.





There is no doubt to the fact that the online crypto wallets are more prone to the hacking attacks. But when smart precautionary measures are implemented and followed as well, the level of security will be quite a different one. You have to make sure that you don’t lose your private keys, because despite the type of wallet you use, you will basically end up losing all your money.





Similar is the case, when your wallet gets hacked and you without any knowledge send money to a fraud or a scammer, there is practically no way you can retrieve the lost funds. It is very important that you take the necessary precautions and safety measures and be careful.

A list of some of the popular and well known crypto currency wallets

There is a wide array of crypto currency wallet list. Before you pick any one, get to know about them briefly.











Bread wallet



It is a simple and hassle free mobile based Bitcoin digital wallet, where sending the Bitcoins is as easy and simple as an email sending. You can download the wallet from the Google Play Store or iOS app store. While using the Bread wallet, you will find that there is no server to send and receive the Bitcoins. This means that you have the absolute authority of the fund access all the time.

Pros:





Lightweight design

Good security and privacy

Fast application

Excellent for beginners as well as experienced users

Open source software

Free wallet

Simple and clean interface

Cons:

Lacks the desktop interface

A hot wallet











Exodus





It is probably one of the unknown digital wallets that can be accessed only on the desktop. The wallet support the storing, receiving and trading of the Bitcoins, Litecoins, Dogecoins, Ether and Dash. The interface is interactive and easy, and therefore the digital currency trade is hassle free. The in-built Shapeshift exchange allows you to trade Bitcoins for Altcoins and vice versa without the need to leave the wallet.









Pros:





Interactive and user friendly interface

Good security and privacy

Open source software

There is no cost for downloading

The wallet is friendly for beginners

Multiple currencies can be traded

Inter wallet trading option





Cons:





No mobile app

Lacks the web interface









Mycelium

In case, you are an experienced or an advanced user hunting for a reliable Bitcoin

digital wallet, Mycelium seems to be a very good option. The mobile wallet allows both the Android and the iPhone users to trade the Bitcoins and have a complete authority over the currency. There is no interference from any third party. What features make Mycelium one of the best digital wallets in the current market?





Cold Storage Wallets

An encrypted PDF backup

A local trading market

Secure and private chat

An integrated QR code scanner

Pros:

Advanced security features

Open source software

Free download

Good security and privacy





Cons





Not a good option for the beginners

There is no web interface











Copay

Copay is considered as one of the best digital wallets available on the market today. Convenience is the term used while using the Copay wallet. The interface is very friendly and can be accessed on desktop, mobile and the web. Because it is multi-signature digital wallet, funds can be shared between friends and business partners. It is good enough for a novice user. In fact, there are so many advanced features that the wallet will appeal to an experienced user as well.





Pros:





Open source software

No fees for downloading

Good level of privacy and security

Multi-signature transactions

Supports multiple platforms

Easy for a beginner to use

Cons: