What are Crypto Wallet?

💡Crypto Wallet

The crypto wallet is a secure digital wallet used to store, send and receive digital currencies such as Bitcoin.

In order to use cryptocurrency, you need to use a cryptocurrency wallet.

Some crypto wallets are built for a single cryptocurrency, some wallets can be used for multiple coins, some wallets are managed by you, and some (such as those found on exchanges) will be kept.

It can be said that there are a variety of wallet types to choose from.

Below we will discuss the working principle of digital wallets, discuss different types of wallets, and give some suggestions on which wallets to use under which circumstances.

Which crypto wallet should I use? There are official wallets for most coins, but usually a multi-currency wallet like Ledger, Binance or Coinbase is the most practical solution. If you are looking for a web3 wallet for DeFi, please try MetaMask or TrustWallet.

 

Types of Crypto Wallet

Different encrypted storage options can be used for different purposes, depending on what you plan to do with encryption. For example, long-term Bitcoin investors who plan to hold Bitcoin as a store of value for a period of time may require the security of offline cold storage wallets. On the other hand, those who are actively involved in cryptocurrency transactions may want the convenience and speed that online hot wallets can provide.

Hardware Crypto wallet

These are sometimes called cold wallets or cold storage, and they store your keys completely offline on devices that are not connected to the Internet. Many popular cold wallet devices look similar to USB drives. Sometimes, paper wallets—where you print information about public and private keys on a piece of paper—are even used as cold storage.

Encryption enthusiasts often regard cold storage as the gold standard for protecting digital assets. Because they are offline, hardware wallets are the most difficult type of wallet to crack.

On the one hand, hardware wallets can easily be lost or misplaced. How many times have you lost a file-only USB drive before? This alone is inconvenient. However, losing the device with the investment key (which cannot be recovered once lost) may cause huge economic losses.

 

Software Crypto Wallet

These can also be called hot wallets. If you think that a hardware wallet is like a wallet you might put in your wallet, then you can think of a software wallet as your online bank account.

Hot wallets can take different forms. You can access one through the cryptocurrency exchange used to buy coins, download software programs to your computer desktop, and even use smartphone apps. However, since each of these options connects your public and private keys to the Internet, you may face a higher risk of hackers than using cold storage.

 

What crypto wallet is right for me?

We generally recommend using an official (or officially approved) wallet for any given coin. Therefore, for Bitcoin, we recommend using Bitcoin Core Wallet, for Litecoin, we recommend using Litecoin Core, and for Ethereum, we recommend using Ethereum Wallet or MetaMask.

Since a full official coin wallet may require users to download very large files, and since some people tend to own a large number of coins, it is better to look at alternatives.

For those who want to use or invest in multiple currencies, the universal wallet/multi-asset wallet/multi-currency wallet is a good choice. There are general software wallets such as Coinomi, Exodus, Atomic Wallet and Ethos, which usually have desktop and mobile application versions, and general hardware wallets such as TREZOR and Ledger Nano S (hardware wallets are usually good choices for long-term storage) ).

When choosing a wallet, you also need to decide between custodial and non-custodial wallets. In other words, for non-custodial wallets like Blockchain Wallet and MyEtherWallet, you can directly control your private key, but use the wallet as an interface, and you do not directly control your private key custodial wallet, such as Coinbase (although it is recommended that people Don’t keep all their funds on the exchange, exchanges like Binance usually double as custodial wallets).

Finally, you should also know that there are wallets designed for specific networks and their functions. For example, among other functions, Coinbase Wallet (Coinbase product), MetaMask, and TrustWallet double as Ethereum-based wallets, allowing you to store a series of Ethereum-based tokens, and also act as a web browser for a decentralized network (they allow You interact with the DApp).

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