Estimated reading time: 5 minutes, 1 second
Now that you have your cryptocurrency, you need someplace to store it! Cryptocurrency wallets are applications or devices used to hold your cryptocurrency, providing you varying degrees of security and accessibility. Jeremy goes over these wallets. and the different types of cryptocurrency wallets. There are a bunch, so pay attention!
For more information on wallets, check out our Essential Wallet Guide! For more information specifically on hardware or software wallets, click those links! And we also have reviews within those pages on a variety of wallets! To learn more about cryptocurrency, check out our WTF is Crypto page! Let us know any questions you have & make sure to give this video a “like” if you enjoyed it!
Got your cryptocurrency? Great! Now where do you keep it?
The answer isn’t so simple. There are actually multiple types of cryptocurrency wallets, each with specific uses. So depending on how you want to store your crypto, or how accessible you want it, there’s definitely a wallet option for you.
Before we start exploring the different kinds of wallets, let’s quickly run through what a cryptocurrency wallet is. Simply put a cryptocurrency wallet is the equivalent of a bank account. It allows to receive crypto, and then send it to other wallets.
Here is the interesting part… Wallets don’t actually store your crypto; it stays securely on the blockchain. A wallet is just a graphical interface that easily allows you to manage your address and store your keys. Not all cryptocurrencies can be stored in one wallet. There are some wallets that are currency specific, and some support multiple currencies.
When you’re talking about security, there is an important thing to remember. As long as you have control of your private keys, you have full control of your crypto. That’s exactly why we don’t recommend keeping your cryptocurrency on an exchange, because they have control of your private keys, not you!
Cold Storage Cryptocurrency Wallets
One of the most secure ways to store your crypto is a hardware wallet. These are physical devices, usually the size of a thumb drive, that act as a vault for your digital money. While keeping your money in a vault is the safest method, it doesn’t make for the easiest to use transactional wallet. Popular hardware wallets include:
Along the lines of hardware wallets, one of the single most secure way to safely store your cryptocurrency is in cold storage via a paper wallet.
Basically what you are doing with ‘cold storage’ is keeping your cryptocurrency offline. It’s not on the web or any computer. It’s just there, suspended until you are ready to restore a wallet using your seed phrase or private keys.
Again, this makes it very hard to conduct basic transactions. However, there is an option for you if you’re looking for a wallet for every day spending.
Mobile Cryptocurrency Wallets
Mobile wallets allow you to store your cryptocurrency right there on your phone. Need to pay for something? Just whip out your phone, open your wallet, enter an amount, and scan a QR code. It’s a four step process that takes about a minute, of course depending on which blockchain you are using. ERC-20 currencies, among others, are more conducive to acting as simple transactional currencies since they have shorter confirmation times. Basically that just means you have to wait less time for your transaction to go through. You don’t want to be stuck in a situation where you pay for something using bitcoin, and then have to wait ten minutes standing there before your transaction goes through.
It’s your best resource for crypto on-the-go. Mobile wallets include:
Desktop and Web Cryptocurrency Wallets
Another type of wallet is desktop or software wallets. Some projects allow you to download wallets directly from their website. They offer their own software client, but require you to be at your computer for use. You’re downloading a specific software client that allows you to interact with the blockchain.
Similar to desktop wallets, web wallets provide a website that allows you to interface with the blockchain. While many projects also provide web wallets, there are several popular websites that offer multi-token web wallets.
The only issue with web wallets is that they are especially susceptible to phishing. That’s when someone creates a look alike website, and some of these are pretty much clones with very similar URL addresses. These fake sites have a login section that records your password, takes it to the real web wallet, providing the phisher with full access to your funds. There are a couple of ways to defend against phishing. The first is not to click on any unknown links and ALWAYS check the web address you type into the URL bar. Learn more about phishing scams and how to avoid them with our run down.
We also recommend that you download Metamask, using it together with web wallet. Metamask automatically blocks these fake websites, making it a great last line of defense. I always double check my web addresses, but no ones perfect. Metamask provides an extra layer of security that will block these phishing sites for you.
Let us know which wallets you prefer in the comments below our video! There are all types of cryptocurrency wallets, eac with their own strength. We’re curious to hear what you think! What type of cryptocurrency wallet do you prefer, and for what purpose?
WTF IS is our new series where we explore some of the most frequently asked questions about blockchains, cryptocurrencies, and the technology surrounding these fields. Looking to get acquainted with blockchain? Then WTF IS is the perfect series for you!
If you enjoyed this video and series idea, please give us a “Like.” And don’t forget to subscribe to our channel so you can stay tuned for more installments of WTF is and other series! Feel free to reach out too if you have ideas for us to cover!