If you want to use any cryptocurrency then you will need to have a digital wallet. Crypto wallet is a software program that stores private or public keys and interacts with various blockchains so that the users can transfer digital currency and monitor their balance.
Crypto currency wallets are being used by millions of people. But these digital wallets do not work as traditional pocket wallets. In crypto currency wallets, currencies are not stored in a single place. Currencies don’t exist in a physical form in crypto wallets. In fact, the records of transactions are stored in blockchain.
There are various kinds of crypto wallets. They are mainly divided into three categories – Software (mobile, desktop or online), hardware and paper.
Mobile wallets are simpler and smaller. Mobile wallets can be run on an app in phone which can be used almost everywhere including retail shops.
Wallets can be installed on your desktop or laptop. It offers highest levels of security. But if the desktop or laptop gets hacked or gets a virus you may lose all your funds.
Crypto wallets can run on the cloud. You can access them from any computing device in any part of the world. But online wallets store your private keys online and is run by a third party which makes it less secure.
Wallets can be stored in hardware devices like USB. Hardware wallets are stored offline which provides highest security. Although the transactions are made online. Hardware wallets are very compatible and can support different currencies. It’s pretty simple and easy as you just plug in your USB on any internet-enabled device, enter your pin and send or receive your money. You can easily transact your money keeping it offline and safe.
Paper wallets simply refer to a printout or a physical copy of your private keys. It is a piece of software which securely generates keys which are then printed. If you want to transact all you have to do is transfer your currency from your paper wallet to your software wallet.
The security level of crypto wallets depend on the type of wallet. So it’s up to you which wallet you choose.