Cryptocurrency is an asset that has digital form only. Cryptocurrency is digital cash that has no physical existence and that is why some people think about where they should store their digital assets. The digital existence of cryptocurrency confuses many people about its storage. There are cryptocurrency wallets in the market where people can store their digital assets safely. Today we will discuss cryptocurrency wallets since there are many. If you think this topic can help you in your crypto investment journey, then continue reading.
Below is the list of cryptocurrency
wallets you must know if you are planning to invest in cryptocurrency.
Custodial Crypto Wallet: A custodial crypto
wallet is a default option for cryptocurrency storage. Your digital asset is
held by a third party when you keep your crypto coins in a custodial
wallet. Third parties hold your crypto in cold or hot storage. Crypto exchanges
and apps keep your crypto in a custodial wallet, thus custodial wallets are
issued and controlled by crypto exchanges or crypto apps.
One thing that you must keep in mind is
that there are only a few crypto exchanges that hold your crypto for you. Not
every crypto exchange holds your crypto. If you want an exchange that can hold
your crypto, then you have to research and buy crypto from an exchange that can
provide you custodial wallet facility. In a custodial wallet, you don’t have to
work for your crypto, it will be your exchange that will keep your digital
assets safe and secure with its custodial wallet.
Cold Crypto Wallet: Cold wallet doesn’t
work online, it works offline and this is the reason most crypto investors
choose a cold wallet. There are different methods of cold wallets like hardware
wallets and paper wallets. Using the hardware method of cold wallet is way more
secure. Hardware crypto wallets are always considered the safest since they
work with transparency and reliability. Hardware wallets are tiny devices just
like a USB drive and you can connect them with your computer system and can
generate the address to receive crypto to your wallet.
You can keep your digital asset
completely safe by using hardware wallets. Hardware wallets protect your
digital asset in the best possible and secure ways. Hardware wallets work
offline and this is what makes them safe and secure. Hardware wallets are the
safest if you want to keep your crypto safe.
Hot Crypto Wallet: Your digital assets
are stored online in hot crypto wallets. Hot crypto wallets are applications,
therefore they work on online modes only. Since hot wallets are applications,
they are available on desktops and mobile devices. In hot wallets, you get the
authority to control your virtual currency. Hot wallets also work well
in the crypto market. The reason people go with hot wallets is that they
are free and easy to use. Hot wallets have recovery phrases just like hardware
wallets. In case you lose access to your crypto wallet, you can get it back
with the help of recovery phrases.
If you don’t want to spend on a crypto
wallet, then you can keep your crypto in hot wallets. People who keep their
digital assets in hot wallets do this at their own risk. If you lose your
crypto with a hot wallet, there is no other way to recover. You have to make
smart choices when it comes to storing your cryptocurrency. Hardware wallets
are considered more secure and safe than this one. Investing your money in a
crypto wallet is worth it as it is the only way to keep your crypto safe.
Physical Crypto Wallet: Physical wallet is
a kind of cold wallet and is also known as a paper wallet. Physical crypto
wallets are the printouts of public and private keys. In order to receive
cryptocurrencies with a physical wallet, you need to use public keys. To send digitalcurrency from a paper wallet you need to scan public and private keys.
Paper wallets are offline like hardware wallets, therefore, you will get
similar benefits from them. You can keep your crypto in a paper wallet without
a second thought as they are secure, transparent and reliable.
Stay connected to get an in-depth
understanding of the crypto market.
