WikiCoin: Cryptocurrency Wallets

  • Katya Michaels
    📚 WikiCoin

    When it comes to cryptocurrency wallets, research your options and pick a strategy.


WikiCoin: Cryptocurrency Wallets

Signing up for a wallet to hold the Bitcoin you buy sounds simple enough, but there is a variety to choose from as well as some nuance to available features. To make sure that your cryptocurrency is safe and avoid unpleasant surprises, use our wallet guide as a starting point for your research.

Although you need a wallet to store your coin, what it’s actually holding is your private and public keys that give access to your Bitcoin address. Many investors have multiple keys and multiple wallets serving different purposes. Some choose to store most Bitcoin in a secure offline wallet, leaving a small amount online for transactions. Whatever approach you choose, always keep your keys safe, back up everything and review your strategy often.

Online (cloud-based) wallet

Online wallets are very convenient, easy to set up and usually free to use. The tradeoff is lower security; your keys are stored in the cloud, so you are reliant on the host’s security and integrity. Popular online wallets like Coinbase and Blockchain are integrated with exchanges.

Software wallet

If the wallet software is downloaded and installed on your own computer, it gives you the increased control of holding your own keys. On the other hand, you are responsible for your own security: if your computer is hacked, lost, broken or stolen you can lose your Bitcoin.

Mobile wallet

A mobile wallet is an app on your phone, very useful for paying in stores or managing your Bitcoin from anywhere. All online wallets and most software wallets have mobile versions, while some others were created specifically for mobile use.

Hardware wallet

Hardware wallets are actual devices that connect to the web to complete transactions. They are very secure but can be stolen or lost together with the Bitcoin belonging to the private keys. Because of this, some serious investors keep their hardware wallets in bank vaults.

Paper wallet

Just what it sounds like, a paper wallet is a piece of paper where the private and public keys of a Bitcoin address are printed. These wallets are best for things like gifting Bitcoin or storing it for long periods of time. They are entirely offline, which makes them very secure, but again easy to lose.

See our CryptoTips for more advice and specific wallet recommendations.

Cover image via u.today
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