A cryptocurrency wallet is vital to the use of digital monies. One is required for any and all transactions, and the security they provide protects user’s financial information. As cryptocurrency is still a developing technology the decision in what wallet to use can be daunting. There are a wide variety of choices, and each has a different function. Here is everything one needs to know to make an informed decision on the type of wallet to use.
Cryptowallets can be designed for multi- or single use. Most investors in the cryptocurrency market keep to one type of digital coinage. Bitcoin is the popular kid on that block. Single use wallets function as a place to store a specific type of currency. This means if you deal in bitcoin you have a specifically designated wallet for bitcoin. This wallet will not hold anything else. Multi-use wallets can store more than one type of virtual currency, they are beneficial if your investments also deal in multiple types of virtual coinage. There is no limit to the number of wallets you can have, but it does have the tendency to get confusing. Once you have figured out the compatibility of your wallet, it is time to focus on the storage aspect.
Cryptocurrency wallets can be stored in a variety of ways. Each way revolves around a specific key used as access. This key is created by the blockchain technology used to secure the wallet itself. The main choice to be made in storage is accessibility. Each type has various pros and cons. The first is desktop. A desktop wallet exists on laptops and home computers. It can only be accessed through that specific computer but provides very confident security. It also means the information can only be accessed through that computer, which limits its accessibility. The security it provides is beneficial, but should anything happen to the computer itself the financial data would be lost. Virtual wallets are available online using cloud technology. They can be had through use of a third party and offer great versatility. The fact that they are completely virtual makes them more vulnerable than physically located wallets. Virtual wallets are only as good as the companies themselves, but many like Abra are very dependable.
Mobile wallets are akin to desktop wallets but are downloaded onto mobile devices. These devices are usually smart phones or tablets. The great thing about mobile wallets is they carry the security of desktop wallets and marry it with the accessibility of virtual wallets. This affords both convenience and security. It also has the same drawbacks as desktop wallets. If the phone is lost the information is gone as well. Hardware wallets are stored on portable software like USBs. They function just like mobile wallets and afford the same security, but also have the same con. If the USB is lost so is the wallet. Paper wallets are probably the most secure as the key is printed out on an actual piece of paper. It also constitutes the most hassle as the key has to be manually entered or scanned.