The Beginner’s Guide Cryptocurrency Wallets – Types and Selection

By Alex Mardikian

If you’ve made up your mind to take the plunge in the world of cryptocurrency, then you need a place to store that currency. It’s digital currency and it needs to reside somewhere. Bitcoin and altcoins reside in wallets. Of course, these are wallets only in name and not at all like the ones we carry in our pockets.

There are different types of wallets available, and when selecting a wallet you must consider safety, anonymity, and ease of management.

What are desktop wallets?

These are downloaded onto personal computers and provide users with private keys for accessing your public bitcoin address so that you may execute transactions. Since the private keys are stored on your hard drive, these wallets offer better security as compared to mobile wallets. If you trade smaller volumes from your computer, then desktop wallets are a good option. Electrum, Exodus, Bitcoin Core, and CoPay are examples of desktop wallets.

What are mobile wallets?

If you transact with cryptocurrency on a regular basis, either trading in altcoins or making purchases using digital currency then you are better served with mobile wallets. The wallet is in the form a mobile app and you store private keys on this app. You can make payments directly through the app. Some apps are equipped with NFC, which allows you to execute transactions with a tap, without having to punch in any information.

Mobile wallets use Simplified Verification Technology (SPV) to access only the relevant sections of the blockchain ledger. Mobile wallets can be hacked because of internet connectivity. You may also lose control of the wallet if the mobile gets lost or stolen. Airbitz, Bitcoin Wallet, Free Wallet, and Jaxx are popular mobile wallets.

AltCUBE mobile app, the altWallet, is the latest entrant and comes with a clutch of advantages over other apps. It connects to the altCUBE Kiosk that, among other things, lets you transact easily. The Kiosks are a part of a global network of ATMs and Cubes that are lowering entry barriers to cryptocurrency trading

What are web-based wallets?

Web wallets store information on web-based servers. Web wallets can also be linked to mobile and desktop wallets. You can access the keys and addresses from any of the devices that you link to the wallets.

These web-based e-wallets let you access your altcoin accounts while on the move. But the risk of a third-party gaining access to your accounts and funds therein is always there.

Much like mobile wallets, e-wallets enable their users to access their funds on-the-go from any device connected to the Internet. But unless implemented correctly, the organizations running the website might gain access to your private keys, thus getting total control of your funds. Moreover, some e-wallets are operating on the base of exchanges, and there have been instances of exchanges shutting down and running away with their users’ funds.

What is a hardware wallet?

A hardware wallet is the safest alternative because it stores information in a secure device that is safe from malicious attacks and viruses. The funds cannot be siphoned off, and till date this option has been the most secure. Screens on hardware wallets, although not all wallets have them, provide added security because these can be used for checking important data. Ledger and Keep Key are among the most-used hardware wallets.