Cryptocurrency Wallets: Types of Crypto Wallets and Best Crypto Wallets

Cryptocurrency is an important asset which allows users to store and retrieve your cryptocurrency. To safeguard your wealth, it is important to get a reliable cryptocurrency wallet with security features. This article will introduce what cryptocurrency wallets are, types of crypto wallets and best crypto wallets in the market.

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What is a cryptocurrency wallet? Is it safer to use a cryptocurrency wallet?

A cryptocurrency wallet is a digital wallet that allows you to store and retrieve your cryptocurrency assets. If you purchase cryptocurrency through cryptocurrency exchange, the crypto that you purchase will only be stored on the platform. In case the brokers go busted, you are unlikely to be compensated for your loss as crypto trading is not regulated in Hong Kong. Therefore, a growing number of investors would rather own his or her own wallet for safety and accessibility sake. It is only by keeping your own private keys can it give you access to your cryptocurrencies, which is suitable for long-term investors.

Types of cryptocurrency wallet

Though there are 3 main types of crypto wallets, including paper wallets, hardware wallets and online wallets, they generally fall into two main categories: hot and cold wallets.

Hot wallet

Hot wallet (known as software wallet) is a form of digital storage that investors can access on their digital devices, and is connected to the internet.

Cold wallet

A cold wallet, also known as a hardware wallet or cold storage, is a physical device that keeps your cryptocurrency completely offline. Many look like USB drives. Because it doesn’t have an internet connection, cold wallets are more secure than their hot wallet.

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Best crypto wallets: cryptocurrency wallet recommendations

Coinbase

Founded in 2012, Coinbase is an American publicly traded company which operates a crypto exchange platform. It also offers a simple, easy-to-use hot wallet - which supports a wide range of cryptocurrencies.

Blockchain

Founded in 2011, Blockchain is a well-established company offering hot wallets which are accessible from web devices, and the privacy and identity of the user are maintained. It is popular, with over 71M wallets created and more than $800B in transactions.

Robinhood

Robinhood was founded in 2013 and it lets investors buy crypto easily and you can store your digital currency in its own wallets.

Bitpay

Founded in 2011, Bitpay offers a secure, open-source, and a non-custodial cryptocurrency wallet.

Electrum

Founded in 2011, Electrum, also known as a bitcoin wallet, is a hot wallet - which is designed to work primarily with bitcoin.

Exodus

Exodus can be a hot/ cold wallet which allows you to plug into different crypto exchanges.

Bitcoin Wallet

Since 2011, Bitcoin wallet offers a simple and secure way to buy, sell, trade, and use cryptocurrencies. It also offers a crypto wallet to store crypto.

KeepKey

KeepKey is a web-based interface for managing your crypto. It is a once-independent hardware wallet that was acquired by ShapeShift (which is a cryptocurrency exchange) in 2017.

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Things you should know before getting a crypto wallet

Keys are written on a physical medium like paper for paper wallets - which makes it difficult to keep. Therefore, it is least recommended among all crypto wallets. However, if you lose your key, you end up losing all access to your crypto.

FAQ

What is a crypto wallet?

For investors who would like to level-up to a more secure option, they can purchase a cryptocurrency wallet. They generally fall under two main types: hot and cold wallets. Crypto wallets keep your private keys which give you access to your cryptocurrencies.

What is the difference between a cold wallet and a hot wallet?

The major difference is that a hot wallet is connected to the internet while a cold wallet is not. Keys are stored in a USB like device for cold wallet that will only be connected to a computer when you would like to use your crypto.

How do I store my cryptocurrencies safely?

It is safer to store crypto in a wallet than on a cryptocurrency exchange. Using a wallet requires more time and effort when setting it up, but it is worth the hassle for long-term investors.