The cryptocurrency industry has experienced explosive growth over recent years as established investors and curious newcomers join the bandwagon in record numbers. All of that was boosted by the data decentralization of blockchain technology. But what’s important to remember is that aside from making savvy investment decisions in the first place, nothing matters more than storing your crypto safely and securely.
Knowing how to store your tokens correctly could spare you the nightmare of watching some or all of your assets wiped off the face of the earth. A high-security, high-reliability cryptocurrency storage solution is the only thing that stands between you and potentially catastrophic losses.
It’s worth remembering that, at its core, crypto has more in common with conventional cash than any other form of currency. When you lose cash, it’s gone for good, and you can do nothing about it. The same applies to crypto, which is almost entirely irretrievable.
This is why storing your tokens in a suitably secure and reliable wallet is essential. A good wallet will keep your crypto safe from the thieves and hackers who want to take it from you, along with accidental data loss and corruption that could flatline your assets.
What Are the Different Types of Crypto Wallets?
There are four primary types of cryptocurrency wallets – desktop, mobile, hardware and paper.
- Desktop Wallets – A desktop crypto wallet is a software package downloaded onto a standard desktop or laptop computer, which enables you to store your cryptocurrency locally on a specific device. Local storage brings an extra layer of security compared to online storage, as there is a lower risk of hacking. In addition, the user can encrypt their wallet, ensuring only those who know their password can access it.
- Mobile Wallets – Mobile cryptocurrency wallets work similarly to desktop wallets, though the software is designed to work on a mobile device instead of a conventional computer. The wallet works similarly and brings the same benefits, but with the bonus of being more portable.
- Hardware Wallets – These differ from desktop and mobile wallets because they are purpose-built, standalone devices designed to store cryptocurrency. They can be connected to computers via USB, and interacted with in the same way as a desktop or mobile wallet. Investors typically use hardware wallets with larger and more diverse portfolios of cryptocurrency tokens.
Paper Wallets – As the name suggests, paper wallets involve physically writing the private key for your wallet on a piece of paper that can be stashed away in a safe place. There is zero risk of hacking, corruption or malware attack with this method, but if any of these physical papers are lost or damaged, the tokens are gone for good.
