A cryptocurrency wallet is digital software that stores all your hard-earned digital currency. Not just that, it also secures your private keys so that your Bitcoin is safe. A Bitcoin wallet is an essential part of Bitcoin trading and you need to have a Bitcoin wallet to start crypto-trading. There are so many different kinds of Bitcoin wallets to choose from. Let me tell you about each type, online wallets and others, and also their respective pros and cons.
People sometimes argue that online wallets are the least secure types of wallets. Having that said, it has it’s own set of advantages. The online wallet allows you to access your cryptos as long as you are connected to the internet. As long as you are connected to the internet you can easily perform all the activities like doing transactions and storing Bitcoins. The online wallets keep your keys secure in its server; it may send your crypto code so that you can get access to your keys.
Pros of online wallets
- Easy and quick transactions
- Conveniently used for active trading.
- Manages multiple cryptocurrencies in one go.
Cons of online wallets
- High level of threat like hacking and scams
- High computer risks from the virus.
- Not you, but a third party is storing your private keys!
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Mobile wallets are the most convenient source of Bitcoin transactions through the app on your phone. Just like you use Apple pay or Google pay in your phone for making transactions, the same goes for Mobile wallets. You can very easily use this mobile wallet for making transactions sitting anywhere just by pressing a button. This is similar to online shopping, paying utility bills or booking a movie ticket. Mobile wallets are for mobile transactions only.
Pros of Mobile wallet
- An advanced additional feature of QR Code scanning.
- Much better than an online wallet (according to some people).
- Very convenient to use.
Cons of Mobile wallet
- The great risk of viruses or malware.
- Huge chances of losing cryptocurrency if your phone is lost or damaged.
A desktop wallet is a good choice if the security of crypto is of high concern for you. It is a much better option than an online wallet any day. All you have to do is to download the desktop wallet and install it on your desktop. It is better if it does not have an internet connection to it, as it then basically becomes a cold wallet. Trust me; cold wallet is the best choice to keep your cryptocurrencies secure.
Pros of Desktop wallet
- Very safe if the computer is offline (not connected to internet).
- Your private keys are secure with you, not the third party
- Best choice for computer crypto-traders.
Cons of Desktop wallet
- If you do not want to backup your computer and it dies, all your cryptos are gone with it.
- If you connect it with the internet, then its level of security goes down.
- It is hard to use on your crypto-assets on the go.
Hardware wallets are the safest wallets. With its private keys stored in the USB, it can be called as a kind of cold wallet. However, it is connected to computers and smartphones for use, but still, it remains offline most of the time, which makes it the safest Bitcoin wallet.
Pros of Hardware wallet
- The safest form of wallet.
- Best for a large number of cryptocurrencies without any fear.
Cons of Hardware wallet
- Not user-friendly.
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