Several types of wallets are used to store cryptocurrencies safely and make them available to transfer and receive. These digital wallets are a software program that holds the Blockchain private and public keys safe with different encryption methods. The wallets also facilitate the transactions of stored currencies by sharing and communicating with the Blockchain server. It enables the user to monitor as well as send and receive different cryptocurrencies.
It is difficult to decide when it comes to choosing the safest storage place for digital assets. In this article, I’ll evaluate all available wallets in the market according to their convenience and security level, to help you pick the correct wallet according to the requirements.
Desktop Wallet or Cold Storage
Cold storage aka offline or desktop wallet is one of the safest media to store the Bitcoin or any other cryptocurrencies. Such wallets could be easily downloaded on any compatible desktop computer and they are not connected to the Internet. In comparison to online wallets, the Desktop wallet offers numerous advantages. As these wallets are not directly connected with the Internet, it eliminates the risk of being hacked or exposed to the private keys. The transactions could only be made by accessing the desktop where the wallet installed. However, in case of any malicious infection in the system or corruption of hard drive, the fund stored may never be accessed.
Hardware wallets the most favored, robust and safest way to hold Digital currencies. The Hardware wallet stores the private keys in a separate USB type external device. They provide a more secure environment than Offline wallets. Furthermore, a hardware wallet is compact in design hence it could be easily carried and used with any compatible system to access the digital currencies stored. The hardware wallets could be used to make online transactions, however, the security keys are always kept offline. It ensures that the wallet is not prone to any online theft and the funds are always safe from any malicious attacks. The Hardware wallets can support numerous web-based software also several digital currencies could be stored. Even at the event of losing the Hardware wallets, the users can retrieve their funds by using backup seed. Ledger Nano S and Trezor are the two most popular and leading Hardware Wallets available in the market at attractive price tags.
Considering the monetary value associated with Hardware wallets and the use of an external device while making a transaction, the online wallets could be a more easy and convenient medium. The online wallets store data and run on the cloud and hence accessible from any device from any location globally. Online wallets are the most convenient ways to make transactions of cryptocurrencies and offer many benefits over the Hardware and offline wallets. Although web-based wallets are easy to use, they are subject to several risks. Online wallets store the private keys online with direct control of third-party vendors and make it vulnerable to online risks like hacking and theft. Also, if the server or system of provider compromised, you may lose all of your funds. Nevertheless, you can reduce the risks to an extent by taking some security measures such as the use of a reliable vendor, not disclosing your PIN/Password, using an anti-malware program, etc.
Every wallet has its pros and cons, and they are useful and convenient according to the use. While the Hardware wallets are somewhat outdated, they are still vital resources if you use a single computer system and not access the wallet from different places frequently. The Hardware wallets overcome the drawbacks associated with Desktop wallet; however, they cost around a hundred dollars. The online wallets eliminate the requirement of carrying a physical device in order to access the stored funds and typically available for free. However, they are more vulnerable in comparison to Hardware and Offline wallets and pose a considerable risk of online theft.
Although no wallet claims 100% security if you do not requirements with the safe carrying while making transactions of cryptocurrencies. The hardware wallets are highly recommended to store dormant cryptocurrencies which not being used for frequent trade. It will keep a part of your digital asset safe in an unfortunate event of hack or theft.
Disclaimer: This article is for informational purposes only. Neither the company nor the author is responsible, directly or indirectly for any damage or loss caused by and in connection with the use of or reliance on any content, goods or services mentioned in this article.