Cryptocurrency Wallets(Pros & Cons)

Cryptocurrency Wallet is a safe keep that is useful for storing private and public keys. It is useful in tracking ownership, spending, and receiving cryptocurrencies. You can use these keys to make transactions with your cryptocurrency.

Types of Cryptocurrency Wallets

There are five types of cryptocurrency wallets available. They vary based on security, convenience, accessibility, features, average cost, and so on. They include:

1. Hardware Wallets

These wallets are like USB devices that have an OLED screen. Hardware wallets come with side buttons to go through the interface of the wallet. They have their native desktop apps or software for various cryptocurrencies. They do not use a battery and can be to laptops or mobile devices through USB, even if it’s an infected device.

The average cost of hardware wallets falls in the range between $70-$150. It is worth every cent when considering the security of your cryptocurrencies. Good examples of hardware wallets include Trezor and Ledger Nano.
Hardware wallets are considered as one of the safest ways of storing your cryptocurrencies.

Pros
One of the most secure wallet options.
It is outstanding cold storage for large amounts of cryptocurrencies.

Cons
Most expensive cryptocurrency option
Limited accessibility.
Not as convenient as other wallets, especially for beginners.

2. Paper Wallets
Paper wallets are a bit technical and need a high level of caution from the wallet user. That is because you print your public addresses and private keys on a piece of paper. So you begin transferring your cryptocurrencies on it and making transactions with them. Paper wallets are great storage since they keep your private and public keys offline. Furthermore, paper wallets are the second most secure way of storing your cryptocurrencies.

Pros
Super hacker-proof.
Free cold storage and very safe.
Not kept on a third-party server.

Cons
Hard to use for daily trading.
Not convenient for non-geeks.
Risk of getting caught up with fire.

3. Desktop Wallets
Desktop wallets come in the form of installable software packs. They are available on computer operating systems, such as Windows, Mac, and others. Many cryptocurrencies tend to launch their desktop versions of wallets on the system. If you often connect your desktop online, it is good for you to use the necessary security measures. Security measures are taken, such as installing anti-malware and antivirus software and having a secure firewall.

Desktop wallets are the third safest way of keeping your cryptocurrencies. Examples of desktop wallets include Exodus, Electrum, Bitcoin Core, Jaxx’s Chrome Extension.

Pros
Convenient for users who trade from their desktop
Private keys and public addresses are not kept on a third-party server
Great safe storage if your computer isn’t connected to the internet.

Cons
Harder to trade cryptocurrencies on the go
It becomes a less secure wallet if connected to the internet.
Without backup, if the computer dies, you are at risk of losing your cryptocurrencies.

4. Mobile Wallets
These wallets are currently the most used in the cryptocurrency market. It is because they are mobile-based, which makes them accessible and also easy to use.

There are lots of mobile wallets that are compatible with both iOS and Android. But for the less popular cryptocurrencies, you may get a decent Android version, at least.

But, before trusting any mobile wallet, you need to do the due diligence. Try checking out for the following factors with the mobile wallet such as:
i. Ease of use: it should have an elegant user interface for ease of use.
ii. Private keys: it should own wallets where you can access your private keys.
iii. Development community: the development community needs to be active.
iv. Backup and security: features for backup and restoration must be available.
v. Compatibility: make sure the wallet is compatible with different operating systems.

These wallets are the fourth safest way of keeping your cryptocurrencies. They are always internet-connected (also known as hot wallets) and are at risk of online hacking.

Examples of mobile wallets are Coinomi, Mycelium, Spectrum, etc.

Pros
Quick accessibility and convenient to use.
Extra features are available like QR code scanning.
Quite safer than web or online wallets.

Cons
Risk of cryptocurrency loss if the mobile device gets damaged or lost.
Possible event of mobile viruses or malware.
Less safe if connected to the internet.

5. Web Wallets
Web wallets are cryptocurrency wallets that are in connection to the internet. They are accessible through browsers like Firefox and Google Chrome. You can visit URLs or web addresses such as https://xyz.com.
There are web wallets that have to host and non-hosted; this depends on the type of wallet you are using.
But for the sake of security, it is better that you use non-hosted wallets rather than hosted ones. It is easier to control your funds.
Few examples of non-hosted wallets include MyEtherWallet, MetaMask.

Some hosted wallets include Coinbase, CEX.io.
Web wallets are the least secure type of cryptocurrency wallets. Especially if you are using a hosted wallet because they are only safe for as long as they do not get hacked or DDOSed.

Pros
They use 2-factor authentication for security.
Fast transactions enabled.
Has the capacity to manage many cryptocurrencies.
Convenient to use, especially for active trading.

Cons
At the risk of online insecurities such as scams and hacks.
At the risk of personal safety from computer viruses and other possible exposures.
A third party and not you are storing your cryptocurrencies.