Since the dawn of humanity, people have been using wallets as a means to store their money. Regardless if we’re talking about gold coins in bags or paper money in the wallet, they are a necessity in our lives.
Similar to that, in recent years with cryptocurrencies’ increased attention and popularity, developers have been working on wallet intended to store them. Even though they serve the same purpose, to store funds, these wallets work differently. Also, there are several different types of them.
This article will outline those type of wallets, their advantage and disadvantage, as well as situations in which you would normally use them.
The first question most people ask is: Do I need a wallet for my altcoins? The answer is straight and simple: Yes, you do.
Online altcoin wallet
The most obvious choice for an altcoin wallet is the online one. That is because it is the most commonly used. The reason for that is because you can access it from anywhere as long as you have a device connected to the internet. You’d need to navigate to the wallet’s website, log in and you’re good to go. The online wallet is often considered as the least secure. That is because the security of it depends on the connection that you’re using at the moment or the device you’re logging from. So, if you’re using a public Wi-Fi or someone else’s device, then there might be a security problem.
Another thing to watch out for is scam wallets. In the past several years, loads of fake wallets have surfaced on the internet, and a lot of people got burned. So, if you want to use an online altcoin wallet make sure that the one you choose is a legit one.
Mobile altcoin wallet
The principle behind the creation of a mobile altcoin wallet is that you have with you at all times. Your phones wherever you go, so your wallet will be as well. At first, it might seem like a good and practical idea. You can use your mobile wallet to make payments in places where cryptocurrency is accepted. Sounds perfect, but the biggest issue is your phone’s security. If you don’ have an authentication service enabled and your phone gets stolen, you can kiss your altcoins goodbye. Overall, it is a more secure option than the cloud wallet, but there are precautions that you need to take.
Desktop altcoin wallet
This altcoin wallet is the one that you’d use on your computer. The approach to this is identical to a mobile one, where you install it on your computer and get access to your wallet from there. Computers are harder to steal than mobiles, but they are a lot easier to get hacked. Even if you have a keylogger on your computer, the attackers will easily get your login credentials to your altcoin wallet.
Hardware altcoin wallet
The general idea behind this type of wallet is similar to an actual money wallet – you have it with you at all times. The thing that separates both of them is that the hardware altcoin wallet is a USB drive with the keys on it, both private and public. The advantage is that the USB drive is offline most of the time, thus removing the risk of getting it hacked as easily as the others. One thing that may get you thinking is the price. The USB drives are not free and are certainly not cheap, but if you want your altcoins to be safe, it might be worth it.
It isn’t a perfect solution, though. USB drives can be lost or broken and replacing them will cost. It does provide more protection than the previous types of altcoin wallets.
Paper altcoin wallet
If you’re looking for the safest wallet for storing your digital currencies, the paper altcoin wallet is the safest one. You have both the private and public keys printed on a piece of paper that you can carry it with you in your wallet for money. It might seem like an old school approach, but it is the safest one. You can use the public keys to send someone money or the private ones to withdraw funds. Alternatively, you can scan the QR codes printed on the paper.
The biggest downside to the paper altcoin wallets is that if you keep the keys and codes on a piece of paper, it can be damaged easily.
Conclusion
As we already established, using an altcoin wallet is the smartest move you can make to keep your digital currency safe. This article, as well as the outline of each type of wallet, should give you enough details to help you decide which type you want to use.
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