For those who are already familiar with blockchain technology and cryptocurrencies, it’s time to dive deep in the infrastructures that make up the crypto network. A very important part is the crypto wallets. In fact, Bitcoin relies on its crypto wallet for its very own existence. But what are crypto wallets, exactly?
Crypto wallets are designed differently depending on the crypto platform that they are associated with. Their security, services, and features could vary greatly. Bitcoin’s crypto wallet is quite different from that of Ethereum, for example. If you want to know which crypto wallet works best for you, you should know the general functions of a crypto wallet first.
What is a Crypto Wallet?
Basically, a crypto wallet is just like your regular bank savings account where you can make deposits and withdrawals. Crypto wallets also keep a record of all your transactions – these are actually tracked by the blockchain ledger of the cryptocurrency.
Generally, crypto wallets can store different types of cryptocurrencies by assigning alphanumeric codes for each. Users also get a unique crypto wallet address via QR Codes that are readable by mobile phones. This unique address allows crypto wallet users to send and receive cryptocurrencies from other wallets as well.
Different types of crypto wallets have different types and levels of security features. Most crypto wallets use PIN Codes, but some utilize passphrases, private keys, and even multi-signature functions. All these are designed to protect crypto wallet accounts from hackers, scammers, and phishing activities.
Wallet Keys
Since crypto wallets have a unique address code, a wallet key is needed to officially complete transactions within the wallet. This is like a password in an email address, and it is also composed of a series of numbers and letters. The wallet key is a code that is generally generated by your chosen crypto platform, and if you lose or forget this code, your wallet activity will be paralyzed.
Types of Crypto Wallets
There are several types of crypto wallets and they all differ in terms of function and security measures:
- Online Wallets
Online crypto wallets are the most common ones. They are generally free to use, but they also have the lowest security features. In fact, they are really designed for fast and convenient cryptocurrency transactions, that’s why they have thin security layers. Without encryption, they are more vulnerable to hacking and data breaches.
- Desktop Wallets
These are open-sourced wallet programs that you need to install on your PC. It usually consumes a big chunk of disk space because users are required to download entire blocks from the very start.
Desktop wallets are however more secure than Online Wallets because it utilizes private keys that are stored and encrypted on your PC. This is also protected by your antivirus software.
- Mobile Wallets
Mobile Wallets are relatively a new type of crypto wallet, but it has been gaining a lot of traction because of its convenience. With just a few taps, you can clear up some storage space for your mobile wallet within a blockchain network. Users can easily check their balance and do transactions on a mobile wallet, and they are secured because of constrained runtimes.
- Paper Wallets
You can print out your address code and a private key in a piece of paper and keep it in a safe place to keep your wallet fully functioning. The only downside is, you might lose the paper and misplace your details forever.
- Hardware Wallets
This is the most secure type of crypto wallet in terms of security. Hardware wallets or HD wallets come with layers of security measures that include PIN codes, passwords, passphrases, keys, and so much more. The only downside is that it comes with a high price (ranging from $50 to $500).
Most Famous Crypto Wallets
Of course, there are major players when it comes to the crypto wallet industry. Each has its own features, services, cryptocurrency support, and layers of security and protection.
Blockchain.com
Blockchain.com is the largest online wallet in terms of user activity and transactions. It allows users to easily swap and exchange different types of cryptocurrencies. It supports major cryptocurrencies such as Bitcoin, Ethereum and Stellar. Blockchain.com is also secure because it utilizes private keys that are encrypted.
Electrum
Electrum is an easy-to-use desktop wallet that also uses private keys to secure accounts. The program and data can be downloaded on PC, so you can still generate your account on offline mode.
Copay
Copay is one of the most famous mobile wallet platforms, and it is an open-sourced one. This means that you can access the code and create your very own version with additional security measures. But it’s not just that, users love Copay in its original form because it is simple and easy to use. It also supports multi-signature security features too.
Are Crypto Wallets Safe and Secure?
That would depend entirely on the platform that you choose to use. Some types of crypto wallets, such as the online and desktop types, back-up your information on platforms and databases that can be accessed by third-parties and hackers. This is how your crypto wallet becomes very vulnerable.
Hardware and open-sourced wallets are however more secure due to its multi-layer security features and personal data encryption. Online wallets – especially the free ones are the riskiest.
However, if you want a bit of introduction as to how crypto wallets work, you can start with free online wallet platforms to get acquainted with the process. Free accounts are still great for fast and small transactions. If you have large crypto accounts and you like to trade and deal in big amounts, a hardware wallet or open-sourced mobile wallet is best (and safer) for you.
Email: 
