The first thing you need to learn when you get into cryptocurrencies are the pro’s and cons of the different types of wallets.
There are 5 types of wallets:
- Hardware wallets
- Paper wallets
- Desktop wallets
- Mobile wallets
- Web wallets
Hardware wallets like Ledger and Trezor save the private keys securely onto a USB-device making it impossible to perform transactions without it. You can install software onto your mobile and computer to have access to the balances, but as the private key isn’t on the device it’s fully secured, even connecting it to a virus infected machine wouldn’t be a problem. That is no reason to slack on computer security though 🙂
If you plan on holding a good amount of cryptocurrency and planning to hold it for a longer time, then a hardware wallet is advisable. The added security more than makes up the extra steps needed to make a transaction.https://www.ledger.com/
Paper wallets basically means you make your own private key offline and save your cryptocurrency on it. It’s fully offline, so it is secured against hacks and such, but you need to safely keep the papers and it’s a bit of a hassle. For the people wanting to try it I’ll add a quick walkthrough.
Download the following page and disconnect your computer from the internet:https://www.bitaddress.org
After you’re disconnected open the downloaded page. The page generates a random address using the movement of your mouse, so keep moving it till it is at 100%. If it’s done go to paper wallet et voila you have your secure wallet. Some also use a Linux live CD to perform these steps to take away any chance of their private key being leaked by malware.
Unfortunately not every crypto has a paper wallet.
Desktop wallets are installed on your computer and since the computer is often, if not always connected to the internet the security mainly depends on your actions with it, your AV-software and firewall. A desktop wallet is easy to use and moderately secure.https://atomicwallet.io
Mobile wallets are commonly used as they’re very easy to use, but the ease of access and the fact that a smartphone is pretty much online 24/7 makes it a less secure option to store your crypto.https://www.coinomi.com/
Webwallets are the least secure way to store your crypto’s. Webwallets are also divided into 2 categories, namelijk hosted and non-hosted.
A non-hosted webwallet means the private key is in your own hands, while a hosted wallet is completely out of your own management. A company could basically pack it all up, or get hacked and you lose everyhting. So a hosted webwallet is a big nono and is to be avoided right? No, the ease of buying/selling crypto on a hosted webwallet is making that very hard and they often have a option to earn crypto’s WAY easier and less time consuming than faucets.