With the maturing of the cryptocurrency industry, the ecosystem and services surrounding it, have also consequently evolved. From exchanges to wallets- the supportive infrastructure has grown besides the expansion of this industry.
The cryptocurrency users today have a series of options for wallets to choose from. In this article, we take a look at the key features of different kinds of wallets available for you in the market today.
The hardware wallets are the physical devices that are used to store private keys. The advantage of this wallet is that they are the most secure option available to tuck in your crypto funds. The disadvantage is that you will need to connect them to a computer in order to access your wallet, thus making them relatively less accessible.
Pros- The key features of security provided by Ledger Nano prevents your cryptocurrency funds against malware attacks and threats of hacking. The recovery process can be directly done from the device itself.
Cons- It is a bit expensive, as most of the hardware wallets are. Absence of a password manager.
Pros- The hardware wallet adds an extra layer of security using a randomly generated PIN number. Additionally, it also limits access given to third parties.
Cons- It is a bit overpriced.
Mobile wallets are fairly convenient and easier to use as compared to other options available.
With a mobile wallet, you can check your account transfers or make in-store payments using QR scanning instantly. However, mobile wallets also face the same concerns as a desktop wallet. Your private keys can just easily be stolen or hacked.
Coin Bitcoin Wallet
Pros- The control of your crypto funds remain in your hands. It gives you complete privacy to your identity by not linking personal information like name, email id to your wallet address.
Cons- It does not support multi-signature usage. 2 FA authentication is missing.
Pros- Secures wallet using a PIN. It provides some of the additional features including searching for the nearest bitcoin seller and multi-currency viewing
Cons- Complicated; especially for new users.
Software wallets or desktop wallets are locally stored inside your desktop or laptop’s hard drive. The disadvantage is that software wallets are more susceptible to hacker attacks as they are remotely connected with the internet. On the upside, they have significant advantages if you are trading in small amounts.
Pros- The enabling Simple Payment Verification (SPV) feature that can instantly verify transactions using fee adjustments.
Cons- The limited number of cryptocurrencies supported. Additionally, its interface is a bit tricky for a beginner.
Pros- Intuitive and easy interface. Facilitating direct transactions between two cryptocurrencies.
Cons- Limitations in security features. Lack of 2FA authentication/
To be fairly honest, online wallets are comparatively quite insecure as compared to other wallet options. The access to your private keys remains in the hands of third-parties. The advantage of an online wallet is that you can access your funds using the internet anywhere, anytime. However, they should only be used in case if you want to transfer your funds from one place to another.
Pros- Supports a wide range of cryptocurrencies. It provides a seamless transfer of your assets from one coin to another without complex procedures.
Cons- It lacks advanced unique functions as compared to others. Limited Security. Being an online wallet it is prone to hacking and cyber thefts.
Pros- Easy transfer of your crypto assets from from one wallet to another. Provides 2 FA authentication
Cons- Requires identity verification, which is a concern for some users. Limited support of cryptocurrencies as compared to its peers.
Paper wallets are one of the safest ways to store your cryptocurrency funds. It is a software program that basically generates a set of your public and private keys. They are then printed on a piece of paper along with a QR code and kept offline. However, if you lose the piece of paper, you can also lose access to your funds.
We have explored all the different options available in the market today as well as the pros and cons of each one. Each of them has something to offer- while some are focussed on providing security others are focussed on creating easy accessibility. Alas, no one wallet has it all!
Ultimately, it comes down to your needs- how much funds do you have, how frequently do you plan on using it, the measure of privacy do you need, the amount of security you need, and so on. Further, you can also choose a different approach to combine different wallet options. However, whichever method you choose, it requires thorough research and thinking on your part.
Lastly, it is a fact that the crypto sphere is expanding. Consequently, more wallets with advanced features will be added to the market. Will there be one that caters to all our required needs? Only time will tell.
Disclaimer: I do not have any vested interest in any of the mentioned projects.