Crypto wallets are used to store, send and receive digital currencies using public and private keys. Public keys identify your online account, while private keys confirm that you are the legitimate recipient of the payment. Create a wallet on to make your savings more secure here.
Types of crypto wallets
Cryptocurrencies can be stored in several ways. Let’s list some options:
- Software. Some crypto wallets can be downloaded on PC and Mac. Then users will be able to access their wallet only from this computer. While storing cryptocurrencies this way is fairly safe, problems can arise if your computer breaks down or gets infected with a virus.
- Online wallet. As an alternative to software, you can use crypto wallets provided by resellers. They can be accessed from any internet device. Although it is very convenient and the mechanism of operation of such a wallet is similar to the principles of an online bank, it is important to find a reliable service developer. Since the company will keep your private keys, it is theoretically possible that if compromised, attackers could steal your funds. Such platforms are a common target for hackers.
- Applications. Many companies have made versions of crypto wallets as applications for smartphones. This version will be especially convenient if you move frequently and make payments.
- Hardware wallets. Those who don’t trust online wallets can store private keys on USB drives or in specialized hardware crypto wallets. Since they only connect to the internet when making transactions, this reduces the risk of funds being stolen.
- Paper wallet. Another form of «cold storage» — the so-called storage of cryptocurrencies offline — is the recording of personal keys on paper. It is important to make sure these records are kept safe, otherwise the cryptocurrency may be lost forever. In addition, if you keep your public and private keys on paper, it is imperative that you double-check that they are recorded correctly.
Security of crypto wallets
There are precautions that cryptocurrency users should take to keep their funds safe.
If you use software, network or mobile wallets, it is best to keep only a small amount on them, which is enough for ordinary transfers. The remainder should be stored in cold storage.
These precautions are best combined with additional safety precautions. Using two-factor authentication, which verifies a user’s identity in two different ways during the login process, helps to secure the account. It is also important to remain vigilant and be able to recognize fraudulent emails sent on behalf of a legitimate provider by spoofing an address. Such phishing attacks are used to obtain usernames and passwords from accounts. Keeping your software up to date also helps you protect against vulnerabilities.