Getting a cryptocurrency wallet is an important first step to using, trading, sending and receiving crypto including altcoins and Bitcoin. This article will explain 5 major types of crypto wallets, and some of the pros and cons of each. Note: examples provided do not represent endorsement of these products. As always, do your own research.
Psst – if you’re feeling a little lost just reading these terms, check out our Crypto Glossary.
1. Online Wallets
Examples: Blockchain, exchange wallets like Coinbase or Binance.
Online wallets are wallets which are accessed using a web browser. Online wallets offer the advantage of being able to access them wherever and whenever you have internet access, allowing for quick access to coins for trading or purchases. However, when you use an online wallet, your private key is stored on someone else’s server, meaning if they are hacked or go out of business, you could lose your coins.
2. Mobile Wallets
Examples: Jaxx, Coinomi, Trust, Cipher.
Mobile wallets are apps that allow access to your cryptocurrency using your mobile device. Like online wallets, mobile wallets are convenient, and can be accessed anywhere you have internet or cellular service. However, they are also vulnerable to hacking, and can be compromised if you lose your mobile device.
3. Desktop Wallets
Examples: Exodus, Bitcoin Core.
Desktop wallets are downloaded and stored on a single computer, meaning that only that computer can be used to access the coins stored on it. This provides an additional layer of security, although you can still be vulnerable to malware and keyloggers, and you can lose access to your coins if the computer fails without a backup.
4. Paper Wallets
Examples: Paper wallets can be generated using WalletGenerator.net or MyEtherWallet.
Paper wallets are an offline method for storing cryptocurrency that involves using software to generate a secure key offline, and then printing your public and private keys on paper. QR codes are often printed with these keys to allow paper wallet users to scan the codes when they need to access an address. These completely free wallet options are secure, and well suited for long term storage. However, losing the paper a wallet is printed on means losing access to your coins.
5. Hardware Wallets
Examples: Trezor, KeepKey, LedgerNano.*
Hardware wallets are devices that store the private keys to your crypto wallets. These wallets are typically offer improved security over other wallet types, and are an ideal way to store larger quantities of coins long term. Coins stored on hardware wallets can be recovered using a seed phrase in the event they are lost or damaged. One potential disadvantage of hardware wallets is that you need to have physical access to the wallet to transfer coins out of them, which makes it less convenient for frequent trading. Hardware wallets are also the most expensive option in terms of obtaining a wallet.
Regardless of your wallet choice, attention to general internet security and physically securing private keys, hardware and other devices are important aspects of keeping your cryptocurrencies secure.
*If you’d like to support future OCC projects and products, consider using our affiliate link when you purchase a hardware wallet