5 ways to store your cryptocurrency
If you invest in cryptocurrencies, it is beneficial to store them in a wallet. This article will cover 5 ways (5 different types of crypto wallet available in the market) to store your cryptocurrency securely. Let’s discovery now!
Online wallets (web wallets)
As the name suggests, these are website-based online wallets which require you to open a URL to access the wallet. Most of the time, these wallets have some kind of account system with username and password to login to the wallet.
Pros
- Easy to access and don’t require installing anything.
- Can benefit from things like advanced buying and selling options (some centralized exchanges).
Cons
- Don’t give you control of your private keys or mnemonic phrase, meaning that you can’t control your wallet. Because it is online, it is effectively stored on a third-party.
- Users are at risk of being hacked and are susceptible to phishing scams, malware, insider hacking, DDOS attacks and outdated security measures.
- Don’t always have in-wallet exchange features like other types of wallets.
Mobile wallets
Mobile wallets are mobile phone applications that allows you to access to your cryptocurrencies wherever you are with your mobile device and provide additional features above and beyond wallets that are completely internet-based, however they also come with additional security risks. If you have BrickWallet on your phone, you are using a mobile wallet.
Pros
- More practical and easier to use than other crypto wallet types, great to accept or send payments on the fly.
- Most mobile wallets provide full access to private keys and mnemonic phrase, which means you have full control of your funds.
- Additional features above and beyond both online and hardware wallets like QR code scanning.
Cons
- Your phone is open to malware and viruses, which one completely wipe out any cryptocurrencies that you have saved.
- Someone could get access to your phone (e.g: if you don’t have a passcode to unlock it and drain your mobile wallet of its funds).
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Desktop wallets
A desktop crypto wallet is considered somewhat more secure both an online (web) wallet and mobile wallet, however that depends on your commitment to online security.
In cases where you use an older laptop, completely offline, on a clean operating system install — you could consider this a really effective cold storage method. Like phones, most people have an older laptop floating around and this could be a great use for it.
Pros
- Incredibly easy to use crypto wallet type.
- It is the ideal cold wallet to use if you are looking to store a large amount of currency somewhere.
- Private keys not stored on a third-party serve.
- TOR network can be used for more privacy.
Cons
- If your computer is connected to the internet, your privacy and security are at greater risk.
- Because everything is held offline, if anything happens to your computer, and you are unable to fix it, you could lose all of your investment.
- You have to regularly backup your computer for the same reason above.
- Your computer is open to malware and viruses, which result in your losing all of your coins.
Hardware wallets
Specially designed hardware devices are considered the best in crypto security for storing one’s crypto wealth for the long term. These devices can connect to your computer and mobile via USB ports so you can perform send and receive functions.
Hardware wallets are slightly less user-friendly cryptocurrency wallets than web wallets and desktop wallets, but they are easier to work with than paper wallets and more secure than hot wallets (most of the time).
Hardware wallets come in a number of different forms. Some require batteries, some don’t. Some have screens which mean you don’t need an insecure computer to backup your private keys, some don’t. Some handle hard forks better than others, and they all are often sold out, so snatch one up while you can if they’re available.
Pros
- If it has a screen, it’s the most secure way to store crypto long-term.
- Stronger security than all other wallets, for the most part.
Cons
- Cumbersome for some beginners to use, but an absolute must for large quantities of cryptocurrencies.
- Can be costly for some users.
Paper wallets
Finally, we are going to take a look at paper wallets. These used to be very popular for cold storage; however, since hardware wallets have come to onto the scene, they are significantly less so. That said, paper wallets are notoriously secure, so long as you undertake very strict security precautions when initially setting these wallets up.
A paper wallet is simply a document that contains all of the necessary data needed to generate private keys. This document can store a number of different keys; however, it allows you to keep a physical document containing this information.
Pros
- One of the most hacker-proof crypto wallet choices.
- Not stored on a computer.
- Private keys not stored on a third-party serve because they are on a physical document in your home.
Cons
- Not as readily accessible for use like desktop wallets and other hot wallets in things like everyday transactions.
- While not connected to the Internet, someone could gain access to the paper wallet and steal your funds.
- Can suffer from damage like paper deterioration over time and natural disasters like fires — though in general, damage can be avoided by using stronger materials.
Just remember that regardless of which way you choose, to keep it as secure as you possible can, you should be backing up your wallet regularly, ensuring you are using the most up to date software, and include as many security features as you can.
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