crypto wallets, types & the best one for you.

prerequisite
To understand this article you need to have basic knowledge of how the blockchain works.

What is a crypto wallet?

A crypto wallet holds the private key that gives you access to your cryptocurrencies which you will need to make transactions on the blockchain. The private key stored in a crypto wallet is what you will need to sign transactions on the blockchain. you can think of a wallet as the middleman between you and the blockchain.

You should know that a wallet does not hold the actual cryptocurrency for transactions, but a pointer(read as a private key) to the cryptocurrency.
For instance the actual wallet we all know and use. I’m talking about the wallets men and women carry around in their back pockets or purse. The wallet when checked, could contain cards (credit or debit), and passports. That card (read as a private key) is used to gain access to funds stored in your bank account. If you have a million naira in the bank, you can’t possibly carry the physical cash inside your wallet, but you can always use your card(read as private keys) that is inside your wallet to gain access to the funds in your bank account.

an illustration showing how a crypto wallet holds a private key which gives access to cryptocurrency

The different types of crypto wallet

1. Paper wallet is a piece of paper that has your private keys printed on it. It is an old but still valid wallet type for storing private keys. The downside is, if it gets wet, burnt, or even stolen then it’s destroyed and your private keys will be lost forever, as also your cryptocurrencies🥺. It is important that you look for a more secure way of safeguarding your paper wallet either by placing it in a safe, bank, or even underground🙃.
   Now the good part. Your private keys can not be accessed by hackers online because a paper wallet is a cold wallet type so it is not connected to the internet.

   Is paper wallet the best crypto wallet type for you?
   The answer to this question solely depends on how often you will be making transactions on the blockchain and your purpose of buying cryptocurrency. If you are buying crypto to hold for a long time until the value appreciates, then a paper wallet could be a good option for you. Because you won’t be frequently making transactions on the blockchain and so wouldn’t need your private keys stored in your paper wallet often. You should as well do your own research!!.
   You should read more about Paper wallets here.

2. Hardware wallet is a hardware or physical device used to store private keys, for example, USB drives. It becomes a hot wallet type when it is connected/plugged to a computer to enable the signing of transactions. And It is also a cold wallet type as soon as it has been disconnected from the computer. Threats from cyber hackers are reduced/low because the hardware wallet type is not constantly connected to the internet.

   Is hardware wallet the best crypto wallet type for you?
   Well, if you think the hardware wallet type will be convenient for you and you can always protect it from theft, and other kinds of destruction then it’s up to you to decide.

3. Software wallet is any software application used to store private keys. This wallet type is the most popular and widely used because of how convenient it is for users to frequently make transactions. It is a hot wallet type because it is always connected to the internet. A software wallet is highly vulnerable to attacks by hackers because of its constant connectivity to the internet. Examples of this type of wallet are:

• meta mask

• Coinbase

• Trustwallet

• Binance

Software wallets can be categorized into three (3) types namely:

• Web wallet: this comes in form of a web browser extension. private keys are stored on the browser.

• Mobile wallet: it is a phone wallet application that can be downloaded. Private keys are stored on the phone.

• Desktop wallet: can be installed on your desktop. Private keys are stored on the desktop.

  Is software wallet the best crypto wallet type for you?
  We talked about the Paper wallet and Hardware wallet types, their use cases, and downsides. Compare them to software wallet types. Think about your needs and preferences. Are accessibility and convenience what you need? The choice is yours