Although Bitcoin is a new concept for many, the most valued digital currency was developed more than a decade ago. It is considered the original cryptocurrency, and all other digital coins are referred to as alternative coins.
Supporters of cryptocurrencies argue that virtual currencies are far better than traditional currencies in terms of security, privacy, and faster transactions. Additionally, investors consider it as the best investment asset of the century and investing aggressively in it.
However, if you are planning to invest in it, you should know about different types of wallets to store your bitcoins.
Types of Wallets
Understanding different types of wallet may help you to choose which wallet is most suitable for you. You will get a private key to access your bitcoins in each type of wallet. Now let us explore all the wallet types.
- Hardware Wallets
- Paper Wallets
- Software Wallets
Among all these wallets, hardware wallets are the most secure than paper wallet then software wallets. That does not mean; you should not use software wallets. In fact, software wallets are extensively used across the world. Again, software wallets are of three types; desktop wallets, mobile wallets, and web wallets.
Hardware wallets are hardware devices that come with a private key for storing your bitcoins. It is a USB-like device and can be inserted into a device to access the bitcoins. The good part is you can use it on a mobile device or on a computer.
The only concern about the hardware wallet is you have to pay around $70 to $150 to own it. However, it is worth investing the money as it is the most secure form of wallet, and it is the best choice if you are planning for the long term and high investments.
Here are some popular hardware wallets you might like to have:
- Ledger Nano S
If you are not tech-savvy, then a paper wallet may not be the best suit for you. As it requires some technical knowledge and a bit of caution, it is not suitable for everyone. In this type of wallet, you will have to print your private key on a paper. But every cryptocurrency can’t be stored in paper wallets.
However, paper wallets are the second most secure way to store your bitcoins. It stores your private keys in offline mode.
As mentioned above, software wallets are the least secure, but some of the software wallets are now providing many high-security features. For example, software wallets are now coming with two-factor-authentication, biometric features, etc. So you can use a software wallet, but make sure you do not use it for a very large amount of bitcoins. Now let us explore different types of software wallets
- Desktop Wallets
As the name suggests, these types of wallets are suitable for desktops and laptops. You have to install an application to your system, and most of the wallets are compatible with all the popular operating systems such as Windows, Mac, and Linux.
However, you have to take some safety measures while dealing with desktop wallets. Use standard antivirus software on your system to prevent your wallet from cybercriminals. Instead of keeping your bitcoins on an exchange, you can use the following desktop wallets:
- Bitcoin Core
- Mobile Wallets
Mobile wallets have a few advantages over desktop wallets. These are similar to other mobile apps, and you can simply download it from the app store or play store. You can use these wallets on the go, and it is more convenient than desktop wallets. However, be careful with your private keys and passwords while using mobile wallets.
- Web Wallets
Finally, web wallets can be accessed from anywhere and from any device. But these wallets are more vulnerable to cyber-attacks. So store a minimal amount if you are using a web wallet.
Hopefully, the above information has helped you to understand different types of wallets. If you want to secure your financial future, then adopt these cryptocurrency trends for investing in bitcoin. Although bitcoin is highly volatile and risky, including some percentage of it in your investment portfolio is a great idea.