THE 5 TYPES OF WALLETS THAT EXIST FOR CRYPTOCURRENCIES

In the world of cryptocurrencies, security is one of the first things to be taken very seriously. It is important that users and those interested in digital currency understand their options and the importance of each of them.

Currently, there are five basic types of cryptocurrency wallets. All have their benefits and weaknesses but each serves a different purpose.

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The 5 types of wallets:

  1. Cold Wallets: This type of cryptocurrency purse uses keys created by a source that is not connected to the Internet. This adds an additional layer of security “air space” and allows these wallets to come in a hardware format. Usually, some kind of universal portable hard drive (USB) or USB disk drive. 
  2. Hot Wallets: As expected, this type of cryptocurrency purse uses keys generated by Internet-connected devices, usually servers at the location of the wallet manufacturer or the exchange of the wallet’s wallet. Although Internet connectivity makes hot wallets less secure than cold wallets, they are still the most popular cryptocurrency wallets currently in use, as they can exchange currency, make purchases over the Internet and even access other types of digital assets. of cryptocurrency.
  3. Decentralized Wallets: You ‘ll see this term a lot, and it simply means that the cryptocurrency wallet does not have a centralized back-end to which you need to work when you want to sell, market or buy.You control the keys of your wallet, and that allows you to connect and generate a transaction with anyone, anywhere. On the other hand, you control your keys, which means that it is best to protect them immediately or face a potentially very bad day.
  4. Hosted Wallets: This is the opposite of decentralized, where the manufacturer of the cryptocurrency wallet or exchange controls and stores your keys. On the one hand, they probably have better security than you. But, on the other hand, they are also likely to store thousands of user passwords, which means that hackers will target them much more strongly than they would with a single user like you. It also usually means that you will have to start your transaction with the hosted environment instead of simply connecting with whomever you want. That is not just an extra step; It can also affect your privacy.
  5. Paper Wallets: As the name implies, this type of cryptocurrency wallet is reduced to printed paper sheets that register your public and private cryptographic keys. To use a paper wallet, simply transfer your digital currency to a public address that appears in your paper wallet. To spend part of it, simply start a transfer and reprint your wallet. Rapid response codes (QR) are often used to convert large typing fragments into faster scanning operations that are less easy to copy. Some people do not consider paper wallets as a kind of separate wallet, but refer to them simply as the “coldest cold wallets.”
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The most popular portfolios today are those that allow more than a single cryptocurrency. It has become fashionable, since there are so many different currencies. This makes the use of wallets more convenient and at the same time you can keep your digital portfolio under one roof.

Very soon, we will publish an analysis on the portfolios that we think are remarkable compared to the others.

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