Do You Need a Wallet for Cryptocurrency?

With the flow of investments in the crypto space and growth in its popularity, hackers are also popping up left, right, and center. Having a wallet is necessary to store your coin, but the question is, do you need to get a personal wallet for this? Well, to know the answer and also the type of cryptocurrency wallet best for you, read this guide till the end:

Yes, You Do NEED Your Own Wallet for Cryptocurrency:

Although the crypto exchange you use to sell or purchase digital assets provides you with an online wallet, we recommend getting your own and transferring coins to it. With a crypto exchange wallet, it’s a matter of crossing your fingers and hoping it doesn’t get hacked. The primary reason behind this is that crypto exchanges are always in the crosshairs of hackers. The bigger the platform is, the more sophisticated hackers will be after it.

Even though these exchanges like Swyftx, CoinSpot, Binance, and so on have airtight security measures in place with constant monitoring, the risk of security bypass still looms above them. There have been tons of examples of exchanges getting hacked in the past, resulting in millions of dollars getting wiped off in minutes. Here’s a list of cryptocurrency exchanges that were hacked recently. 

So the gist is, having your personal private cryptocurrency wallet is necessary if you want to ensure that some random dude with coding skills doesn’t run away with your digital assets. 

Here Are Three Kinds of Cryptocurrency Wallets:

There are various types of crypto wallets, but they fall into one of the three categories mentioned below.

Software Based:

Also called Hot Wallets, these are connected to the internet because they operate on specific programs that need connectivity to allow easy access. Here are some examples of these wallets:

  • Desktop: This wallet is a software program that’s installed on your PC. They have the addresses that users can use to send and receive cryptocurrencies. Although they are very private and secure, having a virus in your computer can compromise your security.
  • Online: These are cloud-based wallets that you can access from anywhere and any device as long as you have an internet connection. Although online wallets are very convenient to use, being online makes them vulnerable to attacks. 
  • Mobile: These wallets are based on the mobile application that you need to download to your phone. Mobile wallets allow you to even shop from stores that accept crypto as payment. However, they have smaller storage space as compared to cloud or desktop wallets.

Paper-Based:

Using a key generator for cryptography, users can have strings of private keys for cryptocurrency along with QR codes printed on a piece of paper. It contains private keys and addresses to your cryptocurrency that can be accessed by scanning the code on the paper. 

Although they are pretty secure because of being offline, the paper itself can get damaged, or the printing can get erased with environmental factors like moisture or your sweat. 

Hardware-Based:

These are the securest wallets to date because they are offline, just like paper wallets, but also have a durable structure. Mostly, you’ll find hardware wallets in the form of flash drives that you can plug into your computer and access or store coins. 

Since wallets stay offline most of the time and only go on when you connect them to your pc, no hacker can get their hands on your digital assets stored inside. But still, keeping your PC free from viruses is recommended as they can access the hardware wallet when you connect it to the pc.

Parting Words:

We know you might be wondering; which wallet should I get then? Well, the answer is simple, if you want airtight security, then go for a paper or hardware wallet. 

Paper wallets don’t cost you anything as you print the code on your own, but they are very delicate, and if damaged, you can lose your coins. On the other hand, hardware wallets are a little pricey, but they offer better storage and protection.

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