Various kinds of cryptocurrency wallets are there in existence for allowing the users for storing and accessing their digital currencies. The question that arises, in this case, is the security of the wallets. Before talking about the security aspects, it is important to know about the different kinds of cryptocurrency wallets available these days. The cryptocurrency wallets can be classified broadly into three different categories. The categories are the hardware wallets, the paper wallets, and the software wallets.
They can further be sub-divided into three types- the desktop software wallets, online software wallets, and mobile software wallets. The desktop software wallets can be installed and downloaded on the laptops and the desktop PCs. The online software wallets work on the cloud. They can be accessed from any location and any computing device. The mobile software wallets work on the smartphones through apps. They can be used at all the places, including the malls and the retail stores.
Hardware digital wallets differ from the software wallets on the basis of storing the private keys of the user. The hardware wallets keep the users’ keys in USB. As the keys are not stored online, they offer more security. Additionally, the hardware wallets are compatible with the online interfaces and thus, can handle various currencies. Transactions can be easily made with this wallet. As a user, just plug in this device to the computer that is connected to the web by entering a PIN and then transfer the currency. In the hardware wallets, your digital currency stays offline and therefore, the security concern or risk factor is much less. You can get the best hardware wallet from the online stores that the best prices.
Paper wallets are relatively easier to use. For transferring the cryptocurrency to the paper wallets, you can transfer it from software to public address displayed by the paper wallet. In the same way, if you want to withdraw the money, transfer funds from paper wallet to software wallet. This process is called sweeping. Sweeping is done by scanning QR code on the paper wallet or by entering private keys. Different digital wallets have different security levels. The security level is dependent on two factors- the kind of wallet used and the selected service provider. It is always safer to store the currencies offline rather than online. Regardless of the kind of wallet you have selected, security measures are highly important.