What is Crypto Currency Wallet?
A cryptocurrency wallet or crypto wallet can be defined as a type of digital wallet in which the user can store, send and receive bitcoins or any other type of currency. However, unlike a normal pocket wallet, the crypto wallet does not actually store your coins but the transaction is recorded on the block chain as the main purpose of crypto wallet is to store your private key (which is a secure digital code known only to you and your wallet) that proves ownership of a public key (a code tied to a certain amount of coins).
When a person or a firm sends you bitcoins or any other type of digital currency such payee is actually signing off the ownership of the coins to your wallet’s address. Practically, there is no actual exchange of real coins.
It is necessary to ensure that private keys should be securely hidden so that the owner or the user of the private key knows where they are. Ownership of the private keys gives its owner the complete control over the funds associated with his or her corresponding public keys.
Types of Crypto Wallets That One Should Know
There are several types of crypto wallets providing different ways to store and access your digital currency. These wallets are broadly categorized into five types as mentioned below such as
The desktop wallet is those wallet that can be downloaded and installed on a PC or laptop and can be accessed only from that one device. This type of wallet is much safer and secure than any other type of wallet like online wallet. However, in case the computer or laptop is infected by malware there is a possibility of losing all your funds
An online wallet can be accessed from any computing device from any location through cloud. Online wallets have usually have control of third parties with private keys stored on a cloud. Online wallets are quite vulnerable due to security concerns related to hacking.
The mobile wallet is available in the form of an app that can be downloaded onto your smart phone and is usually much simpler and smaller than desktop wallets due to limited space available on a mobile.
Hardware wallet stores users’ private keys on a hardware device like USB and offers increased security. Hardware wallets are compatible with several web interfaces and can support different currencies.
Paper Wallet is the safest and easy to use currency. The term paper wallet usually implies a printout or paper based document of the users’ private and public keys. However, it also refers to software used to generate a pair of keys which are then printed.
These are some of the different types of crypto currency wallets that are in use across the globe.