Below are some crypto wallet categories that the good knowledge of their functions can contribute decisively to their most correct choice.
It is important to keep in mind that your wallet includes only the cryptographic keys that give you access to the digital currencies. Although anyone can see the number of Bitcoins that any account has, the right to spend it is only given to the one who holds the appropriate cryptographic keys. For a full list of cryptocurrency wallets available, check this list.
Hot and cold wallets
A wallet which is connected to the Internet is characterized as hot. On the contrary, a cold wallet is not connected to the Internet. Cold wallets are considered to be more secure, so they are recommended for storing large amounts of cryptocurrencies. Hot wallets are preferable when frequent use is required to send cryptocurrencies.
“Full” and “light” wallets
Full wallets keep locally all the information on the cryptocurrency network and can confirm any transaction. This means that they consume enough resources on the computers they are running, especially with regard to hard disk space. In contrast, light wallets require far fewer resources, without retaining local important information about the network. These are linked to other, complete network nodes where they seek the information they need.
The wallets that are performed on personal computers, whether it’s desktop or laptop systems, are usually complete. The official Bitcoin wallet, Bitcoin core, which you can download, and install from bitcoin.org – Bitcoin’s official website is one of them.
But there are light wallets that can be used on computers, such as Electrum. In any case, on the website of Bitcoin you can find a number of different wallets, with different features, which you can try and use. The wallets used in mobile devices such as Cell phones are usually light wallets.
There are also specialized wallet devices, called hardware wallets, such as the devices that Trezor and Ledger manufacture. These devices manage your cryptographic account keys and can be linked to computer or mobile wallets. In this way, personal keys are never known to the operating system of the computer or mobile device, with any security vulnerabilities that it may have. Their use is appropriate when you want to manage larger amounts of cryptocurrencies, which you also want to use frequently.
Still a very safe solution for storing your cryptocurrencies is the paper wallets. The best practice is to create them with the help of a computer that has never been connected to the Internet, or by using a Linux distribution that will boot your computer from a CD or USB flash drive. These may be the safest solution when you have significant amounts of cryptocurrencies, but you don’t use them often for transactions.
Finally, there are cases of online wallet. These are websites that manage your cryptocurrencies and give you access to them through usage codes. Their biggest advantage is the ease of use and the fact that there is someone you can contact if you forget your passwords to regain access to your cryptocurrencies.
However, their use is not recommended under any circumstances, because in this way cryptocurrencies do not really belong to you and access to the online wallet can be interrupted at any time if, for example, the company that manages it goes bankrupt.