Now that we know the terms used by crypto wallets users let’s dive to know more about the kinds of crypto wallet and their unique features. In case you missed our last post on terms used by crypto wallet users, here is the link.

If you are new to Crypto wallets and interested to know What are crypto wallets and How crypto wallets work, please check our last post here.

Types of Crypto Wallets

Crypto wallets are mainly categorized based on their storage, combination of public and private keys, accessibility, etc. Here are different types of wallets that are quite popular among crypto enthusiasts –

Paper Wallet

A paper wallet is a cold wallet used to store digital currencies. The process of accessing a paper wallet involves the printing of public and private keys on a sheet of paper. The keys are generated via open source wallet generator available like – BitAddress.org, WalletGenerator.net and BitcoinpaperWallet.com. As experts recommend users generating a paper wallet should unplug their internet and wipe the history after the keys are created to assure security and avoid hacking of your wallet.

Desktop Wallet

Any firm dealing with cryptos or digital currencies would launch his Desktop wallet for the convenience of its customers. Desktop Wallet are installable’s that could be installed on your laptop/desktop. As a desktop/laptop is mostly connected to the internet, you would need extra layers of security measures to protect your wallet like antivirus, firewalls, etc. Some of the leading desktop wallets available in the market are – Electrum and Bitcoin Core.

Mobile Wallet

With a need to access from any time and anywhere, Mobile wallets have gained popularity in the crypto world. The working is similar to the desktop wallet and provides hot storage both for Android and iOS versions. However, before installing a crypto wallet on your phone make get a review on features like Private keys, ease of use, security, back up and most importantly the development community if it’s active or not. Some of the mobile wallet available are – MyCelium, Edge

Online Wallet

The least secured wallet that offers hot storage is Online Wallet as they are always connected to the internet. The private keys are held in your browser and hence prone to DDOS attacks. They could be categorized further to hosted online wallets like Cex.io and coinbase or non-hosted online wallets like Metamask and myetherwallet.

Hardware Wallet

The most secure of the lot that offers cold storage and is a bit technical in terms of usage. As the name suggests, they are the hardware explicitly built to handle public and private keys. You can imagine as a USB drive as your wallet that would go online only when you connect it to a laptop for a transaction, hence secured and in control. Some of the examples of hardware wallets are Ledger Nano S and Trezor.

Did you explore any other crypto wallet? We would love to know about it. Please share your story with us on Twitter [@getnuo].

References

investopedia ; coinsutra; hobowithalaptop; @fastinvest

Just today I read the news of Turkish Police arresting 11 suspects in an alleged hack of crypto wallet accounts, where victims reported a loss of $80,000. As a cryptocurrency user, it is crucial for you to know the terms commonly used while registering for a crypto wallet, so let’s get started-

If you are new to Crypto wallets and interested to know What are crypto wallets and How crypto wallets work, please check our last post here.

Terms Used in Crypto Wallets

Hot and Cold wallets

The hot and cold wallets or hot and cold storage simply refers to whether the wallet is connected to the internet and available 24*7 or not. So a hot wallet is available online and connected to the internet, whereas cold storage or cold wallet is only available when you want to make any transaction. A quick difference

Feature	Hot Wallet	Cold Wallet
Connected to the Internet	All Time	Only while performing a transaction
Suitable For	Small day to day transactions	Long-term holdings
Mode	Online	Offline
Security	Medium	High

Public and Private Keys

To understand public and private keys lets take an example from a fiat currency world. A user is inclined to make an online funds transfer, he registers with the bank via their app/website, on registering they ask to set up a password this password in encrypted form gets stored on the server. This could be termed as a public key. Now when the user initiates a funds transfer, he is asked to log in again with the set password, and as an extra measure of security, he is either asked for an OTP [One-time password] or biometrics[fingerprint, face or retina scan] this could be termed as a private key in crypto world.

In cryptosphere this private key is of utmost importance for you to move your amount and also needs to be secured as once a hacker knows your private key, he can easily access your wallet.

Multi-Sig and Multi-Currency Wallet

Multi-Sig wallet or Multi Signature wallet usually refers to a wallet that needs inputs from multiple parties to complete a transaction. Just for example a joint savings account that allows money transfer only when all the parties involved agree to it.

On the other hand, usually a crypto wallet is allowed to store only one type of digital currency say a Bitcoin wallet or Litecoin wallet, but some wallets allow users to store multiple currencies in one wallet that is referred as a Multi-currency wallet.

Our next post would talk about types of crypto wallets and their security features. Stay Tuned.

Tag: Crypto Wallet Terms

Types of Crypto Wallets Used by Crypto Enthusiasts