When you buy a cryptocurrency
wallet, you need a wallet to store your coins.
The wallet can be a custodial wallet, software wallet or hardware
Deterministic wallets that create
a new address with every new transaction is the current trend. “It’s important
for those who choose to participate.”
A cryptocurrency wallet it
typically a software program that will store your public and private keys. This will eventually help send and receive
cryptocurrency. Apart from the wallet,
there is something called storage for the cryptocurrency, which can be hot
storage of cold storage.
Hot storage is about storing the
coins online. Cold storage is storing
the coins offline thus preventing them from hackers.
In custodial wallets, the users
store the private keys via the third party.
Most of the beginners who are just starting off with cryptocurrency make
use of custodial wallets. Several
cryptocurrency platforms and exchanges provide custodial wallets when you buy
The advantage with the custodial
wallet is that the users do not need to remember the private keys, but they
need to remember only the login details to the platform. The person will thus be able to manage their
funds quickly. While custodial wallets are easy to use, the point of concern is
that these wallets are not in the complete control of the investor. Custodial wallets are also known as hot
wallets. Regardless, these wallets
provide a high level of security to customers.
However, when someone hacks the wallet, there is no way for the
investors to be able to get their funds back.
Software wallets can be accessed
from mobile, desktop and online. They
are very easy to use, and they work on different devices depending upon the
software type. The desktop wallets are
stored on the pc or the laptop. Similarly, mobile phone wallets are on the
mobile, and online wallets are online.
The advantage with the desktop
wallet is that the security is dependent upon how carefully one can secure it
personally. If the security parameters are not robust enough, it can be
susceptible to virus attack and hacking leading to the loss of data forever.
Exodus is a very famous example of a desktop wallet.
Mobile wallets are typically keys
stored on apps. This can be used for everyday expenses comfortably. However,
when the phone is stolen the rest is at risk. eToro Crypto wallet is a famous
Keep Key, and Ledger Blue are
Hardware wallets that help store the crypto offline — never connected to the
internet. When the pin is lost or if the hardware is lost or stolen the seed
word from the hardware wallet can be used to restore funds.