We have already talked a lot about different cryptocurrencies and their main advantages and disadvantages. It is clear that cryptocurrencies are extremely volatile, yet they seem to have a bright future in different industries. That is why, many people, from all around the world, choose to invest in digital assets. As we know, there are many cryptocurrencies, with diverse use cases, but almost each one of them has a strong community of people, who believe in its success.
For those who have already invested in cryptocurrencies, there is one common concern - that their digital assets might be stolen. And while there might be plenty of hackers, trying to steal cryptocurrencies, it turns out that protecting your assets isn't that hard, as it seems.
If you are new to the crypto world, here is what you should know about storage and safety of cryptocurrencies.
First thing you should know is that storing cryptocurrencies safely is not the same as getting them. You will need a different set of knowledge and skills.
Choose your crypto wallet
A cryptocurrency wallet is a software program, created to store public and private keys, receive or send cryptocurrencies and monitor their balance. This is the most secure way to store your digital assets.
Of course, there is a variety of crypto wallets, from which you can choose, but there are two main types, known as hot and cold wallets.
Hot wallet - this type of cryptocurrency wallet can be accessed at any time from the internet. Those include cloud wallets, as well as mobile wallets and exchanges.
Cold wallet - it is not connected to the internet, so you can store your funds offline. While you are still able to receive funds, no one can transfer them out. Cold wallets can be USB or other similar data storage devices.
So, if you are in for crypto trading, hot wallet is a good choice, while cold wallets are better for long-term holding of cryptocurrencies.
Types of cryptocurrency wallets
Paper
Paper wallets are cold storage and refer to a physical paper copy of public and private keys. Other times, it can mean software for generating a pair of keys along with a digital file for printing. In both cases, paper wallets can guarantee a high level of security.
Of course, paper wallets hide some risks. They can be easily damaged, burned, copied, etc., so you need to be extremely careful. Also, remember that it isn’t a good idea to make an electronic copy of your paper wallet.
Cloud wallets
As we said, cloud wallets are part of the hot wallets' category. This type of wallet gives you access to your funds, from any computer device, anywhere, anytime. Besides their convenience, they are vulnerable to attacks.
There is a safer version of cloud wallets - noncustodial online wallets, which are accessible via mobile or web apps, but the service provider doesn’t have access to the private keys.
Software wallets
Software wallets are another type of hot crypto wallets, and need to be downloaded and installed on your device. They offer a high level of security but unfortunately, can not protect you against viruses or hacker attacks, so you should keep your device safe.
Hardware wallets
Hardware wallets are cold cryptocurrency wallets, storing your private keys on devices like USB. They are the most secure way to store your digital assets.
Furthermore, you can use them to make online payments and most of them support multiple currencies.
This type of wallet is created for easy and convenient transactions. All you have to do is plug it to another device, unlock your wallet and make a transaction.
As we see, it isn’t impossible to keep your cryptocurrencies safe. All you need to do is choose your type of cryptocurrency wallet and make sure it is secure.
Cryptoarbi is an automated trading platform created to help you find the best trading opportunities. Just choose your subscription plan, and we will do the work for you.