To keep your cryptocurrencies secure, you need a cryptocurrency wallet, of which there are many types available. Deciding which one is right for you will depend on a number of things, which we look at below. So, to help you make the right decision, we’ve created a quick guide that will help you choose the right cryptocurrency wallet.
What is a cryptocurrency wallet?
A wallet enables users to store, send and receive digital currency and monitor their balance. As this is all done online, a cryptocurrency wallet is not a physical wallet but a software program that stores both private and public keys and interacts with blockchain.
Common types of wallet
There are many different types of cryptocurrency wallet and the type of wallet you choose will depend on what you want to achieve with it.
Hardware wallet
Pro: High level of security
Con: Needs a hardware element to access
A hardware wallet stores your private keys on a hardware device, such as a USB. They are stored offline (in cold storage), which provides increased security as they can’t be hacked when not connected to the Internet. Good hardware wallets make it easy to undertake transactions. You simply plug in the hardware to a device and, using a number of authentication factors, you can send the currency online. Well known examples of hardware wallets areKeepKey or Nano Ledger S.
KeepKey Hardware Wallet
Desktop wallet
Pro: High level of security
Con: Can only be accessed from one place
A desktop wallet can be downloaded and then installed on your desktop. This means that the wallet can only be accessed via the desktop it is downloaded onto, preventing it from being used on multiple devices. However this also means, they are able to offer high levels of security. If you are considering using a desktop wallet, Darico might be a valid option as it lets you store your DRC Coins and all others that comply with the ERC20 Token Standard. Alternative solutions such as Electrum, Exodus or Copay are also very popular with the cryptocurrency crowd. Just make sure you check which currencies are supported by the individual wallet.
Darico’s Wallet
Online wallet
Pro: Can be accessed anywhere
Con: Increased risk of hacking or theft
An online wallet runs via the cloud, and so can be accessed through any device. Online wallets are usually run by a third party, which means they are not completely under your control, and this creates an increased risk of hacking or theft.
However, GreenAddress for example offers a per-transaction two factor authentication, multi-signature and deterministic wallet. Even though an online wallet is less secure than the desktop or hardware version, two factor authentication makes it harder for any hacker to gain access to your wallet.
If you use an online wallet, you should make sure you remain in control of the private keys at all times. If the provider keeps control of the keys, then you shouldn’t use their wallet.
Mobile wallet
Pro: Can be accessed anywhere
Con: Smaller and simpler due to storage size restrictions
Mobile wallets run via an app on your mobile phone. This gives you the convenience of easy access. Mobile wallets are also known as ‘hot’ wallets, because they’re similar to the ones you use in everyday life and carry with you at all times. Due to storage space on your mobile, these types of apps are usually smaller and simpler in comparison to a desktop wallet. MyCelium is a popular android and iOS wallet that features a wealth of advanced privacy and security features. BreadWallet or Copay, that we mentioned before, are valid alternatives.
Copay Mobile Wallet
Security
Security is a crucial factor to consider when deciding which wallet to use. As evidenced above, different wallets come with varying degrees of security, and ensuring your cryptocurrencies are as secure as possible should be a priority.
Any online wallet is always going to have some element of risk, because as with anything online it can be vulnerable to hacking attacks. In comparison, a wallet that is stored offline can’t be hacked and so automatically has a much higher level of security.
You should however ensure that the wallet you choose is not held on an exchange. Exchanges are simply not secure enough because the exchange will hold your private keys. You should only select a wallet where you hold the private keys in order to ensure you are choosing a wallet that is safe and secure.
How you want to use it
Depending on how you wish to use your wallet, how often and how accessible you need it to be, will ultimately play into the decision making process for which wallet you choose.
Consider factors such as:
How often you want to be able to access the wallet;Whether you’ll be storing more than one type of currency;How secure you want the wallet to be.
After assessing all of the relevant factors, you’ll be in a strong position to decide which wallet is most capable of meeting your needs.
Website : https://darico.io/
Whitepapper : http://darico.io/Darico-Whitepaper.pdf
My Bitcointalk Profile : https://bitcointalk.org/index.php?action=profile
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