What is a wallet?
A wallet for cryptocurrency is the digital aquivalent of wallets for fiat money but instead of containing bank notes it is made of addresses. It’s typically made of a public and a private key. The public key can be shared and is used to receive coins. The private key must not be shared under any circumstances with anyone! Any person in possession of a private key can transfer coins to other addresses.
What kind of wallets exist?
When using a cloud wallet, the keys are saved in the cloud of an external provider. You can access them by signin into your account on the website of the used service. There you have a overview of all your currencies and balances. In terms of security this type is the least secure, because all of your keys are stored in a remote location. But they make up by providing additional services like exchanges for trading or a trading history.
The usage of a software wallet is done by downloading and installing an application developed to manage cryptocurrency addresses. There are different providers to select from but the most well-known are Jaxx and Exodus.
Paper wallets are papers with the keys printed on them. They often have a QR code as well for making quick transactions. In terms of security they rank second after hardware wallets, because the papers could be copied or stolen by other people if not secured good enough.
If you want to use a paper wallet, follow our guide for generating one.
Hardware wallets are the most secure and most expensive way to store keys. These wallets are little devices on which keys are saved. In order to access the keys, it can be connected to a PC or smartphone.