In my opinion, crypto wallets are basically gateway to your assets (cryptocurrency – coins or tokens) on the blockchain, they allow you interact with the blockchain network. We all know that cryptocurrency lives on the blockchain which means all the assets are stored there on the blockchain.
A crypto wallet basically provides you with a user interface or platform or gateway to access your assets that is stored on the blockchain. These wallets give you total control of your assets by providing you with the private keys which means that you own your assets and it cannot be taken away from you as far as your keys are secured. Blockchain wallets can be classified into 5 types namely;
- Web Wallets
- Mobile Wallets
- Desktop Wallets
- Paper Wallets
- Hardware Wallets
Web Wallets
This is basically the most common type of wallets. Most likely, this is the type of wallet that people get to know about when they first get into crypto as it is the easiest to come across and use right away. Web wallets are also known as hot wallets simply because they are online always. This means that you can assess this wallets anywhere using a simple web browser with internet connection.
While this is probably the easiest to use and more convenient because it is online as can be assessed anywhere with any device with browser and internet connection – it is also considered as the least secure because of the fact that it is always online and can be prone to attacks.
However, a lot of web wallets also give you control over your private keys meaning that you have complete control of your assets. A typical example of a web wallet is myetherwallet which is one of the most popular web wallets for ethereum and ethereum-based tokens and assets.
Mobile Wallets
This is another very popular type of wallet because a lot of people own smartphones/mobile devices and one of my favorite type of wallets. A mobile wallet basically does the same thing as everyother wallet including the online web wallet, but the only difference is that it is installed as a mobile application on your mobile device and not on the web.
This is considered as more secure than the web wallet because it doesn’t live on any server but locally on your mobile device. Most mobile wallets provide you with your crypto private keys which gives you total control of your assets. A perfect example of a mobile wallet is Trust Wallet etc.
Desktop Wallets
This is another very popular type wallet but not as common as the above two simply because desktop wallets require a computer to be installed. Desktop wallets much like mobile wallets are considered very secure and are available in most operating systems such as Windows, Mac and Linux. Similar to mobile wallets, you need to install desktop wallets on your computer in order to have access to them.
They also provide you with private keys, giving you full control of your crypto assets. They are not on any server like the online web wallets which means that it is a lot more secure and once your keys are kept safe, you are all good. A perfect example of a desktop wallet is Exodus wallet etc.
Paper Wallets
This is type of wallets is considered as the most secure compared to the above wallet types. However, they are not that common like the above because they are a bit more technical to understand at first and also requires the user to be really careful.
It is more secure that the other types above but a bit more risky because your keys are printed on a piece of paper and visible to anyone who comes in contact with that printed paper. They are considered the second most secure wallet type because they do not connect to the internet and cannot be attacked… once you keep that printed paper safe, your assets are fully secure.
Hardware Wallets
These are considered the king of wallets because they are the most secure wallet to store crypto assets. They are like paper wallets in terms of security but without the visible keys. Hardware wallets like the name says are a piece of hardware that is usually handy in size made specifically for storing crypto assets. The popular ones are Trezor and Ledger hardware wallets.
Why this is considered more secure than the paper wallets is because your keys are encoded inside the chips in the hardware that only you can have access to, combined with the fact that It does not connect to the internet, making it the most secure wallet type. This are considered the best wallet type for storing assets for long term. Depending on the hardware wallet maker, some hardware wallets come with a screen to make it easier to set up. To make use of a hardware wallet, you have to connect it with web gateway to assess your assets on the blockchain using your keys.