Everything You Need to Know About Cryptocurrency Wallets

If you’re looking for information on cryptocurrency wallets, then you’ve come
to the right place. The chances are that if you’ve ended up here, you’re already
investing in cryptocurrencies, or you’re considering it. If you fall into either
one of those buckets, then it’s great that you’re investigating crypto wallets
because as you’ll see below, these wallets can play an integral role in
safeguarding your digital currency investments.

In this detailed guide on cryptocurrency wallets, we’ll provide you with
loads of information. We’ll start off first by getting you up to speed on the
basics about what these wallets are. After that, we’ll move into sections about
the different types of digital currency wallets and popular options on the
market, and much more. We’ve included links below to all of the parts in this
guide. If you’re searching for specific information, you can use these links to
get right to what you’re in search of. Otherwise, you can read the full page to
soak up everything.

What Are Cryptocurrency Wallets?

Cryptocurrency wallets are typically software programs that play two vital
roles for folks that use them. First, they offer secure storage for private
crypto keys. Along with that, they also allow users the ability to send and
receive digital currency funds. We’ll discuss below why both of these are
important.

If you’re new to cryptocurrencies, private keys are what allow you to have
access to your funds. Without these keys, you can’t transfer or sell your
assets. Also, if your private keys are ever stolen or hacked, then it’s a
possibility that all of your cryptocurrency investments could be stolen. Due to
the importance of your private keys, it’s essential that you utilize a
cryptocurrency wallet to keep your investments safe.

The other benefit to cryptocurrency wallets is that they allow you to buy or
sell more cryptocurrencies easily. Since everything is digitally based in the
cryptocurrency realm, you’ll need to use a wallet or an exchange to move funds
around. The beauty of using a cryptocurrency wallet is that this feature is
built in along with the safe storage of your private keys.

As you’ll see in the next section, there are many different types of
cryptocurrency wallets that you can choose from. You can use everything from a
simple piece of paper to a sophisticated and specialized USB flash drive.

Types of Cryptocurrency Wallets

If you’re on the prowl for a cryptocurrency wallet to use, you’ll have a few
different types of wallets that you can select from. In this section, we’ll give
you an overview of the primary forms of crypto wallets that exist currently. As
you browse this list, you can see which of these might make the most sense for
you and your needs. Keep in mind that you may want to use more than one of these
wallet forms. We’ll discuss that more in the section below about how to keep
your funds secure.

Paper

Up first, we’ll cover the most simplistic of all cryptocurrency wallets, the
paper wallet. A paper wallet consists of nothing other than, well, paper! If you
decide to use a paper wallet, you’ll write your private keys down on a piece of
paper and store it in a secure location.

Using a paper wallet is nice because it keeps your keys off anything
connected to the internet. That makes it impossible for your keys to be stolen
by hackers. Many people also like them thanks to the simplicity of just using a
pen and paper to record things.

However, paper wallets have a drawback in that they can be misplaced. If you
do an excellent job of storing them in a secure location and then forget where
you put them, you’ll lose your private cryptocurrency keys. To help battle this,
we’d urge you to make multiple copies of your private keys and store them in
different secure locations. That way, if you forget about one, you’ll still have
the chance of finding it in one of the other spots. Ideal places to store your
paper wallets include safety deposit boxes, home safes, or other secure areas
that no one else has access to.

Hardware

Another option for cryptocurrency wallets is a hardware format. Typically,
these look much like a USB flash drive. They’re referred to as hardware form
since there is an actual piece of hardware involved. These specialized units are
made with high security built in so that your private crypto keys are kept safe.

Much like a paper wallet, the big selling point of hardware wallets is that
they store your private keys offline. Because of this, you have increased
security for your cryptocurrency funds. Hardware-based wallets are an excellent
option if you’re leery about storing your keys online or on an
internet-connected device.

Desktop

Up next, we’ve got desktop-based wallets for cryptocurrencies. As you might
have guessed, these wallets reside on your computer desktop. To use one of these
forms of crypto wallets, you’ll download the software onto your computer.

This type of cryptocurrency wallet is relatively secure. The main reason for
this is that the wallet can only be used on the computer which it was downloaded
to. However, if your computer gets a virus or is hacked, there is a possibility
that someone else could gain access to your private keys. In that scenario,
there is a possibility that you could lose some or all of your cryptocurrency
funds.

Online

Another format of cryptocurrency wallet is an online one. As the name
suggests, these crypto wallets operate online via websites. What’s nice about
these types of wallets is that you can connect to them from any device with an
internet connection. This makes it simple to gain access to things when you need
them.

However, online wallets for cryptocurrencies have some risk associated with
them. Since they are stored online and controlled by another company, it can
make your private keys more vulnerable to attacks or closure. For example, if
the online wallet service that you are using suddenly closes shop, you could
lose access to your crypto funds forever if you don’t have them backed up
elsewhere.

Mobile

Lastly, the other type of cryptocurrency wallet that you can utilize is a
mobile format. Much like the desktop format, your crypto wallet is stored on a
device. Instead of a desktop, mobile ones go on your mobile phone. The nice
thing about this is that you almost always have your phone on you, which makes
it easy to access your funds and keys while you’re on the go.

It’s important to note that mobile wallets still are not 100% secure. If your
phone is hacked or stolen, then folks can potentially gain access to your
cryptocurrencies and clean them out. Because of this, we’d suggest that you use
some form of lock on your phone to help limit the likelihood of this happening.

One other thing worth noting is that the apps that run these mobile
cryptocurrency wallets are much smaller than their desktop counterparts. Because
of this, you won’t be able to store as much information on the mobile formats as
you would on a desktop. However, unless you’ve got a ton of different
cryptocurrencies that you’re holding, this should not be an issue.

Popular Cryptocurrency Wallets

If you’re looking for some potential wallets to consider using for your
cryptocurrency funds, then this is the section for you. Here, we’ll highlight
some of the most popular and trusted crypto wallets out there. While this list
isn’t comprehensive of all wallets, it at least provides you with a launching
pad of some that you can investigate as potentials.

Ledger Nano S (Hardware Wallet)

For those of you in the market for a hardware wallet for safekeeping of your
crypto funds, look no further than the Ledger Nano. By far, Ledger Nano is the
most popular hardware wallet on the market. This cryptocurrency wallet supports
multiple digital currencies and uses a secure multi-signature security format.

Armory (Desktop Wallet)

One of the top desktop wallets out there is Armory. This wallet is popular
with folks looking for desktop access but also wanting a ton of added security
features. What attracts people to Armory is that they have some stellar secure
touches that make them stand out from other desktop wallets. Notable features
include multi-signature transactions, cold storage, and one-time printable
backups.

Jaxx (Online and Mobile Wallet)

One of the best online wallets currently is Jaxx. It’s extremely popular due
to their support of multiple currencies, including popular ones like Litecoin
and Bitcoin. On top of being able to access their wallet online, you can also
use their services on your mobile phone. If you’re holding multiple
cryptocurrencies in your portfolio, this may be a great wallet for you to
consider.

Mycelium (Mobile Wallet)

In the mobile wallet realm, Mycelium is one of the top dogs. Using their app,
you can access your private crypto data using either Android or Apple phones.
This mobile wallet is packed with security features to help protect your private
keys and funds. The only main drawback to Mycelium is that they only support
Bitcoin at this time. Hopefully, we’ll see them add support for additional
digital currencies at a later date.

How to Keep Your Cryptocurrency Wallet Secure

While using a cryptocurrency wallet is a great thing to do, it’s not the end
of the line if you’d like to really make sure that you’ve got your crypto keys
and funds as secure as possible. In this section, we’ve included our top three
tips for how you can keep your cryptocurrencies wallet safe. We’d urge you to
implement as many of these as possible to help limit the likelihood of running
into issues with private key security.

Update the Software Regularly

If you’re using a wallet that has occasional updates, you’ll want to make
sure that you’re updating things as often as possible. In the case of wallets,
updates are usually helping to increase the security of things. We’d suggest
checking for updates at least once a month to make sure that you’ve always got
the latest software edition.

Back Up Your Wallet

No matter which form of wallet you settle on, you should also be sure to
create a backup of your wallet. For example, if you’re using a desktop wallet,
then you should also consider using a paper wallet or a hardware wallet as a
backup. As great as computers are, they can still crash, and that can take your
private keys (and your digital funds) with it if you don’t have a proper backup
in place.

Add Extra Layers of Security

Having a wallet is just one step of keeping your cryptocurrency funds safe.
Below, we’ve included a handful of additional security layers that you can add
to help give you even more protection. Consider adding some or all of these
options in addition to your wallet.

Use two-factor
authentication

Make your passwords complex
and lengthy

Only use wallets with
stellar reputations

Use multi-signature options
that require the permission of a second individual for transactions

Additional Resources

If you’re seeking more information about cryptocurrencies outside of wallets,
then you don’t want to miss this section. Here, we’ll bring you many other
helpful cryptocurrency resources that you can use to increase your knowledge. If
you’re not ready to dig into all of these just yet, consider bookmarking this
page so that you can come back to it later.

Cryptocurrency Beginner’s Guide

We’ve developed an excellent cryptocurrency beginner’s guide to help crypto
newbies learn the ropes. If you don’t have much or any experience with digital
currencies, this is the place for you to build your knowledge base. Using the
link below, you can learn what cryptocurrencies are, how they function, where
you can buy them, and much more.

Cryptocurrency FAQ Page

Due to the complexity of cryptocurrencies, the chances are that you probably
have some unanswered questions. If that’s the case, then be sure to check out
the link below to our cryptocurrency FAQ page. On this page, we’ve built out an
extended list of questions that we commonly get about digital currencies.

How to Mine Cryptocurrency Guide

We’ve also crafted an excellent guide on how to mine cryptocurrencies. If
you’re interested in learning how you can go about getting in on crypto mining
action, then be sure to check out our detailed guide. Just click below to view
this valuable resource.

Conclusion

Hopefully, you’ve gained a greater understanding of cryptocurrency wallets
and how they function. We hope that you’ve located all of the information that
you were searching for. If you’re still seeking more cryptocurrency resources
and you skimmed over the additional resources section above, then be sure to
circle back to that part. We thank you for stopping by to read this guide, and
we wish you the best of luck in your future cryptocurrency investing adventures!

Cryptocurrency Wallets Frequently Asked Questions

If you find yourself with some unanswered questions at this time, we hope
that this section will help you find the answers that you need. Below, we’ve
gathered up some questions that we commonly receive relating to cryptocurrency
wallets. To view the answers below, simply click on the questions themselves.