Types of Wallets : A complete guide for Crypto beginners

Legacy Network

14 Dec, 2023

Crypto wallets are physical or digital devices that store private or public keys needed to carry out cryptocurrency transactions. It serves as a cryptocurrency storage system. Cryptocurrency wallets are like regular wallets for money and cards, but they keep digital assets instead. Some wallets are safer than others, find out why:

Types of wallets – Choose a Wallet that fits you

Cryptocurrency wallets vary in type according to their features and safety standards. Hot wallets and cold wallets are the two categories into which they are divided.

Hot wallets

Hot wallets are popular crypto wallets that work directly on the internet, offering convenience but less security. They allow easy access to online transactions and store private keys online. They are user-friendly and protect against hackers.

Types of hot wallets:

Web wallets

Among the most prominent kinds of hot cryptocurrency wallets are web wallets. You may access web wallets with a number of different web browsers.

Furthermore, downloading any particular software is not required. Users can access their cryptocurrency assets from anywhere in the world thanks to browsers. The website holds the keys to your cryptocurrency holdings for web wallets.

Mobile wallets

With nearly the same functionality as desktop wallets, mobile wallets are a significant form of hot crypto wallet. You also need to download a hot wallet mobile app to your mobile device in this case. Mobile wallets are more flexible than desktop wallets in functionality.

Desktop wallets

Speaking of desktop wallets, there is a specific application that you must download to your computer. Creating a data file to store your keys in is the responsibility of this application.

To access the keys in this case, all you have to do is create a strong password. Even with desktop wallets, you can still experience the benefits of key ownership. On the other hand, it is vulnerable to virus attacks and physical harm.

Cold wallets

Your private keys and cryptocurrency tokens are kept offline in cold storage, which does not require an internet connection. In other words, they are like secure boxes where you can keep your money and use it for everyday shopping. There aren’t many cold wallets that operate online. Still, these wallets serve the same purpose.

Hardware wallets

This kind of wallets support Key-storage within a flash drive or other solid storage device. This gadget is easy to connect to a computer and keep data on. Additionally, it will save the data if an unexpected power outage or blackout occurs. Using a USB device to connect hardware wallets to PCs makes them incredibly user-friendly and simple to operate.

Paper wallets

Paper wallets came from writing keys on paper and storing them in a specific place. But there’s always a risk with these wallets. This is because if you misplace these documents, you lose all of your cryptocurrency holdings. 

Online wallets

The keys are kept safe in an app or software with two-step factor authentication, making online transactions faster and easier. Also, very important, you should be connected to the internet for this – hence, ‘online’ wallet.

Benefits of Using a Crypto Wallet

Ease of use

Using a cryptocurrency wallet is an incredibly simple process. You can easily manage different cryptocurrencies by using this. You can plan your cryptocurrency transactions and create graphs. These wallets encourage a large number of additional people to engage while also improving the user experience and happiness.

Private account and transactions.

You need to carefully preserve your crypto assets, just like you would with regular assets. Encrypting transactions using a private key makes wallets extremely safe. Because of this, cryptocurrency wallets protect the security of your funds and the privacy of your transactions.

In summary

Study crypto wallets thoroughly and understand guidelines and risks before choosing one for your currency. Take all the security measures and you’re good to go.

Use a non-custodial wallet rather than a custodial one. The key difference is that Custodial wallets give a third party authority over cryptocurrencies.

On the other hand, non-custodial wallets provide the user complete authority. Like Legacy Wallet

When using custodial wallets, the user must trust someone else to manage their cryptocurrency. However, non-custodial wallets eliminate the requirement for this form of trust.

Features such as: – Multiple cryptocurrency token support

Exceptionally fast and safe with no lag

Non-custodial and multi-chain (we just explained why that matters)

includes a browser extension of its own.

Furthermore, we are confident that the forthcoming updates to the wallet will astound the market and leave you in awe. Our development team is continuously working to make a dent in the industry, because we would have it no other way.