Cryptocurrency's popularity has soared with more and more people investing and many who are curious about it. Cryptocurrency is not as straightforward as most people assume it is.
What you may not realize is that similarly to holding your cards and cash in reality, you need a crypto-wallet to hold your cryptocurrency digitally. A crypto-wallet will allow you to store your private and public keys, view balances, and allow you to trade currency with others.
To go further, there are a few different types of cryptocurrency wallets that depending on your usage and preferences will determine which type is best suited to you. We'll go into details to see the differences between each type and to see which is the most secure option for you.
With a digitally stored software crypto-wallet, you'll need to access your balances and keys through a browser on a device such as a computer or smart phone. Although there are often security measures in place for these browsers, it is still very possible for a cybercriminal to infiltrate your system. With this type of crypto-wallet, your stored data is simply sitting online. Therefore, storing your crypto-wallet online makes it a bit riskier for you as anyone could be attempting to hack into it at any time.
By using a hardware wallet, your stored keys, balances, and data will be kept in some form of physical storage equipment like a USB. This piece of hardware stays in your possession unconnected to any devices when you're not using it. To access your crypto-wallet you would plug in the hardware to a computer and access the balance and keys online similarly to the software method. Hardware wallets are definitely a less risky option as your information stays offline for the majority of the time, just don't lose it!
A paper crypto-wallet is similar to a hardware wallet as it is in physical form, however, instead of using any form of technology, it is simply a piece of paper being used to hold your public and private keys. This offline method is almost a meshing of the two other types as you use these keys to access your data online. Again, this is a more secure method than having a software wallet just as long as you don't lose the paper.
Although different storing methods will be more effective for specific individuals, we highly recommend opting for a physical wallet (hardware or paper) if you want to add that extra level of security to your crypto-wallet. By storing your data offline on a physical wallet, you'll significantly reduce your risk of an online breach.
If you're really leaning towards a software wallet, which is easier to access, try only holding reduced amounts online and storing major sums onto hardware wallets for risk reduction. This is called segregating your funds and it can be very helpful for security purposes. If one account is breached, the rest should be relatively safe.
Just make sure you stay organized because if you lose your keys, you could be locked out of your crypto-wallet forever. Or worse, if they get into the wrong hands, you could get breached.