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What are different types of Wallets?

Paper wallets - Paper wallet is essentially a document which contains a public address that can be used to receive Bitcoins and a private key, which allows you to spend or transfer Bitcoins stored at that address. Those are often printed in a form of QR-codes so that you can quickly scan them and add the keys to a software wallet to make a transaction. The main advantage of a paper wallet is that the keys are not stored digitally anywhere, which makes it completely immune to hacker attacks, malware that can log the user’s keystrokes and basically any form of digital theft.

Mobile Wallets - For those actively using Cryptocurrency on a daily basis, paying for goods in shops or trading them face-to-face, a mobile wallet is an essential tool. It runs as an app on your smartphone, storing your private keys and allowing you to pay for things directly from your phone. Moreover, some apps enable users to use their smartphones’ near-field communication feature, which means they can simply tap their phone against the reader, without having to provide any information at all. Despite being a convenient on-the-go solution for Cryptocurrency storage, mobile wallets are very prone to hacker attacks. Moreover, you can lose control of your wallet if someone simply gains access to your mobile device.

Web Wallets - Web wallets store your private keys on a server of a company providing such services. The server is constantly online and is controlled by someone else. Different services offer different features, with some of them linking to mobile and desktop wallets, replicating your addresses across the devices you own. Much like mobile wallets, e-wallets enable their users to access their funds on-the-go from any device connected to the Internet. But unless implemented correctly, the organizations running the website might gain access to your private keys, thus getting total control of your funds.

Desktop Wallets - Desktop wallets are downloaded and installed on your computer, storing your private keys on your hard drive. By definition, they are more secure than online and mobile wallets, as they don’t rely on third parties for their data and are harder to steal. They are still connected to the Internet, which makes them inherently insecure. However, desktop wallets are a great solution for those trading small amount of cryptocurrency from their computers. There is a variety of different options of desktop wallets that cater for different needs. Some focus on security, some on anonymity and so on.

Hardware Wallets - A hardware wallet is a rather unique type of cryptocurrency wallet that stores the user’s private keys in a secure hardware device. It is the most secure way of storing any amount of Cryptocurrency, there have been no verifiable incidents of money being stolen from a hardware wallet. Unlike paper wallets, which must be imported to software at some point, hardware wallets can be used securely and interactively. Moreover, they are immune to computer viruses, the funds stored cannot be transferred out of the device in plaintext and in most instances their software is open source. Some hardware wallets even have screens, which add another layer of security, as they can be used to verify and display important wallet details. For instance, a screen can be used to generate a recovery phrase and to confirm the amount and address of the payment you wish to make. So, as long as you invest in an authentic device made by a trustworthy and competent manufacturer with a good reputation, your funds will be safe and secure.