At some point in every crypto investor’s journey, there will be a quest to find a wallet that suits their needs. After all, it’s impossible to buy Bitcoin without one. This task can be especially tricky for beginner investors with not much experience of the process or the availability of options.
In this article, we will take a look at the different types of wallets you can choose from and discuss what kind of investor would benefit from them mostly. After reading this article, you should have a better overview of the wallets such as yuanpay group that are currently available, and you should be able to make a better choice for yourself. Let’s get started.
Generally speaking, there are 5 types of cryptocurrency wallets – each one of them with different features and characteristics. These are:
- Mobile wallets (applications)
- Online wallets (websites or extensions)
- Desktop wallets (software)
- Hardware wallets (physical devices)
- Paper wallets (printable)
While, in essence, all wallets are meant to serve the same purpose, several options are safer while others are more convenient. Some are rather old school while others are meant to make the experience as smooth as possible. Keep on reading to learn more about the different wallet options.
Mobile wallets are the most common types of wallets available. They can be downloaded to Android devices or iPhones and the setup process is extremely easy:
- Mobile wallets are either tied to your mobile device or also accessible as an online wallet.
- They offer a sleek design and UX that aims to provide convenience to amateur investors.
- Some mobile wallets (e.g. Blockchain wallet), allow users to participate in Airdrops or even earn passive income.
- Most mobile wallets contain a trading extension, which makes them act as cryptocurrency exchanges.
- These types of wallets will usually support a limited number of coins (usually those that are most popular).
- Exchange-based wallet apps also fall into this category. While the coin selection is larger and the features are more, they are mostly useful for experienced traders who do much more than check their portfolio on an occasional basis.
Who are mobile wallets for?
Mobile wallets are useful for everyone, but especially for beginners. The minimalistic interface in combination with the limited coin options makes this a great first wallet that is accessible easily and at any time.
Online cryptocurrency wallets have many similarities with mobile wallets:
- They both store cryptocurrency in “hot” storage, meaning online.
- They both have a great interface aimed to support beginners.
- Security is weak for both of them.
In most cases mobile wallets will have an online counterpart, allowing users to log into their wallet in case their phone is lost or stolen. This allows investors to access their funds from multiple access points, make them more convenient for everyday use. Furthermore, they are very easy to navigate, and you will usually have the option to buy or sell coins from within the wallet’s interface.
Who are online wallets for?
Online wallets are great for amateur investors who do not wish to invest significant amounts of money. They are also great if people who regularly make cryptocurrency transactions, and wish to do so in a quick and easy way, without being limited to a single access point.
Computer-based cryptocurrency wallets may see very similar to online wallets. However, there are a few significant differences that make desktop wallets a lot safer and preferable when storing larger amounts of money.
- A desktop wallet can only be used from a single desktop device. Simply download the software on your computer, install it, and set up the wallet. This limited access increases the security of your funds.
- Most desktop wallets are non-custodial, meaning that only you hold the keys of your wallet. This increases the wallet’s safety but also your responsibility for your funds.
- A third security benefit of desktop wallets is that they store your funds in “cold” storage, meaning that the funds remain offline.
- Desktop wallets also pose a unique risk – if your device is damaged physically, you could put your funds at risk.
Who are desktop wallets for?
Investors and traders are looking for a high-security solution that is free to use.
Hardware wallets are by far the most secure and popular wallet option in the cryptocurrency market. The physical USB-shaped devices store thousands of different coins and offer multiple layers of security, including 2-factor authentication (2FA), manual confirmation of each transaction, an 8-digit pin code, and the ability to generate multiple wallets even for the same cryptocurrency. Hardware wallets also store all cryptocurrencies in “cold” storage, for even stronger security.
The only drawback of this option is the price tag. While most cryptocurrency wallets are free to use, a hardware wallet will set you back approximately $50-$200 depending on the device you choose to buy. Therefore, it might not be the best option for beginners who are simply looking to learn more about the crypto space.
Who are hardware wallets for?
Experienced investors who invest significant amounts of money.
Paper wallets are the first and oldest type of wallet in the market. Users simply print a piece of paper that auto-generates public and private keys. This allows them to store their funds safely while also accessing their wallet to check their funds.
They are second safest option after hardware wallets since you never use a computer to check your funds and are free to use by anyone. While this type of wallet makes a great option for all investors, it has a couple of limitations:
- There is a lack of convenience since you can only check your funds from blockchain explorer.
- Paper wallets are fragile due to their paper form, which increases the risk of losing your funds.
- If you decide to withdraw your funds, you will need to transfer the total amount at once. Partial withdrawals are not possible.
Who are paper wallets for?
Mainly experienced investors who wish to obtain a high-security storage option at no cost.