CRYPTOCURRENCY WALLETS

Cryptocurrency is not kept in bank accounts, like conventional money. It’s kept in cryptocurrency wallets, secure software programs designed to keep track of funds. Each wallet contains one or more private keys – secret numbers – that are saved in the wallet file and allow the cryptocurrency to be spent. Private keys allow you to move funds out of your account. Public keys allow others to receive funds. Each cryptocurrency has its own unique keys.

Cold wallets

These wallets are the preferred storage method for people with a significant amount of tokens because they are not connected to the internet. They are physical devices.

Hot wallets

These wallets are connected to the internet and are free with exchange websites like Coinbase or Kraken. Hot wallets aren’t physical; they are software that can be installed on your devices or in the cloud.

Hardware wallet (cold)

This is similar to a USB storage device but is built to contain your private key, which is a computer chip within the device. These devices plug into your USB port when you go online to make transactions, then are taken offline for security.

Mobile wallet (cold)

This is a virtual wallet that stores payment card information on a mobile device. Mobile wallets are a convenient way for a user to make in-store payments and can be used at merchants listed with the mobile wallet service provider.

Software wallet (hot)

These software-based wallets are installed on desktop or laptop computers to provide users with easy access to their private keys. The private key is stored within the software, which makes it hot.

Cloud wallet (hot)

This is a web-based wallet. Data is hosted on a real or virtual server. Your private key is stored through a service provider and requires a physical login.