There exists numerous kinds of cryptocurrency wallets to allow users store and access their digital currencies in different ways. The question that is relevant in this context is how far are these wallets secure. Before taking on the security aspect, it really is helpful to understand the various types or types of cryptocurrency wallets which exist today.
Cryptocurrency wallet: Types and varieties
These wallets can broadly be classified in 3 categories:
Hardware wallets and
Cryptocurrency software wallets can again be sub-divided into desktop, online and mobile wallets.
Desktop software wallets: These wallets are meant to be downloaded and installed on desktop PCs and laptops. This specific variety offers the highest level of security though their accessibility is bound only to the computer where they are installed. Moreover, in case, if the computer gets hacked or is virus-infected, there's a possibility that one can lose all her or his money.
Online software wallets: This selection of cryptocurrency wallets operate on the Cloud. Thus, they are able to easily be accessed from any computing device and from any geographical location. Apart from accessibility convenience, this type of digital wallets store the private keys online. The keys are even controlled by third-parties; this makes them easily vulnerable to hacking and theft.
Mobile software wallets: Unlike the two other varieties, mobile software wallets run on smartphones via an app. These can easily be used everywhere, including shops and malls. This range of the wallets is usually much simpler and smaller compared to the normal desktop ones to support with the limited space on mobile handsets.
Difference between hardware and software wallets
Hardware digital wallets vary from the program ones on the aspect of storing a user's private keys. The hardware wallets store the user keys in a hardware device (for instance, the USB). Thus, because the keys are stored offline, these wallets offer an extra security. Moreover, hardware wallets are easily appropriate for many online interfaces and will also handle different currencies. This selection of cryptocurrency wallets is also easy to make transactions with. As Ellipal Titan
, you merely need to plug in the device to any computer, that is connected to the net before entering a PIN, transfer the currency and just confirm the transaction. Your digital currency is kept offline by the hardware wallets and thus, the risk factor or security concern can be much lesser.
Paper digital wallets: This range of digital wallets can be user-friendly and ensures a high-level of security. The word "paper wallet" just identifies the hardcopy printout of a user's both public and private keys. However, taking into consideration the instances, it can also refer to a software application meant to generate the keys securely before printing.