ZoneBitcoin EditorialDo you want to buy bitcoins and now you are hesitating between the different types of bitcoin wallet? We have listed for you the 5 types of crypto wallets that exist. We give you an explanation for each of them. Indeed, especially if you are a beginner, it is not easy.
Depending on your choices, your habits and your use, you will be better able to choose the type of wallet you need.
1. The physical wallet/Hardware Wallet
It is definitely the safest and most secure wallet to keep your bitcoins. Basically, a physical bitcoin wallet is not linked to an online platform or even an internet connection. This means that hackers cannot directly access your wallet.
Physical crypto wallets are a type of USB flash drive that contains all the cryptographic information. All you have to do is plug your key into your computer to access your wallet.
Physical or hardware wallets are designed to protect your private key even if the device they are connected to is compromised by malware. You can even use them with an untrusted public computer. This shows how secure these crypto wallets are!
To send your bitcoins to someone using a hardware wallet, you must connect it to a computer and use a site owned by your wallet brand.
Hardware wallets offer the optimal combination of security and ease of use. Their only limitation is that you have to keep your physical wallet wherever you are if you want to make a transaction.
Also, it has been reported by some users that you should never buy a physical wallet second hand, even if it is a good opportunity. This is because the person who sells you the wallet can keep their password to use the key once you use it. Only buy new wallets!.
One of the most recognized physical wallets for its security is undoubtedly bitbox02. You can also opt for the ColdCard which is also recommended.
2. The paper crypto wallet
Yes, it is also an uncommon but very secure form of keeping your bitcoins safe.
In fact, paper crypto wallets are just sheets of paper with a private key written on them. When you keep your private key on a piece of paper, only someone who can physically access that paper can steal your bitcoins. So simply keep your paper in a very secure place. Some people place this paper in a safe in a bank for example. However, paper wallets can easily be destroyed (it's just paper). It is advisable to create multiple copies so that if lost, your bitcoins can still be recovered.
Another thing to consider is that to send bitcoins to another address, you will need to import your paper bitcoins to a blockchain account. It's very easy and allows you to exchange your bitcoin. So, the paper wallet is best used when you want to keep (hold) your bitcoins and not exchange them.
To get your wallet, please go to https://bitcoinpaperwallet.com.
3. Desktop/computer bitcoin wallets
This is certainly the way the most practical to store your cryptocurrencies. An online bitcoin wallet means any form of bitcoin wallet that is connected in some way to the Internet. This could be a wallet connected to a web service, a wallet installed on a computer connected to the Internet, or even a wallet installed on your mobile phone, assuming you have an active data connection to and from your phone.
Online wallets although the most popular type of wallet, are also the least secure as they are likely to be accessed via internet connections.
You can read the list of the 5 best bitcoin wallets on mobile.
These wallets store your private key on your mobile phone. In fact, I consider these wallets to be the least secure of all wallets. Since phones are frequently lost, broken or stolen, it is strongly recommended to enable two-factor authentication. You must protect your wallet with a password and create a backup with a private key. Also, don't forget to use Google Authentication.
Mobile wallets are very convenient and designed to provide as much security as possible in an insecure environment. However, large sums should not be stored on a mobile wallet unless it is used in conjunction with a hardware wallet.l. This is what we saw above.
These types of online wallets store your private key on your computer. As long as your computer is free of malware or security vulnerabilities, your Bitcoins are safe. However, we all know that this is not the case for most of us. Today it is difficult to be 100% protected. Ce which makes wallets connected to the Internet a prime target for hackers and other malicious hackers.
4. Centralized wallets (on platforms)
Markets, exchange platforms, trading sites bitcoin sports betting for example and other services allow you to have an interesting portfolio. You therefore deposit into their online wallet in order to carry out your activities. These wallets are the least secure option for storing bitcoins. In fact, the operators have the private key of the bitcoins stored on their site. Basically, you're asking someone else to hold your coins for you.
Centralized wallets are also more vulnerable to hackers because they have many vulnerabilities. For example, the site in question, the device you use to connect to the site, or the Internet connection can be hacked to steal your bitcoins.
That said, internet wallets are very convenient because they allow you to buy, sell and send cryptocurrencies at any time.
More capable wallet services, like Coinbase, will provide two-factor authentication options. Or security such as validating each account login with a text message, to protect against external hackers. But remember that to store a large quantity of coins, web wallets are not recommended.
We advise you to avoid the number 1 beginner mistake. It is best to never keep your bitcoins in just one web wallet. And even more so if it is not secure. Trust no one, as they say.
5. Decentralized wallets to navigate DeFi
We end up with the most used wallet among DeFi users. Here, you have your own keys. So, no trusted third party, you are the one who has full control over your assets. There are different types of decentralized wallets. There are even more and more of them. In general, each network can have its own wallet.
That said, decentralized wallets support different networks as well. This is particularly the case for the most well-known decentralized wallet that exists, namely Metamask.
—>We have written a tutorial to find out how to install Metamask.
It is a wallet that allows you to connect to decentralized applications in a few clicks. You will need to write down your mnemonic words in a secure place. Never disclose them to a third party because this is access to your wallet.
Just download it and you can use it immediately. You will have an address where you can send and receive cryptocurrencies.
Truly, it is the ultimate weapon in decentralized finance.
6. “Brain Wallets”
Finally, we will talk about a lesser known type of crypto wallet.
Crypto wallets called “Brain” are just a way to create a private key from a predetermined text or set of words. So instead of getting a randomly generated seed or private key, you can choose a passphrase yourself and use basic algorithms to generate a private key from that passphrase.
However, brain wallets have a major drawback in that they have a higher probability of being hacked. This is one of the least used crypto wallets. This is because users are generally very predictable in terms of passwords or supposedly random text, something hackers know perfectly well.
To try this crypto wallet, some tests were carried out with simple passwords. The results? The funds were quickly stolen. Even worse, a Bitcoin user lost four bitcoins from his wallet after using a private key. For his brain wallet, he used a key from an unknown African poem. This proves that even if you think you've found obscure text for a passphrase... You still risk being hacked...
You now know all the types of bitcoin wallets that exist. Remember that some wallets will satisfy you on several criteria.
See also:
- Bitcoin Security: Why the Network Has Never Been Hacked?
- How to buy bitcoin anonymously and without a bank card?
- Wallet Paper Bitcoin: Here's how to create one easily
Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.
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