The advent of cryptocurrency has changed the way people look at investments. People skeptical of investing in this relatively new asset class are now flocking to buy the seemingly lucrative cryptocurrencies. Of all the digital currencies available today, Ethereum enjoys a dominant position. It is often referred to as the second-most popular cryptocurrency that has the potential to replace Bitcoin in the coming years. If you’re willing to start your crypto journey with it and want to know how to buy Ethereum, we’d suggest purchasing using a reliable crypto exchange.
But the real question arises after your purchase. Where should you store your purchased Ethereum? Are crypto wallets safe? What are the most popular crypto wallet types? You can have many similar questions related to Ethereum storage, and this guide is here to answer those questions.
What are Crypto Wallets, and Why Do You Need One?
In simple terms, crypto wallets are nothing but cryptocurrency storage mediums. Just like you store your money in a bank’s savings account, you can save your cryptocurrency in a crypto wallet. More investors are now inclined towards buying a crypto wallet because it reduces the chance of their owned cryptocurrencies getting hacked from poorly secured exchange wallets.
Numerous instances of cryptocurrency hacking were reported in the past, wherein investors were robbed of their purchased cryptocurrency. If you don’t want something similar to happen to you, invest in a good crypto wallet today and transfer your purchased Ethereum and other cryptocurrencies to it.
Types of Crypto Wallets You Can Purchase If you buy Shiba Inu coin, Ethereum, or any other cryptocurrency, you can choose to store them in any of the following crypto wallets securely:
Hot Wallets
Have you seen popular online or app-based wallets that remain connected to the internet? Those are called hot wallets. Although these wallets provide enhanced accessibility, they offer relatively less security than cold wallets. There are three types of hot wallets available in the market-
● Mobile Wallets
Mobile wallets can be best defined as mobile-based wallets that can be downloaded to your phone. They work similar to desktop wallets and offer greater flexibility in exchanging funds. The only downside of mobile wallets is they’re slightly vulnerable to security risks.
● Web Wallets
The most common type of hot wallet is a web wallet. These wallets ensure anyone with internet access can take advantage of the services provided by web wallet providers. What makes them popular is their easy accessibility. You don’t have to download any app to access the wallet.
● Desktop Wallets
As the name suggests, desktop wallets refer to the crypto wallets you have to download on your desktop to use. This software will generate a data file to hold the crypto keys of the users. Since a computer isn’t 100% safe from malware/virus attacks, storing Ethereum in desktop wallets can be risky.
Cold Wallets
If you want to keep your purchased cryptocurrency away from the reach of hackers or potential online scammers, you should invest in cold wallets. There are generally two types of cold wallets in the market:
● Hardware Wallets
Have you seen a flash drive before? A hardware wallet looks the same. It provides maximum security as it stores private keys away from an online environment- something a hacker cannot get access to. Whenever you want to access your cryptocurrency, simply plug in the hardware wallet to a computer. The best part of owning hardware wallets is even when they’re connected to the internet via a computer; they don’t let the private keys leave the hardware device.
● Paper Wallets
Paper wallets are not the best type of cold wallets, but still better than most hot wallets. As paper wallets offer additional security, many investors have started using them over the past years. These wallets are nothing but physical pieces of paper containing the required details needed to access cryptocurrency. Although storing details in paper wallets keeps it away from the reach of hackers, you can lose all your investment if you accidentally miss this paper somewhere.
Keep Ethereum Away from the Reach of Hackers
Now that you’re aware of the various types of crypto wallets, you can pick the one that best matches your requirement. Most seasoned investors use a hybrid approach for securing their cryptocurrency, so can you. If easy accessibility is also a key factor, you may want to stick to hot wallets. But if you’ve invested a significant amount of money in Ethereum or other cryptocurrencies and don’t want to take any risk, you should side with cold wallets.
