Types of Crypto Walletsawareness
You’ve heard about crypto from your friends and family, and you’re ready to take the plunge, but you don’t know where to start. Some suggest checking out an exchange, while others point you in the direction of a Bitcoin ATM (wink, wink).
No matter which direction you choose, one essential item you’ll need when you get started is a crypto wallet.
What is a Crypto Wallet?
Before we jump into the different types of crypto wallets, it might help to have a better understanding of what a crypto wallet is. For starters, cryptocurrencies - like Bitcoin - are stored on a blockchain. They do not physically exist. A crypto wallet is used to keep these currencies safe and secure.
They also include a private key, which shows that you have ownership over any coins in your crypto wallet. That’s because crypto wallets don’t actuallystorethe crypto; they simply provide the necessary information you need to show that you’re the owner of your coins.
Check out our guide to what crypto wallets are and how they work if you want to learn more.
Different Types of Crypto Wallets
Now that you have a high-level understanding of crypto wallets let’s take a look at the types of crypto wallets available. Keep in mind these wallets have different security features and safety measures, so you may have to do a little digging before you make your final decision.
When you see a crypto wallet refer to itself as a “cold wallet,” that means it is designed to store coins and tokens offline - which makes it harder for hackers and other malicious parties to access your funds.
Many crypto holders who prefer to hold onto their crypto use cold wallets. This is primarily because of the safety these types of wallets provide. Cold wallets fall into one of two categories: hardware wallets and paper wallets.
Hardware wallets are exactly what they say they are - physical devices that store and protect your digital assets. These wallets look and work like an external flash drive. Plug it into your computer’s USB port, follow the on-screen instructions, and before you know it, your cryptocurrency is safely stored on your hardware wallet.
The great thing about hardware wallets is that even when they’re online, your private keys don’t leave the device itself even when they're online. Additionally, hardware wallets provide additional protection from viruses and other malware your computer (and, by extension, your wallet) could succumb to.
A paper wallet is arguably the most secure crypto wallet you can own. These wallets allow you to print out your public and private keys onto a sheet of paper. Many crypto holders who use paper wallets prefer to laminate them and store them in a bank deposit box or in a home safe.
The only interface these types of wallets have to offer is literally a piece of paper. If you want to move your crypto out of your paper wallet, you’ll have to scan the QR code or enter the wallet address provided on the printed document.
Be sure to keep close tabs on your paper wallet. If you lose it, there’s nothing you can do to recover it. A paper wallet is the most secure way to store your crypto, but if someone else gets their hands on it, your crypto is gone for good.
While cold wallets are wallets that don’t establish an online connection, hot wallets are almost always connected to the internet. As a result, they are typically less secure than their cold wallet counterparts.
However, hot wallets offer more features, functionality, and accessibility since they can easily access information. Moreover, most hot wallets are more user-friendly than cold wallets, even if they are more susceptible to hacks.
Here are the most common hot wallets you’ll find:
Users who spend most of their time using a browser may prefer the access that a web wallet provides. These wallets often come in the form of a browser extension, providing users with a way to access their crypto quickly.
Many web wallets also offer an optional smartphone app, which we’ll discuss in a moment. These wallets are usually free, earning their money through transaction fees. There are plenty of web wallets out there, so if you choose this route, take your time and find one that offers the features and functionality you want.
If you live your life on the go, a mobile wallet might be just the ticket. These wallets are explicitly developed for mobile devices, like smartphones or tablets. You’ll need to download and install the app to use a mobile wallet. Even though mobile wallets present some security risks (what if you lose your phone?), they offer incredible flexibility and access to your crypto while you’re out and about.
Like mobile wallets, desktop wallets are applications you download to your PC or laptop. However, desktop wallets are typically more robust than their mobile counterparts, offering access to deeper trading features and capabilities.
Desktop wallets are designed to give users a way to securely store their private keys on the hard drive of their personal computers. With a desktop wallet, you’ll have a convenient way to access your crypto. Since they usually only connect to the internet to perform a transaction, desktop wallets are often non-custodial, which means you’re responsible for your private keys.
Which Wallets Work with a Bitcoin ATM?
Surprisingly, there’s a way to use all of these wallet types with a Bitcoin Depot BTM. Of course, the easiest option is to use a mobile wallet, but a paper wallet will do as well since they typically have a QR code printed on them.
Desktop, hardware, and web wallets are a little more challenging, but you can make it work. You’ll need to find the QR code for each type of wallet and take a picture of it. Then, you can let the Bitcoin ATM scan the image, so it knows where to send your Bitcoin.
Choose the wallet that works for you, then head to a Bitcoin Depot BTM. Scan the wallet address, and before you know it, you’ll have BTC right in your wallet. That’s all there is to it! Visit aBitcoin Depot BTM today.
Nov. 3, 2022