Choosing a wallet for you cryptocurrency is a critical component in buying Bitcoin and other cryptos. You must consider security, ease of use, ability to transact, storage capacity on your computer and affordability.
Wallets are also referred to “storage” or how/where to store your bitcoin or other cryptocurrency.
Hot wallet (Also called an ‘online wallet’ or ‘web wallet’): This is a wallet that is hosted online; a wallet that stores your coin on the internet.
An example of this is Coinbase wallet or Blockchain.info wallet.
Hot wallets are easily accessible and can be used for transactions straight away.
Software wallet: A software wallet is a wallet that lives on your computer desktop. It has higher security than a hot wallet as it lives on the hardware of your computer (instead of online through an internet connection).
This wallet can also be used for immediate transactions; however, you need to have enough computer storage to house your software wallet.
To create a software wallet, you must download the Bitcoin blockchain as a file onto the computer desktop you want to use. To use the desktop wallet, your computer must have at least 20 gigabytes of space.
Check out how to use a software wallet!
Cold Storage (Also called offline wallet): Cold storage is a method to store your cryptocurrency. Cold Storage is completely disconnected from the internet. An example of this is a hardware wallet or paper wallet. Cold storage is the safest way to store any crypto you acquire.
Paper Wallet: A paper wallet is a physical piece of paper containing all of the data necessary to generate any number of Bitcoin private keys. You can make a paper wallet yourself.
Hardware Wallet: A hardware wallet is a cold storage wallet which uses a external hardware devices. This is the safest way to store your cryptocurrency.
It requires time storing your coins as well there is cost involved (you have to buy a hardware wallet, such as Nano Ledger or Trezor).
