Here, we take a close look at all the popular forms of cryptocurrency storage to help you choose the best storage style for your Bitcoin.
Cryptocurrencies are nothing more than digital currencies created on the basis of blockchain technology. Out of all the popular forms of cryptocurrencies, Bitcoin is known to be the most famous one that has attracted tremendous attention among avid financial investors. One such great platform is Bitcoin Storm, where you can easily store cryptocurrency and engage in daily trading.
Since bitcoin’s inception, there has been a lot of excitement around cryptocurrency and in recent years it has reached an all-time high. These days, avid financial traders are showing immense interest in investing in cryptocurrencies.
One of the main concerns of these people is to keep their cryptocurrencies safe. There have been various records of cryptocurrencies being stolen. According to the research report, around 3 million bitcoins are lost forever. We have also seen reports of hackers stealing bitcoins when they are at the end of their journey to wallets.
It is therefore essential that people choose wallets that can provide them with maximum security and store their cryptocurrencies. However, just like the problem of choosing a safe bank, so too is choosing the perfect wallet for your cryptocurrencies. We can classify cryptocurrency wallets into two types, cold storage wallets and hot wallets. We get along well with them.
Cold storage wallets: a brief overview
Cold wallets are considered to be the safest wallets. This is because they are essentially offline wallets. Many people prefer to use cold wallets when it comes to storing their traded cryptocurrencies. These wallets do not require an internet connection, which makes them inaccessible to hackers and scammers. Hence, we see many people opting for this type of wallet.
Types of cold wallets you should know about
There are different types of cold wallets which are as follows:
1. Paper wallets
In this wallet system, users receive a printed copy of their public and private key. It is a plastic-coated piece of paper that can be safely stored both at home and in the bank locker. This makes it very easy to transfer cryptocurrencies. You can choose to import the paper wallet into the software or you can also scan the QR code present for the transfer.
Even though paper wallets are known to be much safer, there are still potential risks. When generating paper wallets, you have to trust where you get them. Therefore, you should beware of such mistakes and don’t keep your paper wallet on your laptop.
2. Hardware wallets
These are the physical devices that store cryptocurrencies. Hardware wallets often remain in the form of a hard drive or USB stick. These are completely offline. However, you may be wondering how to conduct your daily business activities using this type of storage. Simply, all you have to do is synchronize it with software that will allow you to view your portfolio at any time. It is therefore one of the safest methods to store cryptocurrencies, one downside is that they can be quite expensive.
Hot Storage Wallets: A Brief Overview
All online wallets are generally referred to as hot wallets. Hot wallets always require an internet connection. You can choose an exchange whose wallets act as a storage unit or choose other websites that only provide wallet services. The most used online wallets are those of the exchange platform. For example, if you register on an exchange platform for trading purposes.
You will likely use the same platform to store your cryptocurrencies. While there are many benefits to using such wallets, it is generally recommended to use hot wallets only for small crypto holdings.
Since they are entirely online, there is a risk of your wallets being hacked and you will lose all your cryptocurrencies. Therefore, it is recommended to be very careful when choosing an exchange platform.
So here are some things you should know about crypto wallet options. When choosing a wallet to store your cryptocurrency, you should keep in mind the features you want your wallet to have and also how you will use your cryptocurrencies.
Disclaimer: The information contained herein is provided regardless of your personal circumstances and therefore should not be construed as financial advice, investment advice or an offer or solicitation for cryptocurrency trading.