Here we take a closer look at all popular forms of cryptocurrency storage to help you choose the best storage style for your Bitcoin.
Cryptocurrencies are nothing but digital currencies that have been created based on blockchain technology. Among all the popular forms of cryptocurrencies, Bitcoin is known to be the most famous one, which has gained immense attention among keen financial investors. One such great platform is Bitcoin Storm where you can easily store cryptocurrency and engage in daily trading.
Since the inception of bitcoin, there has been a lot of buzz surrounding the cryptocurrency and has reached an all time high in recent years. These days keen financial traders are showing huge interest in cryptocurrency investment.
One of the biggest concerns for these people is keeping their cryptocurrencies safe. There have been various records of stolen cryptocurrencies. According to the research report, about 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. But just like the problem of choosing a safe bank, so is choosing the perfect wallet for your cryptocurrencies. We can categorize cryptocurrency wallets into two types, cold storage wallets and hot wallets. Let’s get along better with them.
Wallets for cold storage – a brief overview
Cold wallets are considered the most secure 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, making them inaccessible to hackers and fraudsters. That is why we see many people opting for this type of wallet.
Types of cold wallets you should know
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 they can safely store either in their home or in the bank safe. 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 for the transfer.
Although paper wallets are known to be much safer, there are still potential risks. When generating paper wallets, you need to trust where you get them made. Therefore, you should be careful with such errors and do not store 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. But one may wonder how to carry out their daily business activities using this type of storage. All you have to do is sync it with software that allows you to view your portfolio at any time. It is therefore one of the most secure methods of storing cryptocurrencies, a disadvantage 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 require an internet connection at all times. You can either choose an exchange whose wallets act as your storage device or choose other sites that only provide wallet services. The most commonly used online wallets are those from 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. Although there are many advantages to using such wallets, it is generally recommended to use hot wallets only for small crypto holdings.
Since these are completely online, there is a risk of your wallets being hacked and you losing all your crypto holdings. 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 want to spend your cryptocurrencies.
Disclaimer: The information contained herein is provided without regard to your personal circumstances and should therefore not be construed as financial advice, investment recommendations or an offer or solicitation to trade in cryptocurrencies.