A reliable digital wallet for safe and secure storage is a must when it comes to any crypto operation (be it trading, managing your valuable assets, or crypto exchange). Choosing the right crypto wallet is one of the first things you have to consider when entering the crypto market.
Together with our partners at Enjin, we’re here to explain what crypto wallets are, which types of the wallets exist, and how to choose a digital wallet to protect your funds. Here we go.
Table of Contents
What Is a Cryptocurrency Wallet?
At its core, a crypto wallet is a program/device that stores users’ private and public keys and consequently keeps cryptocurrency in one place. The crypto industry is developing rapidly, and as of 2021, users are able not only to store their funds in a crypto wallet, but also exchange one asset for another, conduct cryptocurrency transactions, interact with decentralized applications (dApps) and blockchains, and so on.
Many cryptocurrency wallets managed to build an ecosystem of products that help beginners to get started on the crypto journey with ease. For example, Enjin (a multi-currency mobile crypto and NFT wallet) enables users to securely store not only regular and well-known assets like BTC, ETH, BNB, and DOT but also non-fungible tokens (NFTs) that are currently gaining momentum.
As mentioned above, the storage of any cryptocurrency in a wallet is based on the principle of public and private keys. Both public and private keys are a long string of letters and numbers used for conducting transactions. A public key encrypts data — this type of key can be shared with other users. A private key is a confidential piece of information that gives access to the funds stored in the wallet. Private keys are used for decrypting data that was previously encrypted by the public key. Changelly and Enjin kindly ask you to learn the first rule of the crypto industry by heart: never (ever) share or expose your private keys to anyone.
Hot vs. Cold Crypto Wallets
Cryptocurrency wallets can provide two types of storage: cold storage (a wallet that is not connected to the Internet) and hot storage (the one that is connected).
Hot storage includes any digital wallet that is capable of storing your cryptocurrency. The biggest advantage of such wallets is that they provide you with instant access to your funds (e.g., Enjin).
There is a great stereotype about hot wallets that they are less secure. As of today, hot wallets are protected by top-notch security features that provide safe storage and quick access to funds. Enjin mobile wallet enables you to keep Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH) and ERC-20, ERC-721 token, and other cryptocurrencies in a safe and secure manner. The wallet uses two-layer encryption, RAM encryption, secure keyboard, recovery phrase which protect your digital assets at the highest level. Download Enjin on your Android and iOS devices seamlessly.
Cold storage refers to hardware wallets — portable physical devices that store your crypto assets offline. However, a paper wallet (which is basically a piece of paper with written/printed public and private keys) is considered the most secure crypto wallet since it is nearly impossible to hack it (spoiler alert: it is still possible to lose or ruin it).
Still, we kindly remind you that DYOR — doing your own research — is vital when it comes to any online activity.
Types of Cryptocurrency Wallets
Software Crypto Wallets
There are several types of software wallets, including mobile, desktop, and web.
Mobile crypto wallets provide you with quick, convenient access to the funds — your crypto assets are always with you. Multi-currency mobile wallets let you manage your cryptocurrency in the most secure way. Mobile wallets like Enjin went under an extensive independent security audit, and penetration tests found no security issues. What’s more, Enjin allows you to interact with dApp with just several clicks, which considerably facilitates the process of entering the crypto industry.
Good news, everyone! From September 27 by October 3, you can exchange your crypto assets at floating rates with zero commission fees within the Enjin Android application. Hurry up to get cryptocurrency at the best rates with no commission charged!
A desktop wallet is a program downloaded to your computer or laptop that allows you to manage your crypto assets.
Desktop wallets can be thin and thick. Thin desktop wallets need you to download only the wallet’s software program. Such wallets can be easily installed on your computer, and they don’t require much space. In the case of thick wallets, both the program and the blockchain of a particular cryptocurrency are downloaded to your device.
Web wallets work in the cloud or on specific web resources (for example, cryptocurrency exchanges) accessible from any device connected to the Internet.
At first glance, this could be an ideal option altogether — an external resource, excellent access conditions; plus you do not need any extra equipment or to install any software at all (everyone has browsers), everything is stored in one place, and you only need the Internet connection.
Hardware Crypto Wallets
Hardware wallets are cryptocurrency wallets that store your private keys offline, yet in order to initiate a transaction, you need an Internet connection. Using them is quite simple: you need to connect the storage medium to a computer with Internet access, enter the PIN code, and perform the necessary actions.
Paper Crypto Wallets
Paper wallets are considered the most secure. Private and public keys are printed on paper in the form of a QR code or a set of numbers and letters. To make any manipulations with the wallet, you need to scan the code or enter the keys yourself. Paper wallets are easy to create, but there are some downsides to such storage. Paper wallets quickly deteriorate, so most often, they are laminated. If you lose the key to such storage, you won’t be able to restore access to your crypto assets.
Choosing a Wallet: Tips
When choosing a cryptocurrency wallet, one should pay attention to the following points:
- Learn about the security of a wallet. Find out whether it takes proper safety measures.
- Nativity of UX/UI is important when it comes to daily usage. Enjin mobile wallet has an intuitive interface and user experience – simplicity and utility in one beautiful application.
- If you are a proficient crypto investor, you probably know how to diversify your portfolio. Check whether a wallet allows you to store cryptocurrency of different blockchains. Enjin wallet enables crypto storage of the leading cryptocurrencies like BTC, LTC, ETH, DOT, KUS, and a range of ERC-20 and ERC-721 tokens.
- DYOR. As we said above, doing your own research is a must. It is also recommended to search for information about a particular wallet on social networks where real users share their experiences.