Theoretically, the money of a Forex trader should be stored in a bank in segregated accounts, which guarantees their safety. True, the trader does not know the account number, or sometimes even the bank itself. And this is to some extent a stumbling block – it makes sense to invest money, if it is not clear where they are going. A similar situation with cryptocurrencies: traders’ confidence in the exchanges after a series of hacks and locks (a vivid example – the situation with the MTC exchange) has fallen and not many traders leave the cryptocurrency on the accounts of the exchanges. And about what is the alternative to exchanges, about the best wallets for cryptocurrencies, read on.
The best wallets for cryptocurrency
Options for where cryptocurrency can be stored are divided into two large groups: online services and “cold” (offline) storage.
- Online wallets. They are Internet services that provide cryptocurrency storage services. These are platforms where you can not only open different cryptocurrency wallets, but also carry out exchange operations, trade on the stock exchange, etc. Calculators are built into the best cryptocurrency wallets.
The advantages of online wallets:
- quick registration;
- lack of verification. Storing cryptocurrencies on wallets anonymously. Anyone can see how many cryptocurrencies are on the wallet, but the wallet owner is unknown;
- possibility of opening a multi-currency account.
Disadvantages of online wallets:
- risks. Security online services in question. They can also be hacked, some of them are deliberately created for fraudulent purposes;
- Transaction fees added to exchange fees.
When choosing a service, pay attention to which exchanges it works with and how many support cryptocurrencies. For security reasons, keep the cryptocurrency on different wallets, make sure that there are no viruses that read passwords, watch the actions of the operating system, which may accidentally delete the wallet files from your computer. Backup your wallet (wallet.dat file).
- Offline storage. This storage of cryptocurrency in the system, disconnected from the Internet. Possible options:
- hard drive. The hard drive creates its own wallet, which can be downloaded on the Internet. It is installed as an ordinary program and is constantly updated. The advantage is safety. The disadvantage is a large database of constantly updated data (from 100 GB), the complexity of recovery in case of hard disk failure. The best wallets for cryptocurrency: Electrum, Armory, Bitcoin Core;
- mobile wallet. Mobile application that stores the secret keys of crypto addresses and allows you to pay for goods. Because of the impossibility of constantly updating the database, the blockchain is used as a transit wallet, but it is not a full-fledged wallet. The best wallets for cryptocurrency: Mycelium, Xapo, Bitcoin wallet;
- hardware wallet. Special devices with a designated purpose – the storage of keys in electronic form and the implementation of transactions. While they are few, but their popularity is growing. They are preferred by those who work with large volumes of cryptocurrency and do not rely on third-party services. Best cryptocurrency wallets: KeepKay, Flash Ledger USB Bitcoin Wallet;
- paper wallet. The service is available at some services. The essence of the service is a printout on paper of a picture with QR codes: with a public address and a private key. Example: bitaddress.org.
Each option has its pros and cons in terms of transaction speed, security, etc. And which storage option do you use cryptocurrency?