Crypto Wallet For Beginners – A Complete Guide

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Crypto Wallet Explained

In today’s cryptocurrency world, we need the safest and best crypto wallet for cryptocurrency.

Crypto wallets help in accessing and transacting cryptocurrency. There are different types of crypto wallets available for different purposes.

According to the Newyork times, Lost individuals cannot retrieve because they lost the password of their wallet. 

So, avoiding this type of thing you read this article carefully. 

There are some common questions that you must need to know things like.

  • What are crypto wallets?
  • Types of crypto wallets?
  • Which is the safest crypto wallet?
  • Why do you need crypto wallets?

Read this article till the end for understanding all about crypto wallets. And this article helps to select the safest crypto wallet.

Why Do We Need Crypto Wallet?

  • Choosing the wrong crypto wallet can be very dangerous for you. Because all cryptocurrency is accessed by private keys.
  • Crypto wallets allow you to transfer and receive your cryptocurrency.

Read About Blockchain Technology and how It works

What is Crypto Wallet? 

A Crypto Wallet is an app or device or software or extension that allows cryptocurrency users to access, manage, spend, and retrieve their digital assets with the help of a private key or seed word. It is a line of codes that lets you interact with the blockchain. 

It is very similar to online payment gateways like PayPal, UPI, etc.

Your digital asset is stored in the blockchain which you can restore anytime cryptocurrency with the help of seed word or private key in case of losing your phone.

For Example, You can send, receive, and access Cryptocurrencies like Bitcoin, Ethereum, etc.

There is various type of crypto wallet available for different purposes.

Example of Best Crypto Wallets,

  • Metamask:- This is a type of hot wallet that allows users to manage and store account keys, transfer and receive Ethereum cryptocurrency. It offers a mobile app, and web browser extension to navigate the world of dApps. 
  • Trust Wallet: This is the best wallet to store multiple cryptocurrencies and tokens.
  • Phantom Wallet: This wallet is best for Solana cryptocurrency transfer. All the Solana-based dapps support phantom wallets. It is also available in the mobile version.
  • Ledger Nano X:- This is a highly secure and best wallet for storing private keys and seed words, as well as managing your crypto and NFTs. It can be connected via Bluetooth, USB with your phone.

leder x nano crypto wallet

How does Crypto Wallet Works?

Before understanding the working of Crypto wallets we need to understand what private and public keys and how they are related to crypto wallets.

Along with creating a crypto wallet, you also get a public and private key associated with your wallet.

For Example:– You can understand it with your email. For getting an email a person needs our email ID.

But he can’t send an email from my account because he also needs our email Id password for sending email through my account.

Now, a blockchain wallet follows a similar process like this. 

Here, Public key = Email ID

And Private key = Email ID + Password

So, you can share your public key with anyone for receiving cryptocurrency. 

But the private key is a secret key that is similar to an email password, you don’t disclose it to anyone. 

You can use a private key to spend your fund. Without this private key, you can’t access your crypto wallet. 

5 Different Types of Crypto Wallet

Every crypto wallet is associated with both private and public keys. And they have different features and we can use these wallets for different purposes.

So, you can categorize these wallets as per your need.

1. Mobile Crypto Wallet 

Mobile crypto wallet

A mobile crypto wallet (a type of hot wallet) is an app that is installed on a mobile device to store a user’s transaction data, private keys and helps for transferring and receiving crypto from another person.

A mobile crypto wallet is a very popular and most widely used crypto wallets type. With it, we can easily access cryptocurrencies like bitcoin and altcoins. 

The mobile Crypto Wallet is available for both Android and iOS systems.

Why is Mobile crypto wallet so popular?

You get lots of features with a Mobile wallet, including

  • Elegant UI – Simple and Easy to use 
  • You can control all your private keys
  • It provides backups and restores feature
  • An active Development Community is available 
  • This is capable to run different Operating System
  • This is the fourth most secure crypto wallet for doing fast transactions

Some Examples of the Mobile crypto wallet

  • Trust Wallet
  • Safepal
  • Mycelium
  • Phantom wallet (Solana)
  • Terra station wallet (Luna ecosystem) Android version | iOS version
  • xDefi wallet

2. Desktop Crypto Wallets

desktop crypto wallet

Desktop Crypto wallet is a type of hot wallet that is installed in every desktop’s operating system like Mac, Windows, and Linux. This crypto wallet helps to manage and store private key and transaction data for your altcoins on your computer’s hard drive. 

To keep your desktop crypto wallet secure, you need to follow basic security measures such as antivirus, anti-malware software, and a strong firewall on your desktop.

A desktop crypto wallet is the third most secure wallet to store your altcoins. There are many desktop wallets available to manage your crypto.

  • Exodus
  • Bitcoin Core
  • Electrum

3. Paper Crypto Wallets

Litecoin paper crypto wallet

A paper crypto wallet (type of cold wallet) is a printed piece of paper that contains your private keys and QR codes.  This private key or QR code is used to facilitate your cryptocurrency transactions. 

Paper wallets were considered more secure than other wallets because they are removed from the internet.

Bitcoin was introduced in 2008, at which time only paper wallets were the only secure way to access or transfer bitcoins.

With the increase of technology advancement and crypto adoption, there are now various types of wallets available for digital assets. 

You can keep safe your private keys offline, it is the second most secure way to store your altcoins or digital asset. You will easily find paper wallets for popular cryptocurrencies.

4. Hardware Crypto Wallet

A hardware wallet is a type of cold wallet that is the safest way to store a user’s private key or cryptocurrency. Keeping a hardware wallet is a must if you have lots of cryptocurrencies.

This is basically a type of hardware device that is specifically built for securely storing private or public keys and seed words. 

This hardware wallet looks like a USB-like device with a side button and OLED screen. You need to connect this wallet to a PC or mobile device via USB for accessing, transferring, and managing cryptocurrency. It provides a high level of security to your digital asset.

Here I showed you a popular Ledger Nano X wallet (hardware wallet) in which you can see navigator buttons and screen. 

Ledger Nano X - Secure your crypto

You can also connect your pc via Bluetooth. 

Mostly a hardware wallet cost is around $35-$450. But it is best for keeping your private key safe. 

Many hardware wallets allow you to store 22 cryptocurrencies, NFTs, and 500 ERC-20 tokens.

Here, I write some popular hardware wallets for securing your digital assets.

5. Web Crypto Wallet

Web crypto wallets are a type of hot wallets that are always available on the internet and can be accessed via different web browsers (like chrome, firefox, opera, and IE). 

let’s Understand with a simple example of the web crypto wallets that are storing cryptos on a crypto exchange. In case the exchange got hacked or shut down then you would lose your cryptocurrencies.

Sometimes Web wallets are hosted wallets that mean you do have no access to a private key but in the non-hosted wallet, you have full control over the cryptocurrency.

I always recommend using non-hosted wallets so that you always control your funds.

Some non-hosted crypto wallets

  • MyEtherWallet
  • MetaMask
  • Some hosted wallets:

Some hosted wallets:

  • Binance (The best)
  • Coinbase
  • CEX.io

Two Different Types of Crypto Wallet

Mainly two types of crypto wallets are available for storing your private key and managing your fund.

  1. Hot Wallet 
  2. Cold Wallet

Types of Crypto Wallet

Difference Between Hot and Cold Wallets…

Hot Wallet Cold Wallet
A digital format of crypto wallet that you can remotely access from your phone or desktop devices and it is connected to the internet. 

It is not secure from hackers because of the internet.

You can easily and fastly transfer your crypto. This wallet is also helpful for trading.

For Example Trust Wallet, Binance wallet, Metamask, etc.

A physical format of crypto wallet that keeps your cryptocurrency safe offline. It looks like a USB device that is easily connected to your mobile device.

It is highly secure from hacking. 

It takes time to transfer cryptocurrency. You can’t trade with this wallet.

For Example Ledger Nano X wallet or paper wallet

 

Which is the Safest Crypto Wallet?

Using cold crypto wallets or hardware wallets is a highly secure method for storing your cryptocurrency. Because it keeps your seed word and private keys offline. So, this wallet can’t be accessible by hackers or spammers. For Example Ledger Nano X and Trezor Wallet are the two best hardware wallets.

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