This article will discuss how to store cryptocurrencies safe 2018 with regards to online wallets, hardware wallets, desktop wallets and paper wallets. The main goal is to provide you with information regarding what wallet is the most secure. We also provide a brief guide on what kind of transactions each option should be used.
Holding bitcoins without a proper security can land you into all sorts of trouble these days. Without proper wallet protection, hackers can easily reach out for your balances and strip you of the coins you worked for. This article proposes different types of cryptocurrency storage products, listing out pros and cons for each type.
Crypto Wallets - What to Look For
There are numerous wallets out there that can store cryptocurrencies safe. They come with different platforms, features, and functions. Each of the wallets is unique in terms of storage services they provide. Thus, the main issue is how to evaluate them in terms of safety of the assets that you wish to stash. We made a list of indicators that you should look for when choosing crypto wallet platform.
1) Wallet supports balance in both online and offline environment
2) The keys are generated privately and not from a server
3) There are several platforms available, like mobile apps, desktop (Windows/Linux/Mac), web page, hardware device
4) Transfers out have their own private password
5) Recovery Key (passphrase) that is generated by your device
6) There are additional security functions, such as two-factor authentication (2FA), email notifications, balance and login history, etc.
Online platforms, also known as “hot” wallets, are quite popular when it comes to small and fast transactions. They are easy to use and understand, as they are geared towards instantaneous trade and transfers. Online wallets are based on web pages, where owners of the website maintain the coin storage, as shown in the example below. Registering an account at these wallets is in most cases free of charge.
Keys like passwords, PIN codes and passphrases are generated by the system, which is the main weakness of this type of crypto storage. Additionally, the server’s safety depends on the owner’s protection softwares and anti-hacking tools. Thus, the “hot” wallets are considered as one of the weakest in terms of security they offer.
- easy to use
- most of the time free to create and use
- used for instant transfers and ease of transactions
- They are the least secure of all options
- Operate only in online environment as they depend on servers
- Keys are not private
Unlike online “hot” wallets, hardware (HD) devices offer services in both online and offline environments. The cold storage comes with numerous security goodies that are simply unmatched by other wallet types. You generate the keys since the device does not depend on server’s status. You create your own recovery passphrase, username, and password. You can also create PIN code without the need to register the said key online with the manufacturer.
Additionally, in most hardware wallets, you have physical buttons that need to be pressed in order for the transaction to take place. Taking everything into account, it can be safely said that hackers would have very hard time reaching your balance. The most famous examples are KeepKey, TREZOR, and Ledger Nano S. They are small in size and can be carried around with you, as shown below.
- Ability to function in both online and offline environment
- All keys are privately generated
- Server’s downtime does not affect the HD wallet
- Has physical buttons that need to be pressed for transaction to take place
- Come with a high price tag
- Can be complicated for beginners to set up and use
- Can be broken or lost
Much like hardware wallets, desktop cold storage also functions offline, as well as online. The wallet can be installed, usually for free, in a variety of OS, including Windows, Mac, and Linux. These programs generate their own private keys and have relatively the same functions and security features as hardware wallets.
The catch with these types of storage capacities is that they usually are very complicated to handle. Without slight programming knowledge, you might find yourself lost in setup and maintenance of the wallet. Another issue lies in the fact that, although wallet itself might seem impenetrable, your computer is not. Viruses might delete the program and your coins, or hackers can gain access to your funds through your PC.
The most famous examples of desktop wallets are Armory, Electrum, Exodus, and Electrum, as shown below.
- Operates ion both online and offline environments
- Private keys
- Free to download in most cases
- Complicated to setup and use for starters
- Can be affected by viruses and hacks on your computer
- Can take large space on your disk
Paper wallets function as any other cold storage wallet though it has several storage aspects that need to be mentioned. It is virtually impossible for hackers to get a hold of your address code unless you give them, as it is not based online. It is quite hard to set up the paper wallet, especially if you are cold storage and programming rookie.
Moreover, you can lose the wallet as you carry it around with you or someone might steal it from you. You can check out one of these wallets in the picture below.
- Cheap to purchase
- Cold storage capabilities (online and offline)
- Can hold only one cryptocurrency in most cases
- Very hard to setup and use for starters
- Balance can be inquired either online or by writing it down
- Can be physically destroyed
In this article we have discussed how to store cryptocurrencies safe 2018. Beginners might find online wallets as a good starting point though we would advise you not to keep large quantities there. If you want real security with the somewhat easier setup process, a hardware wallet is a choice for you. Example of hardware wallets are Trezor, Keepkey and Ledger Nano S. Computers and paper wallets can be penetrated as well while their setup is a complex business. Crypto hardware wallets might come with the highest price tag when compared to other crypto storage types but they are unmatched in safety they provide.