Choosing a crypto-wallet for your Web3 journey. (Part 2) -The different types of wallets

What are the different types of cryptocurrency wallets, and which would should you choose?

One of the choices people have to make when deciding on their cryptocurrency wallet is what form it comes in. You might know that a cryptocurrency wallet is made by finding a random number, then applying cryptographic hashing on it to create private and public keys.
If you haven't, and you'd like to learn more. Look at my last post on this topic. read: Part 1

Paper wallets
Hardware wallets
Software wallets.

1 Paper wallets:

The first type of wallet that we'll be discussing is a paper wallet. A paper wallet is a printed piece of paper containing keys and QR codes used to facilitate your cryptocurrency transactions. Users would choose to store their wallets in this form to maximize the security of their assets, ensuring only the holder of the paper can access the funds in the wallet. As of 2016, this method is no longer in use, with people choosing more convenient wallets.

2 Software wallets:

The second type of wallet is called a software wallet. This type of wallet typically takes the form of a browser plugin or mobile application.
Software wallets are created on a web server or site and remain connected to the internet as long as the host device is connected.

By remaining online, software wallets ensure users can trade or interact with web3 projects without delay. For most users, this is the ideal wallet as it provides access to all the conveniences and features of web3 right from their device. The convenience of instant connectivity comes with the trade-off of decreasing overall security, as knowledgeable hackers can access and hack these wallets with little effort. This flaw is especially true if users store big funds in their software wallet.

3 Hardware wallets:

The third and final type of wallet on this list is hardware wallets.

This type of wallet typically comes in the form of a USB stick which can be plugged into a computer to access its contents. Entry-level hardware wallets typically cost between 50 $- 200$ , making them a good choice for those who store more than 200$ in their crypto wallets at a time. The benefit of hardware wallets is that unless they're connected to a computer, the funds inside cannot be accessed. In crypto terms these types of devices allow you to put your assets into "cold storage".

As we've established software wallets' constantly online approach introduces safety threats in the form of hackers, bugs, and malicious contracts.

To recap:

Choose paper wallets if:

You're old
Have trust issues
Only want to do things on paper
You store your money under the bed

Choose software wallets if:

Fast access to assets is a priority.
You use real team financial products
You only hold small amounts of crypto
You are knowledgeable about basic security
You are a developer that wants to build in the web-3 space.

Choose hardware wallets if:

You are a long-term holder of crypto
Instant access to funds is not a priority
You hold large amounts of cryptocurrency
You need additional features offered only by hardware wallets

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