In order to be able to hold any sort of cryptocurrency, you will need to have a wallet specifically designed to hold the coins you want to have. Some sites offers you the possibility to hold several types of coins within one single wallet, while in other cases you will need to have several different wallets to hold the coins you own.
The different types of wallets comes with different levels of security and access, so there is options for the person who wants to be as safe as possible and for the persons who wants to have access to their coins wherever they may go. It can be hard to know exactly which options you have as a newbie to the cryptocurrency world as well as knowing which option is best for you. Luckily you have us and we have created this small guide to tell you all about the different wallet options that exist on the market, how they work and how secure they are in general. With this information you should be able to figure out which solution that sounds best for you and help you towards making a choice. Let's have a look at the different types of wallets.
The most commonly used type of wallet for new users and for people who trade a lot is the web wallet. The web wallet is commonly offered from the large cryptocurrency exchange sites, where you can hold all the different coins you have purchased and transfer or sell them fast. The reason that it is the most commonly used is not only because of the easy transfer and sell options, but also primarily because it is so easy to purchase different cryptocurrencies on these sites, making it fast and easy for new users to begin having coins.
Web wallets are also great because of the fact that you can access them from all over the world, as long as you have an internet browser. This allows you to always get access to your coins, should you need to a transaction or pay for something with them. The main issue with this is of course that there is always potential risks having lots of funds online, due to hacker attacks or similar. Despite the fact that the web wallet sites do what they have to do security wise, they cannot control your computer and see if you have got any malicious software or similar on it, which hackers will use to steal funds from your account.
Because of this we recommend that you always have your anti-virus program completely up to date, to avoid any potential Trojan viruses or similar, taking your personal information. Furthermore we recommend that you use a unique and very strong password for your account, so that if a guy tries to hack your account without having your password, he will not be successful.
Overall web wallets are very safe and rarely have any problems of any kind, it is usually the user who is not aware of his need of security while using the internet that loses coins. If you are just being clever when you use your web wallet, you should never encounter any sort of problems. The basic tips for you is to always have an updated version of the anti-virus, never provide your username to anyone and to use unique and strong passwords and then you should be fine.
Some of the most reliable and secure Bitcoin/cryptocurrency web wallets are from Coinbase, AlfaCashier and Cryptsy, where you can buy, store, send and sell your coins as you wish without any hassle or problems. Choosing a reputable site is one of the keys to avoiding issues with having coins stolen.
Software wallets is another popular solution for many of the more experienced cryptocurrency traders, as it provides you with complete control over your coins. This means that no one else can access your account, see your balances or anything similar. However it also means that if you get hacked or have your computer stolen with the information inside, there is nobody but you to cover the losses.
The pros of using the software wallet is of course that you are less likely to lose any funds if a hacking group decides to target a large web wallet service and steal the funds from there. Furthermore you can only access your coins from your own computer, but most importantly it is possible for you to do a backup of your entire database in the wallet, ensuring that should someone try to hack your account it is possible to back track everything and take the funds back.
The cons is that the solutions limits you in terms of using coins and means that you have to have several different wallets as each coin has their own wallet. You will also have to be on your computer every single time you need to transfer, sell or use some of the coins. The software wallet is more secure, but also more limited than the web wallet.
Mobile wallets is primarily used to hold a small portion of your coins, which you can use to transfer to other users or to pay in online and physical stores. With more and more stores integrating Bitcoins and LiteCoins as a payment method all over the world, it can be a good idea to hold a small portion of your coins in a mobile wallet in case you should need to pay something.
Large Bitcoin payment processing companies are constantly working on improving payment systems for merchants and users and regularly release new applications that users can download to their Smartphone and use across the globe. It has an integrated feature where you can simply scan a QR code and then the application will know exactly what to charge you and to where, which you simply just have to accept and you will receive your goods. Mobile wallets are the wallets of the future and is becoming more and more popular along with the increase in merchants accepting Bitcoins and LiteCoins.
Hardware wallets is by far the most secure way of storing any coins you may have, but is also the worst in terms of usage. Hardware wallets allows you to store your coins on a secure drive, which you can unplug from the internet and simply store wherever you want to. This means that nobody in the world can access your coins without having the hardware wallet drive, which can be something as simple as a USB key. Furthermore it is also resistant to the computer viruses that can steal coins from your software wallet, should you keep the drive inside your computer while you are using it.
Hardware wallets are usually not necessary for most users, but should you have a high amount of coins, worth a small fortune, then it is something that you should consider investing in.