Everything You Need To Know About Cryptocurrency StorageAug 4, 2022, 5:54PM
Here we take a close look at all the popular forms of cryptocurrency storage to help you decide the best storage style for your Bitcoin.
Cryptocurrencies are nothing but digital currencies that have been created based on the technology of blockchain. Among all the popular forms of cryptocurrencies, Bitcoin is known to be the most famous one that has gained huge attention among enthusiast financial investors. One such great platform is Bitcoin Storm, where you can easily store cryptocurrencies and participate in daily trades.
Ever since the creation of bitcoin, there has been a lot of buzz around cryptocurrency and has reached an all-time high in recent years. These days, enthusiast financial traders show immense interest in cryptocurrency investment.
One of the major concerns for such people has been storing their cryptocurrencies safely. There have been various records of cryptocurrencies being stolen. As per the research report, around 3 million bitcoins are forever lost. We have also seen reports of hackers stealing away bitcoin when they are end route to the wallets.
This makes it essential for people to choose wallets that can provide them with the utmost security and store their cryptocurrencies. However, as is the problem with choosing a safe bank, the same exists when choosing the perfect wallet for your cryptocurrencies. We can categorize cryptocurrency wallets into namely two types, cold storage wallets and hot wallets. Let us understand more about them.
Cold Storage Wallets - A Brief Overview
Cold wallets are regarded as the most secure wallets. It is because these are essentially offline wallets. Many people prefer using cold wallets when it comes to storing their traded cryptocurrencies. These wallets don’t require an internet connection which makes them inaccessible to hackers and scammers. Hence, we see many people opting for such kinds of wallets.
Types of Cold Wallets To Know About
There are different types of cold wallets which are as follows-
1. Paper Wallets
Under this system of wallets, the users are presented with a printed copy of their public and private key. It is a laminated piece of paper that they can safely store either in their house or in the bank locker. It makes transferring cryptocurrencies very easy. You can choose to import the paper wallet to the software or you can also scan the QR code present for the transfer.
Even though paper wallets are known to be much more secure, however, there are still some potential risks. When generating paper wallets, you have to trust where you are getting them made. Therefore, you should be careful of such mistakes and not store your paper wallet on your laptop.
2. Hardware Wallets
These are the physical devices that store cryptocurrencies. The hardware wallets often remain in the shape of a hard drive or a USB. These are completely offline. However, one might wonder how to conduct their daily trading activities using this type of storage. Simply, all you have to do is sync it up with software that will you to view your portfolio at all times. Hence, this is one of the most secure methods of storing cryptocurrencies, one con is that they can be quite expensive.
Hot Storage Wallets- A Brief Overview
All online wallets are usually called hot wallets. The hot wallets require internet connection at all times. You can either choose an exchange platform whose wallets act as your storage unit or you can choose other websites that provide only wallet services. The most commonly used online wallets are those of the exchange platform. For example, if you register to one exchange platform for your trading purpose.
You will likely use the same platform for storing your cryptocurrencies. While there are many benefits to using such wallets it is usually recommended that you use hot wallets only for small crypto holdings.
As these are completely online, there is a risk of your wallets getting hacked and you losing all your crypto holdings. Hence, it is recommended that when you choose an exchange platform, you pay careful attention.
So, these were some points you needed to know about the crypto wallet options. While choosing a wallet for storing your cryptocurrency, you should keep in mind the features you want your wallet to have and also how you are going to be using your cryptocurrencies.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.