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How to Choose a Cryptocurrency Wallet

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In the ever-expanding world of blockchain technology, choosing the right wallet to store your digital assets is often a challenge most crypto-enthusiasts and blockchain investors will eventually face.

With the growing number of new coins and tokens hitting the market comes an increasing number of options for storing your crypto. 

There are three main options for digital storage – software, hardware, and paper. This guide will help you to choose the right cryptocurrency wallet for your needs with the proper mix of function, security, and operability. 

Below, you will find we have compiled a comprehensive guide while taking note of the advantages as well as any disadvantages to each, to help assist you in making a decision!

Software Wallets

Software wallets encompass a variety of different options, but generally, they can be downloaded and accessed digitally by a phone or computer. These include online/web wallets, desktop wallets, and mobile wallets.

Simple, easy-to-use, and especially beneficial for those who use cryptocurrency to pay for everyday transactions. But while desktop and mobile wallets are safer than online wallets, they are not without vulnerabilities of their own.

Advantages: 

  • Straightforward and easy-to-use.
  • Great for people on the go, or those who buy things with cryptocurrency.
  • Some wallets offer additional features like a QR-code scanner or the use of near-field communication technology.

Disadvantages:

  • Software wallets can fall victim to hackers if the device remains connected to the internet.
  • If somebody steals your device, they may be able to access your funds.
  • Not all software wallets allow you to retain possession of your private keys. 

When using a mobile device, it’s often a good idea to choose a software wallet with a lock code, such as a PIN or fingerprint authentication.

Hardware Wallets

Cryptocurrency hardware wallets are small devices that only function when connected to the device initially used to set them up. 

In this way, your private keys remain secure in an offline environment, unlike other wallet types where the private key generated on a device connected to the Internet – like a desktop or mobile device, which results in your funds being at a greater risk of being stolen.

Advantages:

  • Private keys are not stored on your phone or computer.
  • Hardware wallets are resistant to computer viruses and malware – elaborate phishing scams are the most common culprit behind a security breach.
  • You must physically have the hardware wallet to confirm any transactions.
  • If you lose the wallet, you can still recover any holdings that may be stored there, as long as you still have the recovery phrase or seed generated when you had first set your wallet up.

Although users swear by them, and they are arguably the most popular option for storing crypto, hardware wallets are still prone to compromise.

Disadvantages:

  • You have to trust that the manufacturing company behind the wallet did not log all the private keys with a plan to raid wallets in the future.
  • It is essential to store this USB device and smartcard in a safe place, as any loss or damage could terminate access to your cryptocurrency.

Paper Wallets

A paper wallet is an offline method traditionally used for storing Bitcoin but can be used for any cryptocurrency. Paper wallets were primarily popular in the early years of Bitcoin. 

In recent years, cryptocurrency users have tended to explore other methods of securing their holdings.

Advantages:

  • Risks associated with losing, misreading, or damaging the paper wallet outweigh the potential security benefits.
  • The user is more or less invulnerable from cyberattacks and malware as it is simply not possible to access a user’s private key via digital avenues.
  • A great place to hold large amounts of cryptocurrency for long periods of time.

Disadvantages:

  • Susceptible to external damage, theft, and user-negligence.
  • Not ideal for quick and daily transactions.
  • Set up can be a little intimidating for beginners.

Without a doubt, the safest way to store any cryptocurrency is by using a paper wallet. Because they’re separate from the internet, paper wallets are more secure than other forms of cryptocurrency storage.

Safety First!

When choosing a cryptocurrency wallet, safety should be the primary factor in considering your choice.

You can find guides for secure wallets compatible with Uniswap on the Swapfolio Wiki page to ensure you’re still able to enjoy everything the Swapfolio app has to offer without compromising the safety of your hard-earned crypto!

If you want to learn more about Swapfolio from the team members, or the community itself, consider joining our Telegram group! There are always enthusiastic $SWFL supporters and team members ready to answer questions and help out with any problems you may have.

We even have a weekly giveaway where we reward our three most active and constructive community members that week! That’s right: you could earn some free $SWFL just for sharing your thoughts, opinions, and ideas!

See you there!

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