There are different types of cryptocurrency wallets available now. Sometimes it’s difficult to choose the best one. Let’s analyse the main features of each wallet type and try to find out which is the best of them.
Types of Cryptocurrency Wallets
- Hot wallets
Cryptocurrency wallets which are permanently connected to the internet and currency dealing server are called hot wallets. These hot wallets are a bit risky to use, as in case someone does not have a good firewall installed on the system, then these wallets are vulnerable to attacks and are always at risk of being misused or stolen. A device when turned on and the wallet software is already running, then it can simply be said to be a hot cryptocurrency wallet.
- Their main advantage is that they are quick and responsive.
- Their main disadvantage is that they are vulnerable to attacks.
- Cold wallets
Cryptocurrency wallets which are not permanently connected to the internet and is not connected to the currency server are known as cold cryptocurrency wallets. These wallets are believed to be and are more secure than those which always stay online, i.e. hot wallets, because when the software goes offline, there are no chances of any attacks being successful and the cryptocurrency stored in it will not be as vulnerable as hot wallets.
- Their main advantage is that they are secure against attacks and are not easy to be hacked
- Their main disadvantage is that they are a bit slow as you will have to connect the wallet to the server and turn up the wallet software to use the cryptocurrency stored in it.
- Bread Wallet
It is a wallet which is simply a mobile bitcoin digital wallet. It is just so easy to use that even a beginner can use it to transfer bitcoins or altcoins through this kind of wallets. They can be easily installed through an app store. Bread wallets do not use any server to send or receive bitcoins and are standalone wallets. Which ensures that the owner is having the full control over the wallet and controls the funds all the time without any kind of disturbance.
- The advantage of using a bread wallet is that it gives better privacy and is user-friendly. Bread wallets are open source software and are secure in nature.
- The disadvantage of using a bread wallet is that it lacks a lot of features as there is no web interface.
- Mycelium Bitcoin wallet
Founded by a team of hardware engineers this wallet is a mobile bitcoin wallet which is a combination of convenience and innovation. It supports BTC type cryptocurrencies; and allows users to send, receive and trade bitcoin.
- Types of accounts that mycelium wallet offers are listed below:
- Single address accounts
- Hierarchical deterministic
- Hardware (offline)
- Watch only accounts
- Bit id: – these are open protocols
In the bitcoin industry, mycelium is recognized as one of the best cryptocurrency wallets available for mobile. The wallet is free to use, yet transactions may be subject to size-based fees in some cases. It is very simple to add currency to your wallet while using mycelium wallet. It can be done using glider and cashola, as they are integrated into the wallet platform. These essential tools allow you to sell, buy or exchange bitcoin for fiat currency. This great wallet also allows, you to accept and exchange bitcoins stored in other types of wallets and any other wallets.
Making and receiving payments through this wallet has become as easy as it can ever be, as this wallet is backed – up by enterprise level of security features, it becomes a great option for securing private keys.
When it comes to security mycelium takes great care of your concern and is best for your safety.
Having been backed up by enterprise-level feature, it also includes HD security and extensive backups as options for the safety of your private keys. For sending bitcoin payments, adding new accounts, changing orders for buying or selling and exporting singles – address private keys it asks for a pin code which is generated at the time you are signing – up. Inside the account, you must provide a 12 digit/word security phrase. In case your device is stolen or lost, this twelve-digit phrase will help you recover your account.
Are these Wallets Anonymous?
To an extent they are, but then it depends on their type and software they are programmed within use. These are not attached particularly to a user’s identity, but yes, they are stored in blockchains permanently and are stored publicly. There are many projects and experts aiming at this objective, yet as of today, they are not completely anonymous.
After all the analysis above, it is safe to say that cold wallets offer a superior set of advantages and safety features to its users. Though they are a little bit slower than the other options, it is compensated by the benefits offered.
With various choices for your cryptocurrency wallets, you can find a wallet that suits your desires.
Get your copy of What is Bitcoin
This e-book on Amazon explains what Bitcoin is, it explains that Bitcoin (BTC) is a virtual currency, digital, not physical, and independent of banks. Useful links and resources for the newbie and advanced Bitcoiner or cryptocurrency enthusiast.