You should know that there are several wallets for storing your Bitcoins and other crypto assets, but do you know what are the pros and cons of them? There are different types, applications, online, hardware, paper and each of them meets different needs.

For example for large amounts, it is not recommended to leave in hot wallets that have an internet connection, but it is always good to have a wallet for your cell phone for small day-to-day transactions, among other needs. But let’s check out the Pros and Cons of each one!

 

Web Wallets (Online)

They are widely used wallets, but one of the least secure, however, there are several advantages for small amounts of cryptocurrencies. This type of wallet is usually accessed via the internet directly in the browser, so as long as you are connected, you can access, store and make payments.

The wallet provider stores the wallet’s private key on their server, they save your keys and allow you to access your keys. Different services offer several features, some of which offer currency exchange directly through the wallet.

Pros
• Perform transactions quickly
• May be able to manage multiple cryptocurrencies in the same wallet
• Use conveniently anywhere and for active negotiations

Cons
• Online security risks, such as hacks and scams
• Personal protection risk, Virus, and malware risk
• A third party is in custody of your cryptos, not you.


Exchanges and other platform wallets

These wallets are similar to web wallets, but access is through the website or application of the platform that offers the wallet. In this type of wallet, the user does not have the private keys of their assets, in addition to running the risk of data leakage from the platform, hacks and exit scams.

However, there are some advantages offered by some platforms, such as arbitration, ease of handling, speed to execute purchase and sale. Generally, those who use these portfolios are Traders who need agility to execute market orders.

Pros
• Perform transactions quickly
• May be able to manage multiple cryptocurrencies in the same wallet
• Various benefits depending on the platform.

Cons
• Online security risks, such as hacks and scams
• Virus and malware risk
• A third party is in custody of your cryptos, not you.

 

Mobile Wallets

Mobile wallets are available on your smartphone through an application. Just like an app normally, you can use mobile wallets when shopping in physical stores quickly.

Other types of wallets, such as online wallets, also offer mobile versions. But some wallets are specific and used only for cell phones. Some wallets offer several features, some of them offer currency exchange directly through the wallet.

Pros
• Your private keys are not stored on a third-party server
• Use anywhere
• Offer additional features, such as QR code scanning

Cons
• Risk of losing your assets if your phone is lost or damaged if you have not saved your private key securely
• Virus and malware risk

 

Desktop Wallets

This is another option that can be more secure than online wallets. You can download the wallet and install it on your computer. Desktop wallets are especially secure if your computer is not, or better yet, never connected to the Internet.

If a desktop computer has never been connected to the Internet, it essentially becomes a cold wallet, which is very secure. Some wallets offer several features, some of them offer currency exchange directly through the wallet.

Pros
• A convenient option for those who exchange on the computer
• Your private keys are not stored on a third-party server
• If your device has never been connected to the Internet, it can be extremely secure
• Several features that usually do not have a mobile wallet

Cons
• More difficult to use your crypto assets on the go
• Virus and malware risk
• Risk of losing your assets if your computer’s storage is damaged if you have not safely saved your private key elsewhere

 

Hardware Wallets

Physical hardware wallets are one of the safest ways to keep your cryptocurrencies, they store your private keys on a device like a USB drive.

You can still make transactions online. But since they are offline most of the time, you can consider them a cold wallet.

Pros
• One of the most secure portfolio options
• Great for storing large amounts of cryptocurrencies that you don’t want to use on a day-to-day basis

Cons
• They are usually expensive to purchase
• Not so easy to use, especially for beginners

 

Paper Wallets

A cold paper wallet that to use, you will need to print your public and private keys. You can send funds by transferring money to the wallet’s public address and you can withdraw or send your coins by typing your private keys or scanning the QR code on the paper wallet.

Pros
• Totally proof against hackers, viruses, malware.
• Not stored on a computer or cell phone
• Your private keys are not stored on a third-party server

Cons
• It is not so easy to use
• They can catch fire, wet, tear

 

Note: There are metal plate wallets that have the same principles as paper, but do not have one of the cons, as they can withstand up to 900+ degrees of temperature, have no problems with water and other deterioration of natural causes.

Presented some Pros and Cons of some types of wallets, it is always good to check what your need is and choose the one that fits your activity. For example, if you are going to trade, choose a trustworthy exchange and leave what you operate on, to streamline the process and not pay withdrawal fees. Another example, if you are going to insure them for the future and do not intend to perform any operations in the short term, look for a cold wallet like a hardwallet or paperwallet.

We hope you enjoyed it and helped in your choice!