A Cryptocurrency Wallet is software or service used for representing cryptocurrency transactions and securing ownership of them.
Each Wallet is associated with a Public Key, which is used as an address for managing and assigning cryptocurrency transactions sent over a blockchain. This Public Key is commonly the address you will specify whenever you send a cryptocurrency transaction from one place to another.
Each Wallet also securely stores a Private Key, which is a key that secures ownership of the cryptocurrency balance associated with the Public Key address.
There are various types of cryptocurrency wallets which are used and managed in different ways. Exchange services like Tradefada manage and maintain Wallets, and provide you with the functionality to send and receive transactions as well as securely hold the balances assigned to your account.
We manage and maintain a Wallet for each cryptocurrency coin, and using this Wallet allow users to generate an address which is associated to each respective account on our database. You can only generate one address per coin and this address will never change.
Types of Cryptocurrency Wallets
Each cryptocurrency coin requires it's own specific Wallet as each operates on its own specific blockchain. To view the software available to set up your own Personal Wallet for a specific cryptocurrency coin, head to the 'Coin Info' page and select the 'Links' heading. The first link will be the website for that coin and there you will find the types of wallets that are on offer for different platforms. Outlined below are the common types of Wallets.
#1. Personal Wallets
Personal Wallets are recommended for your own storage of cryptocurrency coins, as this gives you complete control over the wallet and the Public and Private keys associated with it.
#2. Online web-based Wallets
Online wallets are typically hosted online and accessed from a web browser. These are generally simple to access and use, but may be limited in functionality.
Due to being hosted and managed by a third party, and always being online, they are not necessarily as secure as other wallet types and may be targets for exploiting your cryptocurrency coins.
#3. Desktop Wallets
Desktop Wallets are accessed on a desktop/laptop computer and utilize its operating system, e.g. desktop computer using a Windows operating system.
They are generally easy to use, but require some setup and maintenance, and can be kept online or offline depending on your needs.
Desktop Wallets have the benefit of storing your Private Key on a local platform, instead of online as a Web Wallet. The security of your cryptocurrency is dependent on the security of the device running them, as well as your general online security practices.
#4. Mobile Wallets
Mobile wallets have some similarities to both Desktop and Online web-based wallets. They are designed to be run specifically from a mobile device, with easy access and convenience in mind.
PLEASE NOTE: Phones and other devices often have their own security flaws, such as being easily stolen or accessed by unauthorised parties.
#5. Hardware Wallets
These are hardware dongles specifically designed for secure, long-term storage of a cryptocurrency, and are generally one of the most secure ways to keep your holdings safe.
#6. Paper Wallets
Paper Wallets are physical printouts containing the Public and Private keys associated with your cryptocurrency holdings. They require a little more effort and knowledge to manage, but can provide higher levels of security against online attacks as your Private Key is not stored or accessible anywhere online.