Trading in crypto sphere starts with opening a wallet. Wallet is a software program that stores public and private keys. Wallets interact with different blockchains to provide users the possibility to send and get cryptocurrencies and check their balances. There are some types of crypto wallets; software and hardware wallets, online wallets as well as paper wallets.
Software wallets are the most common ones. These wallets are installed on desktop or mobile devices. These types of wallets are simple to operate, they are more secure than online wallets and you have control over your cryptocurrencies. However, software wallets have some negative sides. If the device is lost, stolen or seriously damaged, then the wallet will be lost too. Another danger is that hackers can hack the computer or mobile and have access to the wallet.
Unlike software, hardware wallets store private keys of users on a physical device. They require installation of an application on a desktop or mobile device. Then, you need to connect them to a physical device which looks like a USB drive. To use hardware wallets for transactions, you need to plug it in, enter a pin, send the cryptocurrency, confirm and then pull it out to store away after finishing.
Hardware wallets are considered to have better security. However, these wallets are less user-friendly and because of their small size, they can easily be lost or damaged.
Online wallets are the most user-friendly types. These are the easiest to use and accessible from any device that is connected to the Internet. However, these wallets are the least secure, also because they are controlled by a third party.
Paper wallets are the basic form of cold storage. These are easy to use and the most hacker proof of all crypto wallets, as your coin data is not stored on any device.