A crypto wallet, as mentioned earlier, helps in diverse ways. You can manage all your assets in one secure place. You can send and receive currencies. Leveraging the wallet, you can make purchases from online stores and merchants who accept cryptocurrency payments. You can also browse a wide range of decentralized finance apps using a wallet.
A crypto wallet requires the safe keeping of your private keys. Private keys are equivalent to passwords for emails or your banking accounts. You can only access your holdings using a private key that works as proof of ownership of your digital money. Losing your private key amounts to losing access to your crypto assets.
Hardware vs Software Crypto Wallets
When it comes to the types of wallets, you can have a paper wallet, a hardware wallet, or a software wallet. Paper wallets have their keys written on a physical medium like paper, making it harder for you to use for your crypto, which is essentially digital and is used on the internet.
The hardware wallet is a physical device, somewhat resembling a pen-drive with USB ports. The hardware device is responsible for the storage of your private key, and you have the liberty to only bring it online when you want to use your crypto. You will have to connect it to your computer before using it.
The software wallets, also known as online wallets, store the keys in an application. It is easier to use as it is always online and does not require the safekeeping of an additional device. These wallets are usually protected by two-step encryption.
Hard wallets offer more protection from malicious online attackers, while soft wallets offer the convenience of use. The one you will choose will depend on what benefits you want.