With the passage of time, the cryptocurrency industry has grown vast and it has spread its wings all across the internet. As of now, most of the sectors dealing with technology and advancement have adopted cryptocurrencies and blockchain technology.
This is when the pressure has intensified on the entire cryptocurrency sector when it comes to the privacy and security of user information. With the passage of time, the cryptocurrency sector has proven to be full of risks due to decentralization.
The cryptocurrency sector is constantly under pressure and the crypto brokers plus the crypto exchanges are bearing most of it. This is the reason they are always on the lookout for providing the highest level of security and support to their users.
One of the most sensitive and critical components that the crypto brokers and exchanges have to handle is the cryptocurrency wallets. Over time, several advancements and innovations have been injected into the cryptocurrency sector.
All the efforts made by the cryptocurrency firms are with aim of providing as much security as possible to their customers. This is when many software development companies have launched different kinds of cryptocurrency wallets. As a result, the cryptocurrency industry now has access to several kinds of software and hardware-based crypto-wallets.
It is up to the cryptocurrency community to choose the wallet they prefer. If you are also aiming to explore the cryptocurrency industry and wish to invest in it, then you can also benefit from these wallets.
The wallets categorized under the “software wallets” flag include the ones that are connected to the internet one way or another. They do not have a physical form or existence like the hardware wallets but pose a higher level of risk because of their nature. As these wallets are online, there is always a possibility of these wallets getting accessed and exploited by hackers.
The first kind is the extension (browser) based wallets that are linked directly with your browser. This means that these wallets are connected to the internet and can always be hacked.
The second kind is the desktop-based wallets that are installed into your operating systems. Although they are not directly connected with the internet, a hacker who manages to gain access to your operating system can access the particular wallet.
The third kind is the mobile-based wallets that are installed into your mobile phones. These wallets act just like the wallets in your operating systems. If someone gains access to your mobile phone, they can access the wallet.
The second major kind is the hardware wallets that are not connected to the internet at all. Therefore, the factor of these wallets being hacked or getting accessed online is canceled out due to their physical form.
The first kind is the USB-based wallets that exist in the form of a USB drive where the crypto-users can store the keys to their cryptocurrencies. These wallets are only connected with the computer device when one has to save the keys to their cryptocurrencies on it. Otherwise, the USBs are not connected to the computer or the internet at all. This feature makes it extremely difficult for hackers or anyone to access these wallets and steal the information out of them.
The second kind is paper-based wallets. As the name suggests, these wallets exist in the form of papers and they offer the highest level of security to the holders. As it is a wallet, then it doesn’t even involve the paper being connected to any operating system or the internet. The keys to a holder’s cryptocurrencies are saved on paper. This way, they can only be accessed by someone who gains physical access to them.
Although hardware wallets offer a much higher level of security and protection than software wallets, they still have one drawback. The drawback is their physical existence, which involves them getting physically stolen or ending up getting damaged to a point where they are unredeemable.