The crypto currencies are experiencing surges since 2019 and so too have the hacking events. Many crypto investors are new to the field and are unaware of keeping their crypto currency safe. Given that the investors are novel, the hackers are growing in number and using ingenious ways to steal money. In this article, I explain you different methods to hold crypto currency safe.
How to hold crypto currency?
Just we store our cash cards and money in our wallet; crypto currencies are stored in digital wallets. There are different types of wallets to hold your crypto currency.
The online wallets are called hot wallets. These wallets run on internet connected devices like phones, computers and tablets. The hot wallets are one of the most convenient wallets to use. However, they lack security as compared to other kinds of crypto wallets. You may use a VPN to keep your hot wallet safe. The different types of hot wallets are desktop wallets, web wallets, mobile wallets, etc.
The desktop wallets use encryption to store the private keys of the users. Here the keys are stored in computer hard drives. These wallets are the best choice for making small crypto transactions. They are free and easy to use.
The web wallets are provided by third parties. They offer seamless access using web browser. These wallets are best suited for the new comers. They support different types of transactions such as buy, swap, sell, etc.
The mobile wallets provide instant access. They are easy to use. A smart phone and an internet connection is sufficient to use these wallets.
The cold wallets are offline wallets. These wallets are not connected to the internet. If connected, they interact with the internet through block chain. Therefore, they are more secure than the hot wallets. There are two different types of cold wallets namely paper wallets and hardware wallets.
The paper wallets the keys are written down in paper or printed. They are then stored in secure places. No third parties have access to your keys. Hacking is completely impossible here. This is a traditional way of holding your crypto currency.
The hardware wallets are physical devices. They have secure private keys in number format. The hardware wallets are just like USB drives. They can be plugged into a mobile device or computer.
Apart from these, there are custodial wallets and non-custodial wallets.
Custodial wallets and Non-custodial wallets
In custodial wallets, a third party holds the security information of the user. The third party signs in on behalf of the user and initiates the transactions. He takes the security responsibility as well. In non-custodial wallets, the users take full responsibility for keeping their keys safe. No third parties are involved.