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Virtual wallet: what is it?

Virtual wallet: what is it?

Getting a virtual wallet is the first step you need to take to use any cryptocurrency: not only Bitcoin, but also Ether, Litecoin, Tether… It is estimated that there are more than 5500 active cryptocurrencies! Without a virtual wallet, it is simply impossible to store or perform any type of transaction with them.

Security is one of the principal factors when choosing a virtual wallet. However, other criteria are also significant, e.g. ease of transaction, portability, fees charged for the service, and even the amount that must be spent to acquire one of these wallets. You should also know that some of them only support one type of cryptocurrency.

There are four different types of virtual wallets: mobile, desktop, web and hardware, each with its own advantages and disadvantages. To help you choose one that suits you best, Cripto InterCambio blog has prepared a complete guide on this tool.

Types of virtual wallets

Mobile Wallets

This type of virtual wallet has become common with the popularization of smartphones. To obtain one, just download it on platforms such as Google Play or App Store, and the installed application will generate a wallet address.

The great advantage of this type is the convenience for carrying out transactions. In addition to online transactions, most applications also have the option to use QR Codes, through which it is possible to make payments and send crypto to other users.

However, these wallets also have some drawbacks. Since they a restored in the mobile phone, if the device is broken or stolen, it is possible that the crypto assets are lost – or, at least, that there is some difficulty in recovering them.

In addition, like any type of a computer, mobile phones are also subject to invasion by third parties, malware, and spyware. For these reasons, we recommend wallets for mobile phones for those who seek convenience in transactions and who do not intend to store large amounts of crypto.

Web wallets

To use a web wallet, simply create an account on one of the servers that offer this service. Since they are in the cloud, they can be accessed through any device – computer, mobile phone, tablet – simply by logging in and entering your password.

In practice, online wallets are not hugely different from any other online payment platform (such as PayPal and Skrill) or internet banking service, except for the fact that they are deal with cryptocurrencies, not fiat currencies. It is quite simple to control transactions. If there are problems with lost or damaged devices, the fund recovery process may be easier. However, even the best-known platforms can disconnect or suffer instabilities on their servers.

In addition, there is a real risk that such services will be attacked by malicious hackers – and you can learn more about some of them by clicking here.Therefore, the suggestion is similar to the previous one: this type is for users who carry out many transactions and do not store large amounts.

Desktop wallets

When desktop wallets first appeared, they used to only store bitcoins. Now, many different cryptocurrencies can be stored on a single computer, be it Windows, Mac, or Linux, in this type of wallet.

This type is convenient for carrying out money transfers. It is easy enough to be in front of a computer with an active Internet connection. However, it does not have a QR Code transfer mode, which can be useful for paying on everyday services.

If you choose this type of virtual wallet, it is important that you protect yourself with a good antivirus and a reliable firewall, since there are several malicious programs and spyware developed to steal cryptography from individual users. Also, if there is a problem with your computer, recovering funds can be complicated – it is important to always have a backup of your wallet somewhere else.

Hardware wallets

Without a doubt, it is the safest type of a virtual wallet. In short, it is a USB flash drive with advanced cryptography technology that guarantees user safety against viruses and malware. In crypto world jargon, this way of storing crypto is known as cold storage, unlike cloud storage.

To make transactions from the wallet, it is necessary to connect it to a computer via USB or Bluetooth. Normally, manufacturers of hardware wallets also provide the installation software to the user, which is installed on a computer. Therefore, making transactions is a bit more laborious and there is noway to use QR Codes.

The prices of hardware wallets can make them prohibitive for many users: currently, their prices range between 60 and 170 dollars. In this sense, the purchase of a hardware wallet is also a small investment.

Therefore, this type of virtual wallet is recommended for users who have large amounts of crypto assets and want to store them for longer periods. Your biggest risks are damage or loss of the device, and it is always important to have a backup copy of your wallet files.

Conclusion: what virtual wallet to choose?

As we have seen, users have many virtual wallet options. It is important to understand what type suits your needs best when making the choice. If you want to transfer money, make purchases, or exchange cryptocurrencies (and Crypto InterCambio can help you with that!) a mobile, online or desktop wallet service may be enough. However, it is always important to keep in mind that each type has its own specificities and risks. But if your main goal is to store large amounts of cryptocurrency for long periods, then it is worth investing in the security that only a hardware portfolio can provide.

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