What wallet for what purpose

By yanis | little crypto guides | 12 Aug 2020


Wallets are a very thing in the . It's because we cannot use crypto without wallet (else, it's like using a computer without account on). It makes fake wallets a big scam source because of users doesn't know what there really are.

So in this article, I will talk about kinds of wallets and ways for using them.

 

I said enough unuseful blah-blah, so the article starts NOW

 

Hot Wallets

An hot wallet is any wallet on a device that is directly connected to internet.

 

Mobile wallets

If you have a smartphone, you can store bitcoins on. Only download apps like coinomi, trust wallet, or atomic wallet

 

Pros

  • good for physical shopping
  • ability to read qr codes
  • easy to use
  • wallet file is stored in a directory that only can be accessed by wallet app (file system protection)

Cons

  • if phone if broken AND you didn't make backups, your funds are lost
  • fs protection doesn't run on rooted/jailbreaked phones
  • needs for third party nodes

 

Desktop wallets (SPV)

Desktop SPV wallets are desktop wallets that run on computer without having to download the entire blockchain. 

The most popular of these wallets is electrum

 

Pros

  • we can do advanced things with
  • no need to download/store entire blockchain (on mobile wallets too)

Cons

  • wallet file can be opened by any program (file in user directory), so you have to encrypt it
  • needs for third party nodes (less reliable)

 

Desktop wallets (full node)

A full node is a node (wallet or other) that stores a copy of the blockchain and seeds it. Each cryptocurrency has its own full node that can be found on project's website/github.

 

Pros

  • helps network by seeding blocks and relaying transactions
  • doesn't need third party nodes
  • allows solo mining/staking

Cons

  • uses many resources

 

Cold wallets

A cold wallet is a wallet on a hardware that isn't directly connected to internet

 

Hardware wallet (ledger, trezor)

An hardware wallet is a device that will store your private keys and sign your transactions without giving keys to computer (so it can be used on an hacked computer)

Pros

  • Very secure
  • easy to use

Cons

  • expensive (why paying 100$ for securing 10$ ?)

 

Paper wallet

A paper wallet is a paper that contains a private/public key pair. I like comparing them with bills because of there aren't made with paper and store a value

Pros

  • easy/cheap to make
  • secure (how to hack a sheet of paper ?)

Cons

  • brittle (can't be stored close of chimney, sink...)
  • isn't a problem with photocopy/pictures (someone who makes a photo of ur paper wallet can steal your bitcoins)

 

Brain wallets

A brain wallet is (you already understood) a wallet you can store in your brain. 

 

Pros

  • in ur head, not anywhere else

Cons

  • not so secure (brain wallet generation algo doesn't provide enough entropy)
  • what should we do if he/she dies ???

 

 

It's the end of this article - I hope that you liked it (and learned something in)

If you did, please give a tip and a like (thanks)

If you see something to improve/add, feel free of saying it in comments (I know, didn't mention cloud/custodial wallets)

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yanis
yanis

A crypto freak, and also a miner. The picture is a real code !


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