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