What differentiates hardware wallets from software wallets is that when they are plugged out-in “cold storage.” Without a doubt, Bitcoin hardware wallets are the most secure type of Bitcoin wallet. But I’d personally rather spend $100 or so to guarantee security than take risks with the free software wallet route. While both wallets protect your bitcoins more securely, some users would rather pass on the extra cost.īy all means, you do you.

The only potential downside of a hardware wallet is that it costs money. Software wallets, on the other hand, are still connected to the Internet and expose you to some risk. The advantage of hardware wallets is that your private keys are isolated from your computer, keeping your risk of theft near zero. Digital signatures verify ownership, keeping your private key safe and away from prying hands. It’s how you prove that you own a specific private key without flashing your key around in public. Hardware wallets are physical wallets with your private keys encrypted in them, software wallets are programs that live either on your computer or on the Internet, and paper wallets are physical documents with private keys.įor hard wallets, you’ll need a digital signature. There are three types of Bitcoin wallets: hardware, software, and paper. There some new terms coming up but don’t freak out! We’ve made this guide simple and easy so that even the cryptocurrency newbies will walk away experts. Note: Mobile Users Can Swipe to Scroll This Tableīefore we get started, let’s go over the different types of Bitcoin wallets.

If you’ve been looking for a way to securely store your cryptos, look no further. So, how do we protect our cryptos from hackers and ourselves?Ĭue the Bitcoin wallets. There are countless tragic and borderline comical stories of people losing their own bitcoins: This poor guy lost a hard disk with a Bitcoin data file containing 150 bitcoins (worth about $405,000 today) and another guy accidentally threw out a hard drive with 7,500 bitcoins (worth about $20.5 million today). One of the biggest concerns many of us have is getting our Bitcoin and other cryptos snatched right underneath our noses by hackers.īut a crypto-burglar might not even be your worst enemy.

Amidst the buzz and excitement of the Bitcoin community, the occasional headline of an exchange getting hacked makes every Bitcoin user’s stomach churn.

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