Different Types Of Wallets
Custodial Or Non-Custodial? Hot Or Cold? Lets Find Out What Works For You
Different Types Of Wallet:
Digital Wallets, complicated stuff right? Nope. Time to remove all the uncertainty surrounding wallets.
Picture your trusty traditional wallet. It holds all the money that you have whether that’s in cash or card form. In Web3, digital wallets are like the high-tech versions of those. Instead of fiat money like pounds or dollars, they store cryptocurrencies like ETH and BTC. And before you ask cryptocurrencies are stored in your bank rather in the blockchain.
Now Time For The Different Types Of Wallets:
Let's talk about custodial and non-custodial wallets.
Custodial wallets are like having a middleman, such as a crypto exchange, they hold your crypto for you which is great for beginners dipping their toes into the crypto space but the more you invest the more cautious you should be as the golden rule applies. Not your keys, not your crypto. It's a bit like letting someone else hold your wallet. You’d hope they keep it safe, but there is no guarantee.
That’s where non-custodial wallets shine as they give you complete control. Letting you become the master of your crypto universe, no longer relying on others to keep your assets secure.
Now for the last bit when it comes to types of wallets. We've got hot and cold storage wallets to explore.
Hot storage wallets are web wallets, like MetaMask, that exist in your browser or phone. They're convenient, but carry a greater risk of being hacked as they’re vulnerable to malicious links or software which can make them a bit too hot to handle.
Cold storage wallets, on the other hand, are like the guardians of your crypto. Built on hardware they are physical devices that lock away your assets with an ironclad grip, Trezor and Ledger wallets are the industry standard when it comes to cold storage. They're hard to crack, but be careful not to misplace them, losing one of these bad boys could hurt a lot.
So there you have it, all you need to know to venture into the crypto world like a pro. Just remember to choose the wallet type that suits your needs, keep your private keys safe, and enjoy your time in Web3.
