The issue of storage is a fundamental problem in the cryptocurrency ecosystem. If you can easily find tutorials on the internet explaining how to buy cryptos, there is very little storage involved. So how do you store cryptocurrencies?
In this article we are going to tell you about the different solutions with which you can store your cryptocurrencies in a more or less secure way. We will see which option is most suitable for your needs.
How a digital wallet works
The digital wallet is translated into English by e-wallet, usually abbreviated wallet. It is this last term that we will use in this article. So how does a wallet work and how do you use it to store cryptocurrency?
We can compare the wallet with a bank account, to understand the whole better. Once you have a wallet, you will receive two different keys: the public key (which can be compared to a RIB/IBAN) and the private key (which is compared to a password to access the bank account).
Like the RIB and the IBAN, a wallet’s public key is only used to identify the user. So this key can be shared and must also be made available to other users who want to make a transaction to your wallet.
Conversely, the private key, as the name suggests, is private. Under no circumstances should it be sent to other persons, as it gives access to the contents of the digital portfolio. If your wallet’s private key falls into the wrong hands, your cryptocurrency could disappear forever. Even if they are stored on a secure device.
So this is how a crypto wallet works. In the rest of this article, we will see the different types of wallets on which it is possible to store crypto currencies, including Bitcoin, Ether, etc.
The different types of wallets where you can store cryptos
As we have hinted, there are different types of wallets. The operation generally remains the same, but it is often the storage system that makes the difference.
There are two different categories: the “cold” wallet (offline wallet) and the “hot” wallet (online wallet).
The offline wallet or cold wallet is a method of storing cryptocurrencies outside the network. Since there is no way to access it remotely, this is the safest category of wallet. Due to its security, the cold wallet is favored by the most cautious and those who have a relatively large number of crypto currencies.
There are two types of offline wallets: the hardware wallet and the paper wallet. These two options allow you to store cryptocurrencies without being connected to the internet. As you will see below, the transaction method is slightly different.
The hardware wallet
The hardware wallet is a “physical” storage medium for cryptocurrencies. In other words, it is a full-fledged electronic device that can store Bitcoins, Ethers, and other cryptos independently from the Internet. The hardware wallet is very popular with users who have a relatively large stock of cryptocurrencies.
Currently, the reference in the field of hardware wallet is the French start-up Ledger. After successive fundraising campaigns, the Parisian start-up has established itself on the international market. It must be said that Nano S, the cryptocurrency storage medium proposed by the team, was quite revolutionary at the time.
But while Ledger Nano S appealed to many crypto investors and users, the Ledger Nano X only strengthened the startup’s already dominant position in the cryptocurrency storage wallet market. Indeed, the Ledger Nano X meets all requirements in terms of safety and usability.
Buy a ledger
Wireless, the Ledger Nano X is a storage medium with a Bluetooth chip. This technology allows users to manage the storage of their cryptocurrencies from a mobile application, always without internet access. Despite the presence of Bluetooth, this device remains in the offline wallet category.
The paper wallet
The second choice in terms of cold wallet is the paper wallet which can be easily translated as paper wallet. It is a relatively safe option for storing crypto as it does not interact with any other electronic device except through a camera.
A paper wallet has the wallet’s public key and a QR code printed on it. Scanning it from the camera of a smartphone thus creates an interaction. The action triggered by the scan of this QR code is only to transfer crypto currencies to this wallet, making it even more secure.
To get cryptocurrencies out, on the other hand, the operation is a little more complicated. You will need to use a different type of wallet (online or desktop) on which you provide the public and private keys and then access the content.
Anyway, in addition to the undeniable security, the paper wallet has the advantage of being completely free. The only downside is that if it is lost, the piece of paper will take all the cryptocurrencies stored with it. It is therefore essential to make a copy.
Now let’s move on to the online wallet or hot wallet. As you will have understood, this is a digital wallet that requires internet access. Online cryptocurrency storage is the most popular.
It is much easier to use and you can manage your cryptocurrency anytime, anywhere as long as you have access to the internet.
The only criticism that can be made of this type of wallet is the fact that it is online and thus can be accessed remotely. This is why it is recommended to make a decision with great care.
To save you hours of research, we advise you to choose ZenGo, an application that has already proven itself in the field of crypto storage. This is an online wallet of which only the user concerned has the private key. So only this user has access to the contents of his wallet.
ZenGo is focused on the safety of its users. Indeed, the application offers an innovative system associated with the private keys of your crypto currencies. Instead of a traditional private key, ZenGo divides it into two parts: one part is kept on the company’s servers, the other on your smartphone. So the user is the only person who can access their money, even ZenGo doesn’t have that ability.
ZenGo also has a very powerful facial recognition system. For example, only the user’s face can open the app.
To use ZenGo, you need to go through the mobile application (Android or iOS). This is the only way to access the service. To download the app, get started by clicking here.
The desktop wallet
The desktop wallet is a “desktop” version of a digital wallet for storing crypto currencies.
If we haven’t classified the desktop wallet in the online category or in the offline category, it’s because it’s a bit of a mix of these two storage solutions. It can therefore be considered in a separate category.
The desktop wallet is software that allows you to store your cryptocurrency directly on your computer. However, there are two very different types for this category: the full wallet (complete wallet) and the lightweight wallet (light wallet).
The lightweight wallet
The lightweight wallet or light wallet (or even light client) is a desktop wallet that does not download the blockchain and performs simplified verification of transactions.
Like Exodus and Electrum, these storage solutions are very lightweight and work similar to the ZenGo application, but on a computer.
The full wallet
Like Bitcoin Core, there is also the full wallet or complete wallet that works completely independent of the network. The software that will serve as a wallet on the computer will download the entire blockchain of the cryptocurrency in question to store it on your computer’s hard drive.
Installing a full wallet on a computer makes it a full node and adds to the security of the network. The owner of this computer thus becomes a minor and is paid for his participation in the security of the network. However, this solution is not suitable for everyone. Beginners, or those who don’t want to spend a lot of time managing their cryptocurrencies, can find an alternative through wallets that are much easier to use, such as the one offered by the ZenGo application.
Which storage solution should you choose? Our advice
What we can learn from this article is that when it comes to storing cryptocurrencies, there is a solution adapted to every need.
If you are looking for the crème de la crème in the field of security, it is better to go to a cold wallet (offline wallet). The latter is not connected to the internet and is therefore impossible to hack remotely. In that sense, you can choose between the Nano S or the Nano X of the starting Ledger which manifests itself in the form of a USB key.
Buy a Ledger Wallet
Please note that in this particular case, if your offline wallet is inaccessible to you, all cryptocurrencies it contains will be forever inaccessible. This is a risk to be aware of whether it be a hardware wallet or a paper wallet. The paper wallet is all the more fragile because it can be lost or damaged very easily.
The obvious alternative to avoid losing your cryptocurrency storage medium is to use a hot wallet (online wallet). In addition to ease of use, this is one of the main arguments of this type of storage. This explains its popularity. And as such, you can choose ZenGo, which is much more secure than a hot wallet like Metamask for example.
As for the lightweight wallet, this solution is not very interesting because its principle of operation is similar to the online wallet, but on a computer. It is much easier and more flexible to use the ZenGo mobile app.
Storing cryptos in the ZenGo app