How safe and secure are cryptocurrency wallets?

In the previous article, we discuss what is cryptocurrency wallet, what are the types and how do they work. This is the second article about wallets in cryptocurrency and here we will discuss what is hot and cold wallets, how secure the wallets are and go through some of the best wallets.
If you read the previous article, you already know that there are 5 types of cryptocurrency wallets which are a desktop, hardware, smartphone, online and paper wallets (you can read it here - What is cryptocurrency wallet?).

Wallets are also divided into two categories - hot wallets and cold wallets.

Hot wallets
Hot wallets are connected to the internet, so you need to be very careful because wallets that are connected to the internet is easier to hack.
Desktop wallets are also hot wallets especially if the wallet is installed on a system that’s connected to the Internet.
This category of wallets are not safe for a sizeable number of digital money, It is the best for storing small amounts, for a lot of digital money, better choose cold wallets or offline wallets.

Cold wallets
As mentioned before - cold wallets are the best for people who want to store a significant amount of digital money.
Cold wallets are also paper wallets (paper wallets are the best and the safest for a long-term digital money storage) and hardware wallets. Both of them are offline, so that means they are very safe.

Cryptocurrency wallets safety:

All of the cryptocurrency wallets have different security levels, It depends which type of them you choose to use. Offline wallets cannot be hacked because they simply aren’t connected to an online network and don’t rely on a third party for security, however, online wallets can be hacked.
Remember that no matter which wallet you use, losing your private keys will lead you to lose your money. Similarly, if your wallet gets hacked, or you send money to a scammer, there is no way to reclaim lost currency or reverse the transaction. You must take precautions and be very careful!

Keep in mind these things to secure your digital money:

• Backup your wallet to protect you against computer failures and allow you to recover your wallet should it be lost or stolen;
• Store only small amounts of currency for everyday use online;
• Keep your wallet software up to date to have the latest version of security. Update regularly;
• Add as much security as possible. Use long and complex passwords. Use the best wallets which has the best reputation and add extra security to them, for example, two-factor authentication and additional pin code requirements every time a wallet application gets opened. The more you add, the more secure your wallet will be;
• Never install software developed by companies you don’t trust;
• Only use verified and trusted wallets;
• Never access online wallets from public Wi-Fi.

Some of the cryptocurrency wallets:

Desktop wallets:

• Copay - used for bitcoin and backed by one of the world’s premiere cryptocurrency payment systems, giving it instant credibility and brand appeal.
• Exodus - It is designed to give you complete control over your cryptocurrency assets. Users have access to nearly a dozen cryptocurrencies.
• Electrum - supports only bitcoin cryptocurrency. It is compatible with multiple operating platforms, such as Windows, Mac, and Linux.
• Armory - supports only bitcoin cryptocurrency and designed to help individuals and businesses safeguard and manage their bitcoin tokens.

Hardware wallets:

• Ledger Nano S Hardware Wallet - offline, cold-storage, wallet for storing many other supported digital money coins. It can be controlled with just two buttons.
• KeepKey Hardware Wallet -allows you to generate and store an unlimited number of private keys. A “private key” is a sophisticated form of cryptography that allows you to access your cryptocurrency. It supports multiple cryptocurrencies.

Smartphone wallets;

• Mycelium - highly integrated bitcoin company specializing in hardware, software and security. Designed only for bitcoin and allows users to switch back and forth from regular fiat currency, like dollars, to bitcoin.
• Coinomi - provides a secure storage platform with support for a wide variety of digital assets and a built-in exchange for fast and easy trading.
• Mobi - allows you to send, receive and convert bitcoin in more than 100 currencies at any time with a very low exchange rate.

Online wallets:

• Exodus - It has all the advanced features which you expect to have in any advanced level web-based online wallet. It allows you to store multiple digital currencies
• Coinpayments - allowed more than 300 currencies to be stored in their online wallet account. Coinpayments has a mobile app too which makes it a semi-mobile wallet.

Paper wallet:

• Mycelium - with a USB dongle that you plug directly into your printer. The device generates a paper wallet that automatically gets printed out, without ever having touched your computer.

As you can see there are a lot of digital money wallets and that's why it is easy to get lost in them especially without any knowledge about cryptocurrency wallets or cryptocurrency itself. By choosing the right wallet, you need to see all risks, all fees all costs and features. It depends on you, which type of wallet you want!

Sources:
https://ripplecoinnews.com/top-5-best-cryptocurrency-wallets
https://www.coindesk.com/information/paper-wallet-tutorial/
https://www.finder.com/coinomi-wallet-review
https://www.finder.com/mycelium-wallet-review
https://www.finder.com/keepkey-wallet-review
https://cryptopotato.com/ledger-nano-s-complete-guide-hardware-wallet/
https://www.finder.com/armory-wallet-review
https://www.finder.com/electrum-wallet-review
https://www.finder.com/exodus-wallet-review
https://www.finder.com/copay-wallet-review
https://www.finder.com.au/cryptocurrency/wallets
https://www.disruptordaily.com/top-10-cryptocurrency-wallet-mobile-apps-2017/
https://usethebitcoin.com/top-5-best-cryptocurrency-hardware-wallets-2018/
https://successresources.com/keeping-bitcoins-safe-hot-wallets-vs-cold-wallets/
https://blockgeeks.com/guides/cryptocurrency-wallet-guide/
https://99bitcoins.com/2017s-best-bitcoin-desktop-wallets-4-wallets-reviewed-mac-windows-linux/