DeutschWhat Types of Electronic Wallets Exist?
In practice, there are now different types of wallets, even if they have the same purpose, namely to store data records or coin holdings. A primary distinction is made between two groups, namely so-called online and offline wallets. In both groups there is again a further subdivision, so that a total of the following four types exist on the market:
- Online wallet on a cryptocoin exchange
- Online wallet with an external provider
- Paper Wallet
- Ledger
- Trezor
The first two variants are online variants, while both the paper wallet and the ledger fall into the group of offline wallets.
What are the Characteristics of an Online Wallet?
With the online wallet, you have to distinguish whether it is just a type of account on a cryptocoin exchange, or whether it is an external wallet from a provider. Strictly speaking, the online wallet at a Cryptocoin exchange, such as BitPanda, is not a real wallet at all. Instead, the coins are simply booked into an account, as you may know from online accounts in the investment sector. These electronic wallets are subject to a comparatively high risk, because access is possible online from any location and thus naturally also offers hackers the chance to steal holdings.
The situation is similar with the online wallets of external providers, which are indeed real electronic wallets, but access is also possible via the Internet. In particular, due to these security concerns, online wallets are now hardly recommended by experts. Instead, it is a good idea to opt for an offline wallet.
Offline Variants: Paper Wallet and Hardware Wallet
The significant difference between the online and offline variants is simply that with an offline wallet, no access is possible via the Internet, as there is no online connection. For this reason, offline wallets are now considered to be much more secure compared to the online wallets listed above. There are now two large groups of offline variants, namely the paper wallet on the one hand and so-called hardware wallets on the other.
Simply put, the paper wallet is nothing more than a printout on a piece of paper. This contains both your public and your private key, so that you can access your coin holdings at any time with the paper wallet. However, it is important that you do not lose the paper, because without the data (keys) printed on it, you would no longer have access to your coin holdings. A slightly different variant is the hardware wallet. This is an external storage medium, which is basically comparable to a USB stick. The leading hardware electronic wallet is currently the Ledger, such as the Nano Ledger X, the Trezor One or Nano S Ledger. (Instructions for Nano S Ledger)
Buy a Ledger
