All cryptocurrency is contained in a decentralized database – the blockchain. But access to crypto is stored in so-called wallets – special programs. An electronic wallet contains all the necessary data with which the user proves ownership of Bitcoin.
There are different types of wallets:
It is convenient for most users to store crypto in exchange accounts. To ensure that cryptocurrency is reliably protected, it is worth choosing brokers that offer cold storage without constant access to the network.
Such wallets are installed on the computer. The owner himself determines the level of protection and controls the movement of crypto without the involvement of intermediaries. This option is suitable for investors who are going to store large amounts of money for a long period of time.
These smartphone applications download only part of the blockchain to the phone, and store the rest of the information on servers. Mobile wallets are convenient for making payments. However, due to their low reliability, it is not worth storing large amounts of BTC on them.
This is the easiest way to store, because you don’t need to download and install separate programs. But web wallets are often exposed to hacker attacks, that’s why it is better not to keep considerable sums on them, as well as on mobile ones.
Hardware wallets are physical electronic devices (like usb mass storage devices), which store all data and guarantee their owner complete anonymity. They have very high security and are effective for long-term storage of bitcoins. However, if the storage device is stolen, there is a high risk of losing all the money.