As the cryptocurrency industry has grown in size, its security has become one of the most critical aspects. People want to make sure that their funds are kept safe and protected. They do not want their assets to fall into the hands of criminals or hackers. 

With the passage of time, the cryptocurrency industry has become one of the most attractive sectors where investors come to invest their money. So far, the cryptocurrency sector has proven to be very profitable for most investors.

This is the reason why hundreds of millions of investors are now putting in their investments in the particular space. However, as the industry is growing bigger and better, it is also becoming one of the most favorite grounds for cybercriminals. 

In the year 2021, several reports have started coming in pertaining to the hacks, where investors are deprived of their gains and funds inside their wallets. In most cases, it is the hot wallets that are exploited and hacked by cybercriminals, stealing funds in return.

If you are also part of the cryptocurrency community and have cryptocurrencies on you, then you need to be aware of different kinds of wallets.

Major Kinds of Crypto-Wallets

There are currently two major kinds of cryptocurrency wallets that you have access to within the cryptocurrency sector. In the crypto-sector, even exchanges have launched their cryptocurrency exchange wallets for the benefit of investors. At present, you have access to two major kinds of wallets that include the hot wallets and cold wallets.

Hot Wallets (Software Wallets)

Compared to cold wallets, it is the hot wallets that pose high risks. These wallets are mainly software-based and are connected with the internet one way or another. These include desktop wallets, web-based wallets, and mobile wallets:

Desktop Wallets

Although these wallets are not directly connected with the internet, yet they are inside your operating systems. If these operating systems are connected with the internet, then there are high chances that hackers can steal the keys for your cryptocurrencies through hacks. 

Web-Based Wallets

These are web-based wallets that are fully connected with the internet either through cryptocurrency exchanges or through browser extensions. These wallets pose the highest risk as they are connected with the internet 24/7 and always at the mercy of hackers. 

Mobile Wallets

Although these wallets are present inside your phone in the form of applications, yet they can also be exploited by hackers. The hackers can gain access to your mobile device if it connects to the internet and then steals the keys away.

Cold Wallets (Hardware Wallets)

As compared to hot wallets, cold wallets are considered much safer and risk-free. These wallets are not connected with the internet at all, and most of the time, they exist in physical forms. However, the only drawback the cold wallets have is that you have to protect them yourself as they exist physically. You also need to make sure you do not end up losing or misplacing them, or lose sight of them:

USB Wallet

The USB wallets are completely offline and exist in the form of a flash drive. You can store your cryptocurrency keys in the wallets and keep them in a place where you feel safe in keeping them. These wallets are only connected to the internet when you are to send or receive cryptocurrencies from the wallet.

Paper Wallet

The next kind of wallet is the paper wallet, where the keys to your cryptocurrencies are added to the paper. You can keep the paper wallet safe and secure, keeping it out of the reach of others. Once again, the only danger the paper wallet poses is that you may end up misplacing them. If you forget where you have kept them and someone else gains access to them, you end up losing all of your cryptocurrencies.