There exists various types of cryptocurrency wallets to allow users store and access their digital currencies in different ways. The question that is relevant in this context is how far are these wallets secure. Before taking up the security aspect, it is helpful to understand the various types or varieties of cryptocurrency wallets that exist today.
Cryptocurrency wallet: Types and varieties
These wallets can broadly be classified in 3 categories:
Software wallets
Hardware wallets and
Paper wallets
Cryptocurrency software wallets can again be sub-divided into desktop, online and mobile wallets.
Desktop software wallets: These wallets are meant to be downloaded and installed on desktop PCs and laptops. This particular variety offers the highest level of security though their accessibility is limited only to the computer in which they are installed. Moreover, in case, if the computer gets hacked or is virus-infected, there's a possibility that one may lose all his or her money.
Online software wallets: This range of cryptocurrency wallets run on the Cloud. Thus, they can easily be accessed from any computing device and from any geographical location. Apart from accessibility convenience, this type of digital wallets store the private keys online. The keys are even controlled by third-parties; this makes them easily vulnerable to hacking and theft.