A few quick notes on the different kinds of Crypto Wallets:
Online Wallets (websites, crypto exchanges (coinbase), ect):
Pros: Easy to access from anywhere, simple to trade to and from, high availability, will often have 2FA (2 Factor Authentication) available in some form for extra security.
Cons: Easy for hackers to access from anywhere, easier to dupe trade, 2FA is not hack-proof, If the website hosting your wallet goes down/goes away you lose everything in that wallet.
Conclusion: An online wallet will make it extremely helpful to convert and transfer currency to and from others.
Software Wallets (crypto cores you download to your PC/MAC/Linux):
Pros: More secure than online wallets, only accessible by the people who have access to your computer, more control over your wallet(s), you help maintain the integrity of the block-chain as these wallets sync with the network to help keep track of the transactions.
Cons: If a hacker can get in to your network or computer your wallet is at risk, if you have a hardware failure (knock on wood you don't) and didn't back up/write down your wallet all currency in that wallet is lost, if you suffer a virus looking for crypto currencies it could transfer all currency out of your wallet unbeknownist to you.
Conclusion: If you're diligent about backing up your stuff and want more control over your wallets this is the way to go.
Hardware Wallets (Ledger, Cobo, Trezor, ect)
Pros: Very secure, offline, often easy to setup and use, can store many different currencies in one place, protected by pin or passphrase, utilize recovery phrases in case pin or passphrase is forgotten, use some form of USB interface for the computer and as such can put in a safe (place) away from things like flood or fire (in minor cases) or electrical storms.
Cons: Costly, as these are the only non-free wallets, i.e. you have to pay for the hardware. Electronics can be known to die (knock wood) from time to time without warning and if you don't know your wallet address therein everything can be lost if it does die. These devices are often small and sometimes easy to misplace, if lost so too are your coins.
Conclusion: One of the most secure types of wallets as they're portable and very versatile as far as holding multiple types of currencies go. If stolen it will do little good for the person who stole it without the pin/passphrase or recovery phrases. Back up your recovery passphrases and you shouldn't have any issues.
Paper Wallets (wallets that you write down the address on a piece of paper, wallet generator)
Pros: In one view the most secure type of wallet in existence, offline, easy to use, no password or pins to forget, easy to store, and uses QR codes codes to help make transferring with a phone easier.
Cons: Susceptible to fire, water, loss, theft, mistyping and age. The mistyping is probably the biggest con since there's no digital version there is a high chance that numbers or letters in the address will be transposed in one way or another. No recovery passphrase if lost and printed in plain text so it can be easy to steal. As it is a physical paper if not in a safe and a second copy of it somewhere else fire is your worst enemy. Requires the most leg work to use since it is not in a digital format.
Conclusion: It is the most secure because there is no way the wallet can be hacked by anyone online. That said you are responsible for it's safety and you must do you your due diligence and make a copy of it and keep it somewhere else preferably place the copy in a safe deposit box or safe at a trusted third party's house.
Personally, I use a variety of these wallets. The big problem is having too many wallets so you forget where your values are stored, so try to have a balance, a few online a few software and a few hardware/paper for different types of crypto uses. Ideally, long term in paper or hardware, short term software, and online wallets for purchasing and investing. The major takeaway is always do your due diligence and backup your wallets!
Online Wallets (websites, crypto exchanges (coinbase), ect):
Pros: Easy to access from anywhere, simple to trade to and from, high availability, will often have 2FA (2 Factor Authentication) available in some form for extra security.
Cons: Easy for hackers to access from anywhere, easier to dupe trade, 2FA is not hack-proof, If the website hosting your wallet goes down/goes away you lose everything in that wallet.
Conclusion: An online wallet will make it extremely helpful to convert and transfer currency to and from others.
Software Wallets (crypto cores you download to your PC/MAC/Linux):
Pros: More secure than online wallets, only accessible by the people who have access to your computer, more control over your wallet(s), you help maintain the integrity of the block-chain as these wallets sync with the network to help keep track of the transactions.
Cons: If a hacker can get in to your network or computer your wallet is at risk, if you have a hardware failure (knock on wood you don't) and didn't back up/write down your wallet all currency in that wallet is lost, if you suffer a virus looking for crypto currencies it could transfer all currency out of your wallet unbeknownist to you.
Conclusion: If you're diligent about backing up your stuff and want more control over your wallets this is the way to go.
Hardware Wallets (Ledger, Cobo, Trezor, ect)
Pros: Very secure, offline, often easy to setup and use, can store many different currencies in one place, protected by pin or passphrase, utilize recovery phrases in case pin or passphrase is forgotten, use some form of USB interface for the computer and as such can put in a safe (place) away from things like flood or fire (in minor cases) or electrical storms.
Cons: Costly, as these are the only non-free wallets, i.e. you have to pay for the hardware. Electronics can be known to die (knock wood) from time to time without warning and if you don't know your wallet address therein everything can be lost if it does die. These devices are often small and sometimes easy to misplace, if lost so too are your coins.
Conclusion: One of the most secure types of wallets as they're portable and very versatile as far as holding multiple types of currencies go. If stolen it will do little good for the person who stole it without the pin/passphrase or recovery phrases. Back up your recovery passphrases and you shouldn't have any issues.
Paper Wallets (wallets that you write down the address on a piece of paper, wallet generator)
Pros: In one view the most secure type of wallet in existence, offline, easy to use, no password or pins to forget, easy to store, and uses QR codes codes to help make transferring with a phone easier.
Cons: Susceptible to fire, water, loss, theft, mistyping and age. The mistyping is probably the biggest con since there's no digital version there is a high chance that numbers or letters in the address will be transposed in one way or another. No recovery passphrase if lost and printed in plain text so it can be easy to steal. As it is a physical paper if not in a safe and a second copy of it somewhere else fire is your worst enemy. Requires the most leg work to use since it is not in a digital format.
Conclusion: It is the most secure because there is no way the wallet can be hacked by anyone online. That said you are responsible for it's safety and you must do you your due diligence and make a copy of it and keep it somewhere else preferably place the copy in a safe deposit box or safe at a trusted third party's house.
Personally, I use a variety of these wallets. The big problem is having too many wallets so you forget where your values are stored, so try to have a balance, a few online a few software and a few hardware/paper for different types of crypto uses. Ideally, long term in paper or hardware, short term software, and online wallets for purchasing and investing. The major takeaway is always do your due diligence and backup your wallets!
