Beginner's Guide to Crypto - Software Wallets 101
Software wallets are computer programs that enable storing of your cryptocurrency. These wallets are referred to as hot storage because they are easily accessible and easily connected online. There are three types of software wallets - desktop wallets, online wallets and mobile wallets.
Desktop wallets are stored and accessed on your computer or laptop. You download the software (i.e. wallet) onto your computer and can access your funds only through that device. The benefit to using a desktop wallet is that it gives you complete control of your wallet without relying on a third party site or service for the security of your funds. The drawback to this is that if your device gets hacked or compromised in some other way, you may lose access to your funds.
Mobile wallets are a form of software wallet but on a mobile device such as a phone or tablet. It allows you to access, send and store cryptocurrencies right on your mobile device, making it the most convenient software wallet available. The downside to mobile wallets is that they are more susceptible to loss, due to higher occurrences of theft of the phone or breakage.
Web wallets are typically hosted by a third party and can be accessed on the internet from wherever you have access by knowing your private key, public address, and possibly an additional password. These wallets are very convenient and are almost always custodial.
Some software wallets are also web3 wallets. Web3 wallets are software wallets that enable you to use Dapps (decentralized applications) through a browser that opens within the wallet app. Examples of Dapps that require web3 wallets are CryptoKitties, Steemit and Blockchain Cuties.
Now that you’re an expert on software wallets, read on to see our reviews on various software wallets.