Wallet Types Explained

Understand the different ways to store your crypto

⏱️ 15 min📝 1 quiz questions

Wallet Types Explained

A crypto wallet doesn't actually store your coins - it stores the private keys that control them. Choosing the right wallet depends on your needs.

Hot Wallets (Connected to Internet)

Browser Extension Wallets

Examples: MetaMask, Rabby, Rainbow

Pros: Easy to use, instant access, free

Cons: Vulnerable if computer is compromised

Best for: Daily transactions, DeFi, small amounts

Mobile Wallets

Examples: Trust Wallet, Coinbase Wallet

Pros: Convenient, good for payments

Cons: Phone theft/loss risk

Best for: On-the-go transactions

Cold Wallets (Offline Storage)

Hardware Wallets

Examples: Ledger, Trezor, GridPlus

Pros: Keys never touch the internet, most secure

Cons: Cost money ($50-200), less convenient

Best for: Long-term storage, large amounts

Paper Wallets

A printed copy of your keys

Pros: Completely offline

Cons: Can be destroyed, stolen, or lost

Best for: Backup only

Custodial vs Non-Custodial

Custodial: Exchange holds your keys (Coinbase, Binance)

- You trust the company

- They can freeze your account

Non-Custodial: You control your keys

- Full control

- Full responsibility

The Golden Rule

"Not your keys, not your coins." - If you don't control the private keys, you don't truly own the crypto.

📝 Knowledge Check

1. Which wallet type is most secure for long-term storage?