Types of wallets
A cryptocurrency wallet is a safe and secure place where users can keep their digital currencies.
Remember, only a wallet that you have private keys to (a password that provides access to your cryptocurrency) is considered to be safe to store your personal funds. It is highly not recommended to store cryptocurrency on exchanges, as this increases the risk of funds loss.
Not your keys, not your coins ‒ they say.
Cryptocurrency wallets come in different forms, from desktop and mobile applications to hardware (USB-like) devices and paper wallets. All wallets are designed to enable the storage of cryptocurrency and to allow the sending and receiving of funds. Technically, cryptocurrency is not stored in the wallet ‒ its records live on the blockchain, and can be accessed using unique private keys, which grant the right to make transactions. Losing your private keys means losing access to your digital funds. That is why it is crucial to keep your keys safe and offline.
The difference between the wallet types lies in their security and supported functionality. Paper wallets are the most secure, for example, but not as convenient in use; some wallets support a limited number of currencies, some lack certain features (like delegation, for instance).
Let's take a closer look at the pros and cons of different wallet types:
- Paper wallets — these are paper documents that contain public and private keys details. Such documents can be stored in a safe place and are highly secure as they can’t be compromised via online attacks. Paper wallets are best to use for long-term savings. On the other hand, the funds linked to paper wallets are not possible to operate online (for purchases, for example), as they will have to be moved to other wallets first.
- Hardware wallets — these are devices that store cryptocurrencies offline and can be connected to a computer to access the funds. Hardware wallets are secure and their benefit lies in the balance of offline security and convenience as they can be carried around and used when needed. The disadvantage of the hardware wallet is the risk of device loss or damage.
- Online wallets — these wallets can be commonly set up using a browser. They work through the internet and store cryptocurrency in a certain application or software. This is convenient as users can send, receive, and use crypto as in any other bank account or payment system. However, online wallets are more open to security issues and can be compromised or attacked. Search online for the most secure and suitable wallet; always keep your keys offline and use 2FA verification where possible (giving preference to security keys over SMS verification).
- Desktop wallets — these wallets can be downloaded on a personal computer. They are secure and convenient in use. Before choosing the best-matching solution, it is important to ensure that your computer meets software requirements and that the wallet supports the cryptocurrency you would like to work with. Desktop wallets are easy to use, but are not as flexible or portable.
- Mobile wallets — these are wallet applications that can be installed directly on a smartphone. Such wallets are simple to install and use and is a good additional option for cryptocurrency storage.
Where to store ada?
There are different wallets that support ada. Take a look at some possible options below to choose the one that matches your needs best.
Daedalus is a full node, desktop wallet. Daedalus downloads a full copy of the Cardano blockchain and independently validates every transaction in its history. This provides maximum security and completely trustless operation, without centrally-hosted third party servers. It supports all major desktop operating systems and provides the following features:
- easy installation with one-click setup of bundled Cardano node
- locally stored wallets and encrypted private keys, not shared with third-party servers
- trustless operation with locally running full Cardano node which independently validates full transaction history of the blockchain
- supports Cardano network by participating in the Ouroboros protocol
- wallet backup and restoration using mnemonics
- support for staking and delegation
- support for voting
- complete autonomy without reliance on third-party servers and services
- paper wallet generator for offline storage of funds
To install Daedalus, follow these steps:
- First, read system requirements. Please note that Daedalus is a resource-intensive application. If you want to manage ada quickly and easily you can try Yoroi or AdaLite wallets.
- Visit the official Daedalus website.
- Follow these installation instructions.
Here is a list of hardware wallets to consider for storing and transacting with ada: