How to Store Ethers?
Ether as a digital currency is stored in special wallets. In order to send coins to another user, you need to know his or her wallet address, a so-called public key. Meanwhile, a private key, a code string used to confirm a transaction, is stored in the user's wallet.
A private key must be kept in secret, hence, various types of wallets with different protection levels are used to store it. Everyone chooses the most appropriate option, depending on his goals and the amount of money on the account. Users often have wallets of several types for convenience: separately for storage and for specific activities.
Types of Ethereum Wallets
All cryptocurrency wallets can be divided into two groups, "cold" and "hot" wallets. "Cold" wallets allow users to store data offline, that is, without access to the Internet. Using "hot" wallets requires a mandatory connection to the network.
Web-wallet is also considered a hot wallet because a user can get access to it only through a browser, when the Internet connection is available. Web-wallets can be presented in the form of a website, browser extension, or a wallet integrated into a crypto exchange.
This type of wallets is convenient because it can be used whenever there is the Internet connection. However, this useful option makes it vulnerable. That is why it is not recommended to keep significant amounts of money in web-wallets. As a rule, they are used as an "intermediary place" to perform frequent transactions, while "cold" wallets are preferred to store large sums.
Web wallet MetaMask as a Google Chrome browser add-on
- MyEtherWallet is considered quite safe, because data is stored on a client side, not in the cloud storage.
- MetaMask is presented in the form of a Google Chrome extension with the client-side data storing.
- The loss of access to the wallet because of server problems or a website crash.
- The leak of user data from a website due to security problems.
- A user account can be frozen or money can be stolen by the administration of a resource.
These wallets are presented in the form of applications for mobile devices and are usually used to store small amounts of money. Mobile wallets are convenient as they allow carrying out frequent transactions wherever a user is. The examples of multicurrency mobile wallets are Jaxx, Coinomi.
These are programs installed on computers. Desktop wallets are considered hot wallets because a user needs the Internet access to perform monetary transactions. However, desktop wallets are more secure compared to web wallets. They can be used only on the computer on which they are installed. Desktop wallets are divided into two types: the ones that require the download of the full Ethereum blockchain, and so-called light wallets that get data from other network nodes.
- Mist, an official Ethereum wallet.
- Exodus, a multicurrency wallet with simple functionality.
- Data damage by malicious software on the computer.
- A file that contains keys can be deleted by chance.
- Hard drive data corruption.
Hardware wallets are designed specifically for storing cryptocurrencies. These data storage devices are usually small and look like a cross between a flash drive and a smartphone. To get started, you need to connect your wallet to a computer via USB port or Wi-Fi. You can perform crypto transactions both online and offline.
A hardware wallet is considered one of the safest types of crypto wallets, so it is often used to store large amounts of money. For additional security, users hide the devices in a home safe, a safe deposit boxes or other secure places.
Advantages of hardware wallets:
- Multi-level protection (using a password to get access to the wallet, additional data encryption).
- Size. Hard wallets are small and handy.
- Simple functionality limited by a required set of options.
The most popular are multi-currency hardware wallets that allow storing different cryptocurrencies, apart from ether. The most reliable examples of hardware wallets are Ledger Nano S, TREZOR, KeepKey.
This type of a wallet looks least like a wallet — it is a sheet of paper that contains printed data. A paper wallet is used to store a seed-phrase, which is necessary for generating public and private keys. The loss of the seed-phrase means the unrecoverable loss of access to the wallet and money in it.
Ethereum paper wallet ready to print. From MyEtherWallet service
A wallet data can be represented in an explicit form (a string of symbols) or in an encrypted one (for example, a QR-code that can be scanned). The examples of services for generating paper wallets: MyEtherWallet, WalletGenerator.net.
- A paper wallet can be lost or destroyed.
- If the wallet is created using a printer connected to other devices, data may leak.
- Data duplication (for example, the picture of wallet data on your phone) can lead to money loss.
Users take efforts to protect their paper wallets by all means. They make it out of durable materials like metal, store in safety deposit boxes or home safes, or keep the parts of the seed-phrase separately.
Note: specific businesses mentioned here are not the only options available, and should not be taken as a recommendation.