Software Wallet (SW)

If you are interested in the world of cryptocurrencies but are afraid to hold your assets (tokens /coins) on a centralized exchange (CEX), the easiest way is to download and install a software wallet (SW) on your device. You don't need to buy an expensive hardware wallet (HW), as most SW are free.

Software wallets have been the most commonly used variant of crypto wallets for many reasons. Crypto wallets include HW and SW depending on the approach to storing crypto assets. Hardware wallets store private keys of users in an offline environment, thus providing better security for cryptocurrencies. However, hardware wallets present scalability issues, which is why software wallets are so widespread.

Software wallets allow cryptocurrency holders to securely store their tokens / coins in one place. Crypto wallets usually allow users to purchase, swap, lend and stake cryptocurrencies. Similar to your bank account, they allow access to savings and loan products.

SW are also called "hot wallets" because they keep your private and public keys in the online environment or on your PC.

1. Desktop Wallets: With desktop wallets, you need to download an app or software to your desktop computer to store your assets. They give the user full control over the crypto assets because once installed, the "wallet.dat" file carrying the private key information is stored on your computer. In the most basic terms, desktop wallets are more secure than web and mobile wallets. However, desktop wallets also have some drawbacks, such as vulnerability to physical damage and risks of viruses and malware.
2. Mobile Wallets: Mobile wallet is one of the most widespread SW. It allows users to store and trade cryptocurrencies by just using a mobile app, which is intuitive, clear, and always at your fingertips once installed on your smartphone / tablet. Mobile devices are always at risk of being infected by malware or by installing malicious apps. Therefore, you must take an extra care when installing apps on devices where you have your SW.
3. Web Wallets: Web wallets provide better accessibility through a simple browser interface, without the need to download or install add-ons. To start, you create a new wallet and set a strong password to access it. You can come across some web wallet providers that keep users' private keys. Beginners might find this secure when the company holds and manages the private keys. In practice, this means the exact opposite; when you give your private key to a third party that can be hacked, you take the risk that your private key can be stolen, along with your cryptocurrency.

When choosing SW, you need to think about the way you will use it (actively or just for holding assets) and decide accordingly.

Here is a list of a few SW:

• MetaMask - supports all ERC-20 tokens
• Trust Wallet - the official SW of Binance
• Near Wallet - SW of the NEAR blockchain
• Maiar - SW of the ElrondGold blockchain
• Phantom - SW of Solana blockchain
• Polkawallet - SW of Polkadot blockchain

There are many software wallets and a complete list would be long. Therefore, we mentioned only a few proven, fully functional and "relatively" secure SW wallets.

PROs

• User friendly
• Easy to use
• Always ready
• Easy to access

CONs

• Security
• Risk of malware

Conclusion

The ever-accelerating adoption of cryptocurrencies and the rapidly expanding ecosystem present many opportunities and setbacks simultaneously. If you're interested in cryptocurrencies, you'll need a software wallet to store and manage your assets.

However, it's important to understand the software wallets and their basic functions along with a variety of uses.