what is a 'software wallet'?
If you buy cryptocurrencies on exchanges like Binance or Coinbase it is only your your responsibility to administrate them in a safe way. Exchanges offer the possibility to directly store your funds the website. However, this signifies that your funds lay on a centralized server vulnerable to external threats like hackers. A safer alternative are software wallets, also called desktop wallets. These kinds of wallets are downloadable software. Being installed on your hard disk, desktop wallets present a recommendable alternative to hot wallets. Today, all famous cryptocurrencies offer software wallets for free.
Software wallets vs. online wallets?
As already mentioned, many exchanges are offering to take care of your funds. This makes your funds easy accessible but also vulnerable to hackers. Software wallets provide a more secure alternative, but why?
The main reason is the fact that software wallets are not directly connected to the internet. Consequently this does not guarantee maximum safety. With viruses, hackers are still able to get your funds. It is in your own responsibility to keep your computer free from spammy software. Nevertheless, it has to be said that software wallets are not reaching the security standard of hardware wallets and not the comfortability of online wallets. It is a more a halfway house between security and usability.
The best 'software wallets'
The following section will rank some of the best and currently most popular software wallets for cryptocurrencies.
- Exodus.io – Scores with an intuitive design & user-friendly interface and storage possibilities for over 90 different cryptocurrencies.
- Copay.io– Easy-to-use + high security standard through HD-multisignature. Only available for Bitcoin.
- Armory.io– Another secure multisignature alternative to Copay, enabling cold storage of Bitcoins.