Where is the Cryptocurrency Stored?

Cryptocurrencies are stored in wallets. There are two main types of wallets: hot and cold wallets. Hot wallets are connected to the Internet, while cold wallets are not.

A common type of hot wallet is an exchange wallet. If you have used an exchange to purchase cryptocurrency and are storing them in your account on the exchange, then you are likely using a hot wallet to store your cryptocurrencies. Hot wallets are more convenient to use as they allow you faster access to your assets, but they are more vulnerable to cyber attacks. Other hot wallets include software wallets like Jaxx, and web wallets like MyEtherWallet.

On the contrary, cold wallets are more secure as they are not prone to cyber attacks. Such wallets include hardware wallets like Trezor that function like a thumb drive that store key access to your cryptocurrencies, or paper wallets, which were popular in the earlier years of Bitcoin. A paper wallet is a piece of paper that has your keys printed on it, usually in the form of a QR code. Because it is not on the internet, it is impossible to conduct a cyberattack on it, but it is prone to other risks like losing or damaging that piece of paper.

If you are new to the space, we recommend leaving your cryptocurrencies on the Gemini Exchange hot wallet for now! It is convenient to use, and has not been compromised before. 


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