4 Different Types Of Monero Wallets And The Pros And Cons Of Each

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Getting into Monero (XMR) is a smart idea for people who are interested in exploring cryptocurrencies. The privacy coin, which was released in 2014, has grown tremendously in terms of value and the size of its community. These days, XMR is considered as one of the top options for privacy coins, and it also has the third-largest community of developers, right behind Bitcoin and Ethereum. It’s no wonder, then, that many people are considering including the currency in their asset portfolio.

The good news is that XMR is quite friendly to total beginners in the cryptocurrency scene. To get started, you only need to have a computer or a mobile device, an internet connection, and access to a Monero wallet. Once you have these, you can explore the means to acquire the coin, check out crypto exchanges, take a look at the merchants who accept XMR, and complete transactions using the currency. With the right consumer-grade hardware and software, you can even start mining Monero coins in the comfort of your own home. It’s that simple.

In the past, very few cryptocurrency wallets supported XMR, and the coin’s users have limited options on where to store the units they’ve acquired. These days, however, they’re spoiled for choice as they have the option to use hardware and software wallets, including full wallets, light wallets, custodial wallets, and paper wallets. Below are the most common types of Monero wallets and their respective pros and cons.

Full Wallets

Monero has an official wallet that’s been developed within the community, and it comes in two forms: a command-line interface (CLI) and graphical user interface (GUI). The CLI wallet is for the more experienced user, as it requires commands to be typed on the terminal screen. On the other hand, the GUI offers a more familiar interface and is all-around more beginner-friendly.

Full wallets support their own nodes, and these nodes are added to the existing ones within the cryptocurrency network. When you use your own node to carry out transactions, you enjoy better privacy, as no one else can see what you’re doing or whether it’s Monero-related or not. In comparison, if you use another user’s node, that third party will know that you’re dealing with Monero, though they still aren’t privy to the details of your transactions.

On the downside, though, having your own node means supporting the Monero blockchain, which requires around 95 to 100 GB these days, and keeping in mind that it will only continue to grow.

Light Wallets

Now, if having a copy of your own ledger is a little lower on your priority list, choosing a light wallet should be a good option for you. These types of wallets are not for keeping a copy of your shared ledger; rather, they enable you to connect to a node elsewhere whenever you want to access your XMR coins. Compared to full wallets, light wallets don’t take up as much space and can run on a phone or other mobile device. Unfortunately, it also enables the owner of the node you are using to see that you’re transacting using Monero.

Not all light wallets are designed the same way. To ensure the integrity and safety of your transactions, make it a point to choose light wallets that offer higher levels of security. Some wallets access your coin’s records from the ledger whenever you request it to do so, while others keep a copy of your view key, enabling them to see your coins and sacrificing a bit of your privacy.

Custodial Wallets

If you think that you’re better off handing over custody of your coins to other people, then custodial wallets may just suit you. These wallets are set up by the people to whom you are giving custody of your coins, and they usually require your information before they let you see your XMR units. If you can no longer tend to your coins, having this setup enables those you entrust to access your assets in your absence.

Take note, though, that since your coins are in the custody of others, the wallet owner can claim ownership of the coin. It’s important, then, to end up with a custodial wallet service provider that is trustworthy and can offer you the assurance that your asset will remain your property.

Paper Wallets

Using a paper wallet refers to storing your coins in a computer that will never connect to the internet and keeping your keys old-school by jotting them down in a piece of paper. Depending on how you carry out this long-term storage plan, it can be pretty secure, as it’s less likely to fall victim to malicious third parties over the internet. However, using paper wallets can still be pretty risky, as it’s prone to human errors like losing a record of your keys, which will then lock you out of the coins you own.

What Does It Mean to Store Your XMR Coins in a Wallet?

To determine the best option for storing your XMR coins, you need to understand a few key concepts about owning and storing Monero. The truth of the matter is that your XMR wallet does not store your coins. The coins that you own are stored in the shared ledger instead. You can input your view key on your Monero wallet to see the transactions that belong to you on the shared ledger.

Alternatively, you can use your spend key and record that a particular portion of the coins in your ledger now belongs to someone else, perchance to complete a transaction. Still, it’s important to put a bit of thought into how you want to manage your Monero coins, and this includes selecting the best type of wallet for your activities using the currency.

Source: https://www.techsling.com

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