Why Online Crypto Wallets are Dangerous to your Assets

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Why Online Crypto Wallets are Dangerous to your Assets
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Cryptocurrency wallets are very important to investors. Even before throwing your money on any digital coin, there is the need to think of a wallet to store your investment. Well, a wallet that will protect your investment should also be equally important to any investor, and with interest in cryptocurrencies still rising, it would be ideal to be on a safer side.
A wide range of wallets are available on the crypto market and finding the most suitable one for your type of investment. Online wallets, over the years, have been investor’s favorite, due to their convenience.
However, this shouldn’t be the only reason to trust online wallets to hold your precious investment as they do have some significant flaws which overshadow their convenience. Many wallets do have unique features which may come in real handy for investors but maybe be lacking behind when it comes to security reasons and the main reason for investing is sure isn’t to lose money.
Online wallets for starters are prone to hacking. The number of hacking cases in the crypto market has risen unprecedentedly within a couple of months, with many crypto exchanges losing millions of dollars in cryptos, leaving many investors for dead.
Online wallet’s problem with hacking is mainly because their private keys are stored online, and hackers can chance on it at any given time, which could result in a break into the wallet and subsequent theft of funds in it.
This problem is further worsened by the third party option which controls this private keys. Cryptocurrencies are famous for many reasons, and one of them is the freedom they offer. Having something as private and vital as the private key to your wallet, which probably contains all your investment, controlled by an unknown individual isn’t by any means ideal.
Many online wallets again do not have the option of a passphrase before logging into a wallet. It might not be the most crucial security measure out there, but it sure adds up to the safety of the wallet and lowers the risk of getting hacked.
Choosing a cryptocurrency wallet can be just as confusing as selecting the digital coin itself. Transactions on online wallets are relatively more comfortable as compared to others such as hardware wallets, but the possibility of them getting hacked is just so real it is starting to scare investors. Although hardware wallets do have some flaws of their own, they are much secured when put up against online wallets.


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.