Wallets - What are cryptocurrency wallets?
SOFT WALLET
In the world of cryptocurrency, you are responsible for the safety and security of your coins. There is not a bank or FDIC to guarantee your deposits against loss. You are now your own bank. You will need to take the steps necessary to protect your crypto assets and investments. This is where the Crypto Coin Wallet comes into play. Core Wallets allow you to store, send, receive, and record transactions of a particular cryptocurrency.
Usually, before a company issues a new coin, the first thing they do is create a Core Wallet. The core wallet is a secure, on the blockchain, off-exchange place to send and secure your coins. Also called a soft wallet.
I think of the core wallet as the first place to send my newly purchased coins. This immediately protects you from loss if the exchange you used to purchase those coins decides to: Stop Trading and/or delist that coin completely from their exchange. This also prevents you from loss if the exchange gets hacked, is a scam, or just goes out of business, taking all of your money with them.
BEFORE you purchase a coin, make sure they have a core wallet. Go to their website and download their wallet. Install that wallet. Open that wallet. But BEFORE you can use that wallet, you must sync the wallet to their blockchain. This means, basically, leave it open on your computer until it is done syncing. I have waited for 2 to 3 days for some wallets to sync.
There are more complicated ways to sync a core wallet. You can download a blockchain file first, then delete and add new files etc.. It is easier to just wait. Once you are synced up, you can now send that coin from the exchange to your core wallet.
OK, you are now somewhat secure. The coins are now safely stored in the core wallet on your computer. But if your hard drive dies or your computer is stolen, you are out of luck. To prevent this scenario, you need to backup your core wallet and save a copy to your hard drive. Then copy that backup to a USB drive or portable hard drive. Write down all of your login and password information, as well as any private keys or password phrases. Delete those backup files from your PC and hide your notebook. Now you are secure.
PAPER WALLET
Some wallets allow you to generate a Paper Wallet. A Paper Wallet is a .pdf file you can print, which contains all of your private keys and QR codes. If you ever need to restore your wallet, you will need all of this information to do so. Don't forget to copy that .pdf file to a USB and then delete it from your hard drive.
WALLET APPLICATIONS
The next step up in user interface and convenience is a Wallet App. Wallet Apps can manage one type of coin or multiple coins. For example, The Exodus Wallet has a spiffy interface and can manage about 10 select cryptocurrencies. These Apps are also considered a soft wallet.
HARD WALLETS
The Hard Wallet is the best way to safely store your cryptocurrency. Hard wallets like the Ledger Nano S or Trezor Wallet are physical electronic devices that connect to your computer via a USB Port. They can manage many currencies. Your private keys are stored on these password protected devices and are never exposed to the internet.
Good Luck & Good Fortune!
@KryptoKev42