What Is a Software Wallet?
Software wallets are a type of cryptocurrency hot wallet that exists solely as software files on a computer or mobile device. In most cases, software wallets are more accessible and convenient for users to send, receive, and store cryptocurrency compared to hardware wallets. Depending on the provider, some can even be classified as a multi-coin wallet, which supports multiple types of cryptocurrencies.
Types of Software Wallets
Web-based wallets, or online cryptocurrency wallets, generally exist as browser extensions. They typically have user-friendly interfaces for efficient transactions and interaction with decentralised applications (dapps) or decentralised finance (DeFi) protocols.
Desktop wallets are downloadable computer programmes in which private keys are kept only on the owner’s computer. They are unable to access this programme online, as it is not connected to the internet. This type of wallet is often more secure than web-based wallets because the user is the only one with access to the programme and the stored private keys.
Smartphone-only cryptocurrency wallets, also known as mobile wallets, are similar to web-based wallets. They offer greater convenience in terms of sending and receiving cryptocurrencies, especially with the help of QR codes. However, mobile wallets come with the risk of malware infection or being hacked through malicious applications.