Crypto Currency Wallet Security

At their heart, crypto currencies currently reside on a vast network of peer-topeer computers with an immutable, distributed database called the blockchain. This is all well described in other chapters. While the cryptography of
the network appears secure, the means of accessing the network—crypto currency wallets—may not be any more secure than credit cards. A crypto currency wallet is a software application that stores the public and private keys
that interface with the blockchain. If your crypto currency wallet is compromised you could lose your crypto currency. Some crypto currency wallets are
desktop wallets designed for use on PCs. If your computer is hacked your
crypto currency is at risk. Some crypto currency wallets are cloud-based and
accessible from computers anywhere, but clouds like credit cards are managed
by a third party, so hacking and theft are a possibility just like they are with
any database controlled by a third party. Mobile wallets designed for smartphones are convenient, but smartphones can be hacked, lost, or stolen. There
are also hardware wallets housed in devices such as USBs which are highly
secure, unless the USB is lost, stolen, or damaged. Lastly, there are paper

crypto currency wallets that are essentially paper copies of your public and
private keys, so they are no more secure than paper currency.
Given the above, crypto currency wallets do not appear to provide any
more security, depending on the form of the wallet, than other data you store
on your computer, in the cloud, on your smart phone, or in your own personal physical wallet. So, while the blockchain itself may be secure and immutable as a distributed ledger, the means of accessing the blockchain, the crypto
currency wallet, is no more secure than other methods of exchanging goods
and services. If your private key is lost or compromised, your crypto currency
is at risk.