There’s a reason why 16% of Americans say they’ve invested in, traded, or used cryptocurrency. As the buzz around this new form of currency continues, more beginners are looking for ways to get involved.
If you want to start investing in cryptocurrency, the first thing you’ll need is a crypto wallet. But, what exactly is a crypto wallet? And how do you find the best crypto wallet possible?
If you want to learn the answer to these questions and more, you’re in the right place. In this article, we’ll walk you through all the factors you should consider when picking a crypto wallet. That way, you can begin trading with confidence.
What Is a Crypto Wallet?
As the name suggests, a crypto wallet works in quite the same way as a traditional wallet. The difference is that instead of storing physical paper money, a crypto wallet contains proof of your digital money.
Crypto wallets come in many different forms. Some of them are physical storage devices. Others are app programs or services provided by exchanges.
A crypto wallet is responsible for storing both the private and public keys that are needed to buy cryptocurrency. These unique digital signatures make up the blockchain technology that forms the basis of all cryptocurrencies.
Before you start investing in cryptocurrency, it’s important to fully understand blockchain technology. So, if you need to learn more, make sure to get more information here on how to use crypto.
Is a Wallet Needed to Trade Crypto?
In short, yes. Without a crypto wallet, there’s no way to plug in a wallet address as the place for your funds to go. It’s not like traditional money where you can just store it around the home.
Crypto requires a digital storage device. So, you will need one to trade.
Tips for Deciding What Type of Crypto Wallet You Want or Need
Crypto wallets can be broken down into two main categories: hot storage wallets and cold storage wallets. Hot storage wallets connect directly to the internet. There are three main types of hot storage wallets. They include:
- Desktop wallets: a wallet that runs on your desktop with you in charge of security
- Mobile wallets: a wallet you can use on your smartphone for convenience and quick payments
- Web wallets: a wallet offered by crypto exchanges without a lot of the control that comes with desktop and mobile wallets
The main benefit of hot storage wallets is that they’re free. However, they’re also more susceptible to security breaches. The alternative is a cold storage wallet or a hardware wallet. This is a small, portable device that’s encrypted.
The cash with these types of wallets is stored offline. Hence, they’re safer. But, they’re also more expensive. A typical cold storage wallet will cost around $100. Popular hardware wallet brands include Ledger and Trezor, but there are others.
So, which one should you choose though, a hot or cold wallet?
In some cases, it makes sense to go with both of them. You can use your hot storage wallet for quick trading and other types of deals. Then, you can use your cold storage wallet to make sure that the majority of your cryptocurrency is secure.
1. Make Sure The Wallet Supports the Cryptocurrency You Want
Once you decide on what type of wallet you want, it’s time to start narrowing down your choices. One way you can do this is by only looking for wallets that support the types of crypto that you want to use.
For example, if you want to buy Bitcoin, then look for a wallet that supports that type of crypto. It shouldn’t be hard to find a crypto wallet that supports Bitcoin.
However, some of the more obscure types of cryptocurrency might require some searching before you can find the perfect one.
2. Prioritize Crypto Wallet Security
You’ve likely heard stories about people losing thousands or even millions to crypto hackers. You can reduce the odds of this happening by looking for wallets that prioritize security. Most apps or services will do this.
However, even the most secure online app is still susceptible to potential hackers. One solution is a hardware wallet that allows for transactions performed offline. Sadly, even these hardware options are still vulnerable.
If your password and speed are compromised, then it can still be hacked when you connect online. Also, remember that most crypto hacks occur because of user error, not nefarious groups targeting your accounts.
Sketchy crypto projects or websites might try to scam you into giving personal information about your accounts. So, protect this info and never give it out to anyone. It will go a long way toward making your wallet more secure.
3. Look For Wallet Services That Don’t Charge for Transactions
Most crypto wallets are free to use. However, some charge a small percentage for each transaction. Or, they’ll ask for a one-time fee. We recommend avoiding these types of crypto wallets.
Unless there’s a feature that you want to pay for, you can likely get just as good of a wallet for free. However, if you prize security, you might want to invest in a hardware wallet.
These are expensive, and there’s no guarantee that they won’t be hacked, but they are more secure.
Conclusion: How to Find the Best Crypto Wallet
We hope this article helped you learn how to find the best crypto wallet for your needs. If you’re just starting, it might feel like usability is the most important feature in a crypto wallet.
But, at the end of the day, you should be prioritizing security. The last thing you want is to invest a lot of money in crypto only for it all to go down the drain.
Didn’t want this article to end? We don’t blame you. Luckily, there are hundreds more that you can check out by continuing to explore our site. So, get started!