When looking to buy or store cryptocurrency, the wallet you choose is a significant decision. If you’re new here, don’t worry. We’re going to show you the ropes and tell you everything you need to know when it comes to how to choose a crypto wallet. Let’s get into it.
What Are Crypto Wallets?
Crypto wallets are digital wallets that store your cryptocurrencies. These wallets store your public and private keys, and might be in the form of a program on your desktop, or on a USB, or merely a piece of paper. Additionally to storing your cryptocurrencies, crypto wallets also facilitate the sending and receiving of crypto by interacting with the blockchain. Wallets act as a gateway to the blockchain network and are responsible for sending and receiving crypto from one wallet address to another.
What Are Public and Private Keys?
A wallet address is a string of numbers and letters, with varying lengths based on the cryptocurrency in question. Bitcoin wallet addresses for example are made up of 26 – 35 alphanumeric characters, while an Ethereum wallet is made up of 42 characters. These addresses allow users to receive cryptocurrencies, similar to a public key. Private keys on the other hand are used to access the funds, as well as make transactions, and are highly confidential. Anyone with access to your private keys has access to your crypto.
Different Types Of Wallets
There are several different types of wallets and these fall into various categories. Here we’re going to be looking at two options, hot wallets and cold wallets. Hot wallets are typically software wallets and stored online, while cold wallets are typically hardware or paper wallets and kept offline. Each has their own set of pros and cons, and offer different uses for different trading styles.
Hot wallets are software-based wallets that function as a web wallet, mobile wallet and desktop wallet. These wallets are stored online and are easily accessible for frequent users. Funds are typically more vulnerable to hackers, so it is wise to store the bulk of your crypto offline, and only use the hot wallet for small transactions. Let’s take a look at a few options:
- Web Wallet: can be accessed from anywhere
- Mobile Wallet: portable and convenient
- Desktop Wallet: full control and overview
Hardware wallets and paper wallets use a physical medium to store your keys offline. As your wallet keys are not connected to the internet they are resistant to hackers and offer a safer alternative. The downside to cold wallets is that if lost or damaged, the funds cannot be recuperated, i.e. if you spill water on your paper wallet with no backup.
- USB Wallet: Portable and easy to store
- Paper Wallet: Safest option, backup essential
How To Choose Your Crypto Wallet
When choosing which crypto wallet to use, there are many factors to take into consideration. You’ll want to determine the level of security you’d like, how convenient accessing the wallet needs to be, and what level of privacy you’re looking for. Other factors to consider is the priority of the user-friendliness, customer support, fees, and which coins the wallet supports. This does not need to be an overwhelming endeavor, simply a well thought out one.
A good place to start is to establish what you’ll be using this crypto wallet for. Are you looking to hold crypto long term, or are you looking to use it daily for various transactions? This will help you establish between a hot or cold wallet, choosing the latter if long term hodling is your preference.
From here you can determine which of the options listed above fits best into your current lifestyle. Someone commuting might opt for a mobile wallet due to the sheer convenience of it all, while someone more permanently based might choose a paper wallet due to the convenience of locking it in a safe and not having to worry about.
Once you’ve established which kind of wallet you’re after, there are plenty of resources online to establish the best option for your budget.
Keeping Your Crypto Wallet Safe
The next endeavour of opening a crypto wallet is keeping it safe. There have been many stories of hackers taking off with millions of dollars worth of cryptocurrency, and you do not want to be one of them. Here are a few tips on keeping your crypto wallet safe.
- Always use a strong password.
- Never use the same password elsewhere.
- Utilise Two-factor Authorisation (2FA).
- Never share your private key with anyone.
When creating an account on Oobit, users are automatically given access to a military-grade wallet. This wallet is designed by cyber security experts and makes use of an air-gapped vault that keeps your crypto offline, but is still capable of accessing the blockchain in order to conduct transactions. This state-of-the-art storage solution is used by many top financial institutions around the world and is the pinnacle of digital asset security.
Finding The Right Wallet For You
We’ve walked you through how to choose your crypto wallet, and given you all the boxes to check when looking for a secure option to store your digital assets. Hopefully by now you have established what kind of wallet you might like to use, for the kind of trading you will be conducting. If in doubt, consider Oobit’s top quality storage solution, as well as the seamless manner in which they facilitate crypto trading.