The first thing to do when investing in cryptocurrency is to determine what kind of cryptocurrency to invest on. Finding where to store your cryptocurrency is the next best thing you should do.
After buying or trading currencies, you have to give importance to where you’re going to store them. Cryptocurrency wallet is where you store your keys, making sure that it is safe and with high security as there are lots of threat around.
There are lots of wallets to choose from and before you decide, let’s take a look at the factors you have to consider before choosing one.
If you own any cryptocurrencies, a digital wallet is a must-have. However, most people think that wallets are used to store their coins, but it’s not. A cryptocurrency wallet is a software that is used to store your public and private keys – it is much like your PIN code for every transaction and is connected with your currency. It collaborates with blockchain so users can monitor their balance, send, receive coins and other operations and is also very similar to a physical wallet.
The crucial difference between cryptocurrency wallets and other online money accounts is that your cryptocurrency wallet doesn’t store money in the same way as the wallet in your pocket does. Many types of cryptocurrency require the use of a wallet, so it is important that you find the right one for your chosen currencies and needs.
You have to understand how the wallet works so if you need to do something with your coins, you can take full advantage.
There are lots of wallets to choose from – online, offline desktop and etc. And having the best wallet means a higher safety and security for your cryptocurrencies.
Decentralization allows people to have more control directly with their assets, removing banks and middlemen in the picture. Mobile phones, laptops, hard drives and others becomes the crypto vault and have brought convenience to traders. And the use of Wallet has become more popular in the Cryptocurrency market.
Along with the use of cryptocurrency wallet is the risks that one must be willing to overcome or undertake.
Where and how would you want to store your cryptocurrencies? You’ll identify what wallet you need depending on what cryptocurrency you have. There are different types of wallets and each of them has different advantages. You can determine the best wallet by figuring out what you need and how this wallet can benefit you. With that in mind, you should ask yourself a number of questions before picking a wallet.
Though these questions seem enough, you need to dig more. These few questions can help with your decision making, but only you can decide which you think is the best fit.
There are different types of Wallet. In order for you to decide what kind of wallet to choose, you have to learn what the wallet is all about. To give you a better understanding about the wallets, below is the summary of each and every type of wallet.
Just like the name itself, desktop wallets must be downloaded and installed on a PC or laptop. It can only be accessed on the computer or laptop in which they were downloaded. The only risks that goes with this type of wallet is when your computer gets hacked or infected with a virus and your cryptocurrency investment will possibly vanished in just a snap of your finger.
Bringing the convenience anywhere with you, online wallets is accessible at any location as long as you have an internet connection. It runs on a cloud-based system but there are lots of risks associated with it as well. It is controlled by a third party and the tendency of being hacked is high.
App-based wallet is the most popular among wallets. Most of the wallets have an application and this is basically what Mobile wallets do. These wallets are apps that run on your phone and it is very convenient to use. Every type of wallet has its downfall, and this kind of wallet should be well taken cared of because losing your phone means losing your funds. Always make sure to sign off your mobile wallet applications when not needed.
Most people like hardware wallet as they store your key on hardware - like USB and once it’s inserted on an internet-enabled device, it’s offline. Keeping your money away from danger and allowing you to easily transact online is a pretty good deal and this is what hardware wallet does, increasing its safety and security. Hardware wallets are light and are very compatible with a lot of interfaces. Just simply plug in your hardware wallet to a computer device with internet access, enter your PIN and easily make a transaction. The best way to secure this kind of wallet is to always keep it in a safe place that only you know to avoid being stolen and damaged.
Paper wallet simply refers to physically printing out your public and private keys using a software that can generate private keys to be printed out. As it name suggest, it is just but a wallet made out of paper. If you have seen a QR code, it basically look like that when printed out and contains your private and public key. Like any other wallet, this has some disadvantages, too. To keep your cryptocurrency from being stolen using this type of wallet, you should always remember not to keep a copy of the paper wallet on your mobile phone, or on your desktop and always delete copies of it after printing out.
Software wallets can be advisable if you only trade for low amount and volume. It is a web-based wallet and can be installed on your computer. It is convenient in sending or receiving money. All you need is the software's password and you can make a transaction. However, it still has risk because it is still connected to the internet and could be hacked remotely.
Just like a joint account, the multisignature wallets require two people to sign in a transaction before it can be sent out. A lot of people, especially couples or partners opt for this wallet as it requires extra validation.
The wallets have different security level depending on what type of wallet you use and your provider, as well. Though they have security measures themselves, you can also make extra security precaution as the keys are very crucial. If your wallet has been hacked, or you got scammed, there’s no way that you can get your money and these precautions might save you from losing your hard earned cryptocurrency investments
To keep the bigger majority of your funds in a highly secure environment just store only small amounts of currency for everyday use online on your computer or mobile. Though the risk is always out there, in case you got scammed or hacked, you’ll only lose a small amount.
Being up to date is very important. As much as possible, read the software updates, the news and regularly update the software on your computer or mobile phone and not just your wallet software.
The more layers of security, the better. One of the best ways is setting up a unique and secure password. For example, a long and complex password that you’ll remember. As much as possible, use wallets that have a good reputation and provide extra security like two-factor authentication and additional pin code requirements. Though it can be time-consuming as every time a wallet application gets opened it will require you a PIN or password, at least you’re highly secured.
Whatever type of wallet you choose, make sure that your coins are stored in wallets based on your goals, what you need and safe enough, encrypted and inaccessible to theft. Moving your coins to a cold wallet when you intend to trade with it isn’t smart. For coins that you intend to trade needs to stay on an easily accessible hot wallet.
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