After hearing so much about cryptocurrency over the years, you have finally decided to give it a go yourself. You want to join the thousands of other people who have made the decision to invest or trade in cryptocurrency to give their finances a boost or because they want to have access to another payment method.
Either way, your journey is about to begin. As Qoin’s Facebook page highlights, digital currency is now becoming much more popular amongst consumers and many are starting the process of introducing it into their lives. Before you can start though, you must have access to a cryptocurrency wallet, as if you don’t, you won’t have anywhere to hold your digital cash.
Let us learn more about how you can start the process of choosing the best cryptocurrency wallet for your needs.
What is a Cryptocurrency Wallet?
Before you can find the perfect cryptocurrency wallet for your needs, you first need to know what one is. Also referred to as a bitcoin or crypto wallet, a cryptocurrency wallet is like a physical wallet but instead of holding your banknotes and credit cards, it holds your digital cash. Its main purpose is to store any public and private keys you need in order to buy Bitcoin or other cryptocurrencies, as well as providing a digital signature that authorizes each and every transaction you go on to make. You are most likely to find these wallets on a device, an app, an online website, or crypto exchange services.
It is important that you have a digital wallet before deciding to buy or trade cryptocurrency so that it can be transferred to you as and when you need it. You don’t have to worry about how secure they are though, as most of them are password-protected and others are likely to include further enhanced features like encryption, two-factor authentication, as well as other types of protection.
Hot Storage and Cold Storage Wallets
Now comes the most important part. Anyone who has looked into cryptocurrency wallets before will know that they are categorized into sections: Hot Storage and Cold Storage. First, let’s look at the former.
Hot storage wallets are simply wallets that can connect directly to the internet. This can be done through a phone app, desktop software, or an online provider. Whilst they have been known to be safe and secure because they are connected to the internet, there can be a certain risk level of online theft. Although during the past year or so, this type of theft has seen a significant drop, it is important that you remain cautious at all times. If you decide to go down the desktop wallet route, you will essentially be storing your cryptocurrency on a desktop computer, allowing you to have full control over your funds. Mobile wallets operate in the same way, instead, you are using the apps on your smartphone to manage your cryptocurrency and you must make sure you back up your device to protect it from theft and so forth.
Web wallets provide you with the best of both worlds. They are browser-based and can be used either on a desktop or mobile, but you aren’t granted the full control that you would otherwise have with the separate wallets. So, this should help to give you a well-rounded idea about hot storage wallets.
On the other hand, cold storage wallets are small encrypted portable devices that enable you to download and carry your Bitcoin and other cryptocurrencies with you. Because this cash can be stored offline, they are likely to be considered more secure than hot wallets. They can cost less than $100. But of course, this decision is yours to make.
Which One Is Right for You
Now that you have the facts, you must now conclude about which cryptocurrency wallet is the best one for you. However, you don’t need to have just one. You see, if you are someone who has been trading for several years and has considerable assets to your name, you may decide that purchasing a combination of hot wallets, that can allow you to trade and make purchases quickly, as well as cold wallets, that can help secure most of their cryptocurrency, may be the best route to go down.
Before coming to a definitive conclusion, be sure to do as much research as you need to make sure that you have come to the best decision for your own personal trading needs. Once this has been done, you can trade cryptocurrency to your heart’s content.