Cryptocurrencies started as a way for people to buy and sell products in a decentralized market, putting the power in the hands of consumers. This concept of safeguarding money from the government quickly grew into an empire with over nineteen thousand different types of cryptocurrencies. While the market has revealed itself to be very volatile, it’s a great opportunity for people with funds and a knack for investments. But there’s always the risk of losing your money when investing due to factors that are out of your control, such as scams or market insecurity, so it’s important to tread carefully. Before investing, a crypto wallet is a must-have to start buying cryptocurrency and connecting to a marketplace to sell and trade crypto.
What Is a Crypto Wallet?
A crypto wallet isn’t like a regular wallet, as it doesn’t technically store your currency. Crypto is part of the blockchain network, and that’s why it’s untraceable. Instead, crypto wallets store the public and private keys required to make transactions and access your currency. In other words, these wallets function as your account in the crypto market, verifying your identity and your crypto value so your transactions can be done in a safe and user-friendly way.
There are hot and cold crypto wallets. A hot wallet is connected to the internet, allowing for easier access and a more streamlined process of transferring crypto. They’re generally free but are also easier to hack. On the other hand, a cold wallet is kept completely offline and is usually in a physical format, such as a hard drive or a paper document. A cold wallet is advantageous in terms of security. Since it’s always offline, it prevents hackers from accessing your crypto details. However, cold wallets aren’t free and can be inconvenient when it comes to transactions.
It's always advised to have both types of wallets. This way, you can use a hot wallet for smaller investments that require more convenience while storing the keys to higher investments in the more secure cold wallet. In short, having both wallets means that you’re able to exchange crypto with confidence and peace of mind.
Recommended Crypto Wallets
Not only a crypto wallet but also a trading platform, the user-friendly YouHodler allows you to earn crypto with a savings account and get a loan of up to 90% of your crypto’s value. It’s also possible to earn interest on the crypto you’ve saved, incentivizing you to keep your assets in your wallet and leverage its value without ever being forced to sell. YouHodler offers an interest rate of up to 8.32%, and the straightforward multi-HODL trading service combines the best of crypto exchanges and traditional platforms into one. This platform is perfect for people who want to save cryptocurrency and increase its value exponentially in the long term.
While it has a larger focus on safely storing over 250 cryptocurrencies, SimpleHold has direct integration with SimpleSwap to trade and sell crypto without signing up. It’s not possible to buy crypto directly through this wallet, but you can rest assured that your assets are protected, as the service doesn’t connect to any marketplace. The company offers support for hardware wallets, ensuring you can keep everything offline and have access to a wallet account. SimpleHold also allows users to store NFTs, which can then be traded in SimpleSwap. It doesn’t gather any personal data, so users have complete anonymity, not to mention that this crypto wallet lets anyone move crypto to another wallet at any time by simply importing a private key.
Lykke is a straightforward crypto exchange platform with no fees, which also provides trading wallets. Due to this focus, the company’s wallet is meant for quick and easy buying and selling. There are no fees associated with trading, but Lykke does have small fees and minimum amounts for withdrawal. Even though the platform is best for exchanging crypto, it offers as much protection as any other online crypto wallet with the added benefit of trading features. Lykke only operates in some countries due to cryptocurrency ban regulations. Even so, it’s an incredible crypto exchange platform that comes with 24/7 customer support.
What To Look for in a Crypto Wallet
There are many factors to consider when determining the overall cost of owning and using a crypto wallet. Make sure to check the withdrawal and trading fees and whether there are any monthly fees. Nearly all wallets support the most popular cryptos but if you want to experiment with lesser-known cryptocurrencies, remember that you can’t store a cryptocurrency that isn’t supported by your wallet. If you already own a physical wallet for your crypto, it’s best if your online wallet is compatible with your hardware.
Extra features are always a big plus. Enabling additional security protocols and having bots that make investments for you are just a few added bonuses you may want to keep an eye on. There are also several features that might seem insignificant but end up being a game changer in the long term, such as good customer support. You should choose a wallet that suits your needs, but take note of some aspects that might not have been on your mind, such as the ability to trade crypto using a simple QR code.
Advice on Safely Investing in Cryptocurrency
As a rule of thumb in any type of investing, never invest what you are not prepared to lose. Luck also plays a part in investing, so even the most well-thought-out strategies may fail. But that doesn’t mean that you should invest randomly. Investing in several cryptocurrencies and setting a buying and selling limit are some examples of smart investing. This way, you can lessen the blow of a failed investment by having a diversified portfolio and make sure you don’t lose more than you can afford.
With new investment opportunities, scams and fraudulent deals are sure to follow. When a deal sounds too good to be true, it usually is. As the world of crypto is still relatively young, some cryptocurrencies disappear as soon as they pop up. Always do your research to figure out which currencies are a true investment and which ones are nothing more than just scams. Read up on popular crypto hacks to help keep your investments safe and how to recover a lost crypto wallet in case it happens to you.